OPINON: Shareholders must have their say over ‘fat cat’ salaries
The latest sky-rocketing salary the Fonterra board has gifted their chief executive, Theo Spierings, is getting into the realms of the ridiculous.
His base salary is $2.463 million, added to this is $170,000 for superannuation, short term incentive pay (whatever that is) amounts to $1.8 million and long term incentive pay totals $3.8 million.
That gives Mr Spierings $8.31 million to play around with.
Crunching this number down it means $160,000 is pumped into his bank account each week.
He deserves it, says the board, he has met the performance standards we want to achieve and it’s in line with what chief executives in Australia and Europe receive.
The latter comment is the time worn line we hear all the time when company bosses are handed ever ballooning seven figure salaries.
The board might think Mr Spierings has earned a fat salary but what about the company shareholders?
Do they think Mr Spierings has earned it?
At present shareholders’ views don’t count. It’s left to the board to decide.
But there is a trend overseas to empower shareholders. In Europe, shareholders of many companies made clear their opposition to high pays for directors who have often presided over significant losses.
As a result, the European Union approved earlier this year shareholders having the right to vote on remuneration policy for company directors.
It’s time New Zealand looked at doing the same. Shareholders should be given the power to hold director and bosses to account.
Rt Hon Winston Peters, NZ First Leader