Acceptance of inequality at heart of CEO pay - researcher

by RNZ / 26 September, 2017

Fonterra chief executive Theo Spierings. Photo: RNZ / Kim Baker Wilson

Chief executives are paid more in societies that are more tolerant of inequality, a researcher says.

It was revealed yesterday that Fonterra chief executive Theo Spierings is New Zealand's highest paid worker, earning $8.3 million in the past year.

That's about $160,000 a week, according to Fonterra's annual report.

It's an increase of about 80 percent, up from $4.6m last year, but was based on a jump in bonuses rather than an expanded base salary.

Fonterra has twenty five staff earning more than $1m a year, and a hundred who earn between $500,000 and $1m.

Similarly well paid bosses include Sky City's former chief executive Nigel Morrison, who earned $6.4m last year and Fletcher Building's former chief Mark Adamson on $4.7m.

Fonterra chairman John Wilson defended the pay rates, saying the cooperative used independent advisors to help set the figures.

It comes as the cooperative reported an 11 percent slump in profits yesterday as a rebound in milk prices hit its profit margins.

Federated Farmers dairy head Chris Lewis said not all farmers were happy with Mr Spierings' pay level and he expected it to be discussed at Fonterra's next shareholder meeting.

Max Rashbrooke. Photo: Matt Bialostocki

Researcher Max Rashbrooke specialises in salary trends.

He told Morning Report research showed that New Zealand chief executives received large salaries whether their companies did well or not.

"They've kind of got a bit of a bet each way."

Mr Rashbrooke said chief executives earned far more than their predecessors a generation ago but there was no evidence they were more effective.

"They are paid more because they're in a society that's much more tolerant of inequality.

"Whereas conversely, if you look at a country like Japan where you have people running huge multinational companies, most Japanese chief executives would be paid less than $1m New Zealand.

"Because in Japan it's still, to a large extent, culturally unacceptable to have those very large salaries which people don't regard as deserved."

 

This article was originally published by RNZ.

MostReadArticlesCollectionWidget - Most Read - Used in articles
AdvertModule - Advert - M-Rec / Halfpage

Latest

Win a double pass to Waru
81958 2017-10-24 00:00:00Z Win

Win a double pass to Waru

by The Listener

From eight Māori women directors come eight connected stories, each taking place at the same time during the tangi of a small boy, Waru.

Read more
When Sir Bob Jones met Muhammad Ali
81845 2017-10-23 00:00:00Z Books

When Sir Bob Jones met Muhammad Ali

by Bob Jones

A new biography finds fault with the legendary fighter, but praise wins by a mile.

Read more
Announcing the finalists of the NZ Craft Awards 2017
81876 2017-10-23 00:00:00Z Culture

Announcing the finalists of the NZ Craft Awards 20…

by NZTV Craft Awards

The finalists of the New Zealand Craft Awards have been announced and here is the complete list.

Read more
Hand, foot and mouth disease is not nearly as scary it seems
81868 2017-10-23 00:00:00Z Health

Hand, foot and mouth disease is not nearly as scar…

by Ruth Nichol

It sounds alarmingly like foot and mouth disease, but all they have in common is they are viral.

Read more
What to do in Auckland if you're a local who wants the tourist experience
81902 2017-10-23 00:00:00Z Travel

What to do in Auckland if you're a local who wants…

by Pamela Wade

After living in Auckland for almost 25 years, Pamela Wade decides to reacquaint herself with the city where she still feels like a stranger.

Read more
The Lesley Calvert cold case: 40 years of torment
80160 2017-10-22 00:00:00Z Crime

The Lesley Calvert cold case: 40 years of torment

by Chris Birt

The mum-of-three was found on a hillside in sight of her farmhouse where she'd disappeared 7 months earlier. Suspicions swirled, but no answers found.

Read more
When I went to Rimutaka Prison for a three-course meal
81858 2017-10-22 00:00:00Z Food

When I went to Rimutaka Prison for a three-course …

by Lauraine Jacobs

A three-course meal inside prison walls proves a rewarding experience for food columnist Lauraine Jacobs.

Read more
The Lundy murders: Inside the case that gripped the nation for 17 years
81945 2017-10-21 07:23:00Z Crime

The Lundy murders: Inside the case that gripped th…

by Anne Marie May

A court reporter who's covered both of Mark Lundy's High Court trials looks at how the case has evolved, as the Court of Appeal deliberates his fate.

Read more