Top dollar for Fonterra's chief

Fonterra's Canadian chief executive Andrew Ferrier looks set to be the highest-paid man in New Zealand this year, with salary and bonuses totalling nearly $2.6 million.

But he is unlikely to top Telecom's Theresa Gattung as the highest-paid individual - last year salary and bonuses took her pay to more than $2.8 million. Given Telecom's strong result this year, there is no reason to assume she is expecting a pay cut.

Ferrier started at Fonterra in September 2003, so the annual report filed with the New Zealand Exchange yesterday - for the year to May 31 - is the first to include details of his salary for a full year.

The former sugar industry executive has presided over a period of revenue growth and good returns for its 12,000 farmer shareholders.

Those good times have largely been driven by strong global dairy prices.

Ferrier led an unsuccessful bid to take over Australia's largest dairy company, National Foods, but has successfully made structural changes within Fonterra, cutting costs and driving growth in the consumer brands business.

He has also overseen two senior management reshuffles and attracted several highly regarded international executives to the company.

Topping Fonterra's remuneration list for the year was a long-serving senior executive whose severance pay took his earnings for the year to $3.4 million. It is understood that the executive - likely to be former NZ Milk boss David Pilkington - had pay conditions dating back to Dairy Board days. His payment is also likely to have included a large chunk of superannuation.

The report shows that just over 1000 of Fonterra's 18,600 employees are being paid more than $100,000 a year. The company has cut staff numbers by 1400 since 2002.

Fonterra directors got a small pay rise this year. Chairman Henry van der Heyden was paid $205,000 - compared with $194,000 the year before. Other directors were paid $100,000 - up from $97,000 the year before. Those changes were approved by shareholders at the AGM in October.