Mainfreight boss asks should profit sharing with staff be essential part of capitalism?

Mainfreight chairman Bruce Plested. Photo / Supplied

Mainfreight chairman Bruce Plested has again used the company's annual report to speak out on social inequality, asking if sharing a percentage of profits among the people who helped create them should be an essential part of capitalism.

In his report in the global logistics and transport company's 2019 report, Plested said one of the modern problems of the western world is the belief that the capitalist system is failing because of a perceived increase in inequality and low wages growth.

"Could one of the solutions to these perceptions be in the hands of the business community?", he wrote.

"It is a basic premise of capitalism to have the lowest possible input costs, but there is no particular premise that the enterprise, if successful with its strategy, must hold on to all the profits.

"This may be a flaw in the interpretation of the capitalist model that is contributing to inequality. Could it be that a sharing of a percentage of the profits amongst the people who helped create them, should be an essential part of capitalism?"

Plested said Mainfreight believed a significant factor in its financial success had come about through profit sharing with its staff.

Its discretionary annual bonus was $27.2 million in the 2019 financial year, up from $20.7m the previous year.

Plested, co-founder of Mainfreight in the 1970s, in its 2017 annual report called on politicians to fix New Zealand's "social disgrace" around housing.

Given 2017 was an election year, he said it was worth asking questions of politicians.

Normal housing in most parts of the country cost some 10 times the net annual income of the people seeking to buy homes, Plested wrote.

He called on local and national politicians to take action because the market could not sort out the problem. Plested that year also singled out education and the environment as areas needing urgent attention.

In the 2019 annual report, Plested noted that Mainfreight's favourite charity Duffy Books in Homes would mark 25 years of giving books to children in low decile schools, and to early education centres.

The charity would this year give out its 13-millionth book to a child.

The charity worked out of Mainfreight sites in New Zealand, Australia and the US.

Plested said the charity was always seeking new sponsors and if like him, readers believed that education was the solution to most ills, they should contact Duffy Books in Homes.

Mainfreight's global sales in 2019 nudged $3b. The company achieved $1b sales in 2009 and six years later posted $2b of sales.

Its income tax payable for the 2019 year was $54.5m ($45.4m in 2018).

EBITDA for the year increased $42m - $30m of which was generated by Mainfreight's overseas businesses.