Fonterra paid its former chief executive, Andrew Ferrier, an $8.2 million "golden goodbye" when he left the cooperative last year, according to Fonterra's annual result.
Chairman Sir Henry van der Heyden said the payment represented the "washup" of the Canadian's performance incentive schemes.
"I know it's lost of money - it is a lot of money," van der Heyden, who will step down as chairman in December, said.
"The fundemental core of our payment system to management is based on performance, so this is the washup of Andrew's long-term incentives, and his short term-incentives," van der Heyden said at Fonterra's results presentation.
Ferrier's replacement, Theo Spierings, has been in the job for exactly one year.
