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Meanwhile, the number of employees has risen 27.4 per cent, from 16,800 to 21,400, and staff remuneration by 26.9 per cent. In dollar terms, this resulted in a $764 million decline in annual payments to NZ farmers between 2011 and 2017, while fonterra’s total staff remuneration increased by $417m in the same period.

Spierings has been a beneficiary of the latter, as indicated by the accompanying table. In his first six years, the co-op’s CEO received total remuneration of $28.6m, including $8.3m in the july 2017 year. These figures are based on an analysis of the employee remuneration tables in fonterra’s financial statements.

It is reasonable to assume his total remuneration will be more than $35m for his seven-year stint, a huge figure considering the co-op’s lacklustre performance under his stewardship.Foley family


Spierings’ remuneration has also been relatively high on a global basis. US companies are now required to publish "CEO pay ratios" under the dodd-frank regulations of 2010. This figure compares a CEO’s compensation to the median remuneration of all company employees.

Fonterra doesn’t release a median remuneration figure but its average employee remuneration was estimated at $92,000 in 2016/17. This meant spierings received 90 times more than the average fonterra employee last year.

It is difficult to compare CEO pay ratios between countries, particularly between unlisted entities and listed entities that issue share options to executives.Foley family wines however, payscale, the US-based website providing salary and compensation information, has calculated that the average US CEO-to-worker pay ratio is 70-to-1. This ratio does not include share-based compensation.

New zealand dairy farmers can pay their CEO whatever they want but they should be aware that they are being extremely generous, even on a global basis.

Spierings told the weekend herald’s jamie gray last week that there had been hits and misses in his seven-year fonterra tenure. He said that he underestimated the complications from investing in the china-listed beingmate and acknowledged that fonterra had been slow to recognise the potential of a2 milk.Employee remuneration

Fonterra had a great opportunity to take a position in a2 milk after freedom foods and dean foods tried to acquire the alternative milk company in mid-2015. After the offer was rejected, freedom foods sold its 10.5 per cent stake for A$64m or a85c a share.

Fonterra could have purchased this holding, which is now worth about $900m. Alternatively, it could have made a full offer for a2 milk at nearly $800m, which would probably have been successful. This compares with a2’s current market value of approximately $9 billion.

Fonterra and a2 have totally different business models but it is still worth comparing their profitability, staff numbers and employee remuneration.Foley family

The consensus fonterra earnings before interest and taxes (ebit) forecast for the current year is $1.18b compared with a2’s consensus ebit forecast of $306m, roughly four-to-one in favour of fonterra.

At the end of the 2017 financial year, fonterra had 21,400 employees while a2 had only 153 staff. Fonterra’s total wage bill was $1.97b in 2016/17 compared with only $20m for a2, while 5245 fonterra staff were paid more than $100,000 compared with only 44 at a2 (see table).

Geoff babidge has had a material shareholding in a2 while theo spierings has had no shares in the diary co-op because only dairy farmers can own these shares. The fonterra shareholders’ fund is not a particularly attractive alternative.Foley family

Unless the co-op opens its shareholder base, it will continue to be run by employees with no skin in the game and who are only attracted to fonterra because of the co-op’s hugely generous remuneration packages.

In 2002 the company changed its name from grove mill wine to the new zealand wine company and the following year listed on the NZAX, the NZX’s alternative market. Investor interest in the stock was limited with few shares traded on the NZAX.

In 2012, new zealand wine merged with foley family wines, which owned the vavasour, goldwater estate, clifford bay, dashwood and te kairanga wine brands.

Foley is a successful american businessman, estimated to be worth US$600m ($833.1m) by forbes, who purchased and resuscitated the insurance group fidelity national financial.Employee remuneration he also has interests in US wineries, golf courses, restaurants, hotels and ski resorts.

Foley is also lead owner of the NHL’s vegas golden knights, the new ice hockey franchise based in las vegas. The golden knights are having a fantastic first year and the NHL’s upcoming playoffs may be taking his attention away from business interests.

Foley family wines‘ shareholders met in blenheim on wednesday, without the presence of their controlling US shareholder, to approve the purchase of mt difficulty wines for $55m. This includes the mt difficulty and roaring meg brands, its property and winemaking facilities.

This means that minority shareholders had access to far less information than the majority shareholder as the notice of meeting stated that mt difficulty’s future maintainable earnings had been assessed "by a US based merger and acquisition specialist who is employed by bill foley".Employee remuneration

Although NZAX listing rules are less stringent than the main NZX listing rules, the overriding philosophy should be full disclosure with all shareholders having the same information.

The stock exchange should have insisted that foley family wines release more information on mt difficulty wines’ financial performance before this week’s important meeting.

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