Fonterra CFO Andrew Murray Resigns
Fonterra Co-operative Group chief financial officer Andrew Murray has resigned to take up a role outside the dairy giant.
But a shareholder farmer is warning that the co-op risks losing good staff over its decision to suspend performance bonuses and annual pay increments.
Ashburton farmer and popular blogger Craig Hickman, known as ‘Dairyman’ on social media, believes the co-op’s decision is wrong.
Hickman says he supports the management’s decision to revamp the business but penalising staff isn’t the way to go.
Fonterra chief executive Miles Hurrell emailed farmer shareholders last week, stating that the board and management had decided not to pay performance bonuses to co-op staff for 2018-19.
No salaried employee earning over $100,000 would be eligible for the annual pay increase this year, he said. Everyone needs to help turn the business around.
“Our people understand this is the right thing to do given our current financial performance.”
The co-op talked to employees this week about the two decisions.
But Hickman told Rural News that Fonterra wasn’t going broke and there was no reason to unfairly penalise staff.
“Farmers are angry at the erosion of our share value and the non payment of a dividend but we’re not going broke. The payout still starts with a ‘6’,” he said.
“We’re potentially going to lose good staff.
“In 2015 when the milk payout dropped to $3.90/kgMS and farmers were going broke, I bet bonuses were still paid back then.
“This just feels short sighted and has the potential to do so much damage.”
Hickman says he will raise the issue when Fonterra directors and management are in Ashburton later this month to talk about the annual results.
“Every Fonterra director who voted for this should be embarrassed,” he said.
Hickman wants Fonterra employees who exceed key performance indicator (KPI) targets to be rewarded.
“I want the person who unpacks their laptop and does extra work on their holiday to feel valued: I want the highly skilled people to stay put.
“Punishing people for poor decisions by the previous board -- decisions they had no control over -- is just awful. You can devalue your assets in line with best accounting practices but you should always value your people.”
Fonterra will announce its annual results on Thursday (Sept 12).
The co-op has signalled that losses could be as high as $675 million thanks to write-downs on its assets. There will be no dividend payout.
Update: Fonterra has announced it will now be reporting its annual result "no later than 30 September 2019".
