Fonterra cuts bonuses, freezes 6000 top workers pay

Fonterra has put a pay freeze on its top-earning workers and cut sales bonuses, as it addresses its financial problems.

The dairy giant signalled in August that it was expecting to post a loss of up to $675 million due to write-downs on its assets.

In an email to staff, chief executive Miles Hurrell said while the co-op was making good progress on its plan to turn the business around, some tough calls still needed to be made.

As a result, he said Fonterra's management team and the board had made the decision not to pay bonuses for the annual Short Term Incentive scheme (STI) or Sales Incentive Plan (SIP) for the FY19 performance year.

There would also be a freeze for Fonterra's top earners.

"This has been a tough call, but it's also the right one,"  said Miles Hurrell.
"This has been a tough call, but it's also the right one," said Miles Hurrell. Photo credit: Supplied

"A decision has also been made that all salaried employees on individual employment agreements earning over NZ$100,000 per year will not get an increase through the FY20 remuneration review," he said.

Fonterra employs 22,000 staff, with more than 6000 on salaries of more than $100,000.

Hurrell said there would still be a remuneration review for salaried employees under the level and there was no impact on waged employees who are part of a collective agreement.

"This has been a tough call, but it's also the right one," he said in the email. 

"Together as a Co-operative we must do what's right, working together to reset our business and get us back to a position where we can be proud of our financial performance."

Fonterra is due to announce it's annual financial result on September 12th

Newshub.

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