Chief executives are paid more in societies that are more tolerant of inequality, a researcher says.
Fonterra chief executive Theo Spierings. Photo: RNZ / Kim Baker Wilson
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."
"Fundamentally companies pay what they think they can get away with in the current climate... what they think they have to" - Max Rashbrooke
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."