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Director numbers cut

Director numbers cut
Northland farmer Richard Dampney address the general meeting on his proposal for reducing board members in Methven last week. PHOTO SHARON DAVIS

Fonterra shareholders voted overwhelmingly in support of cutting two positions from the dairy giant’s board of directors on Thursday.

A recommendation to Fonterra’s shareholder annual meeting in Methven to reduce the number of directors from 11 to nine received 88.49% support.

The transition to nine directors will come into effect by next year’s general shareholder meeting, leaving six farmer-elected directors and three appointed by the board.

Fonterra chairman Peter McBride championed the cut. He said the work could be effectively delivered by a smaller board, and roughly maintained the balance between farmer-elected and appointed members by removing one of each.

The Fonterra Co-operative Council supported the board’s proposed reduction.

Northland farmer Richard Dampney travelled all the way to Mid Canterbury to speak to four proposed remits. They included reducing the appointed directors by two, rather than reducing one each from farmer-elected and appointed directors.

He also put in remits for former farmer-elected directors to be appointed as independent directors after a five-year stand down and the abolition of the independent assessment panel.

Dampney said some of the “stuff” Fonterra was “pushing at farmers” was trying to ride a horse with two asses.

He said Fonterra had one of its best profits and best dividends this year but achieved that by buying the raw material at the cheapest price.

“The payout you’re giving us is not enough (to cover costs) for some farmers. Farmers are sick of the spin.”

Dampney said shareholders would feel less disenfranchised if the board was reduced by two independent directors.

Both the board and the Co-operative Council were against Dampney's proposals, which meant that even if more than three-quarters of the shareholders voted for Dampney's proposals they required changes to the constitution would not be able to be made.

McBride said Dampney was a passionate member of the co-operative but had a different perspective on how to achieve the best outcomes.

"It's not you and us - it's all of us together," he said.

One shareholder spoke against a proposal to increase the pay for the board members, saying it wasn't appropriate with farmers struggling with low milk payouts.

However, the proposal to increase the chair's remuneration by $14,000 and directors' pay by $5000 was approved by 76% of shareholders.

McBride will now get $484,000 and elected directors will earn $196,500.

A pay rise of just over 3% was also approved for Co-operative Councillors.

More than 90% of shareholders approved changes to the composition of the independent milk price panel who recommend a base milk price to Fonterra.

Fonterra collects more than three-quarters of the raw milk produced in New Zealand.

One shareholder raised questions about the sudden departure of chief financial officer Neil Beaumont.

Hurrell said the details of Beaumont exit was confidential. He confirmed it was a mutual agreement and had nothing to do the Fonterra's financial performance - and said the momentum Beaumont brought would continue.

By Sharon Davis