Fonterra is standing by the multi-million dollar salaries it pays its top earners, after announcing it is getting rid of at least 523 middle and lower management staff.

The dairy giant's last financial statement showed more than 4000 of its 18,000 world-wide staff earn at least $100,000 per year, while 17 staff earn more than $1 million annually.

Chief executive Theo Spierings earns $4.18 million per annum, following a $660,000 pay rise the previous year.

Photo: RNZ / Diego Opatowski

Fonterra Group Director of Cooperative Affairs Miles Hurrell said the company was paying the fair market price.

He said Fonterra would consider salary cuts at any level as part of its ongoing review, but described its executive salary structure as "efficient".

"We're a global organisation and we pay benchmark salaries to attract the right people," he said.

"Our salaries are market-based... the whole business is being looked at end-to-end, it's around how we can optimise the business around the board," he said.

Fonterra said the roles being cut were in several areas, including finance, information services and human resources.

It said the cuts would result in payroll savings of up to $60 million.

Labour Party primary industries spokesman Damien O'Connor said those at the top needed to look at their own performance first.

"Given the large number of people who are going to lose their jobs, the person ultimately responsible should take a hit himself, and that's Theo Spierings," he said.

"It's hard to believe that the people who are losing their jobs are responsible for the company's performance - it's the board and executives who make the key decisions."

Federated Farmers' former Southland president Russell MacPherson said it was not a matter of dollar figures.

"New Zealanders get hung up on how much people are earning, the right question is - are we getting value for money?" he said.

"The people who are being paid the money need to minimise the risk that comes from the market, and need to put together the right strategies."

In February, Fonterra admitted human error had cost it its multi-million dollar licence to export cheese to the United States.

"The person who forgot to sign the multi-million dollar cheese deal with America - we're certainly not getting value out of that person and I hope that person is no longer working for Fonterra," said Mr MacPherson.

More than a third of Fonterra's 18,000 staff are based overseas, but Mr Hurrell said most of those facing redundancy were New Zealand-based.

Agribusiness analyst Keith Woodford said the job cuts would mostly affect lower and middle management.

"I feel very sorry for those [523] people - this is going to affect people who need that money and they're not going to be very happy."

Fonterra's highest earners