BHP Billiton Top Executives Get No Pay Rise Despite A Profit -- Update
September 19 2017 - 8:09PM
Dow Jones News
By Robb M. Stewart
MELBOURNE, Australia--A recovery in the fortunes of global
miners has encouraged increased payouts to shareholders, but BHP
Billiton Ltd. is following other mining companies in stating that
salaries of its top bosses wouldn't rise this fiscal.
The world's largest listed mining said Wednesday that it would
keep the base pay and targeted bonus packages of Chief Executive
Andrew Mackenzie and top management unchanged this fiscal year
despite the company swinging back to a profit and offering a
threefold increase in its latest dividend.
That leaves Mr. Mackenzie's pay, before incentives, in line with
the leaders of other big miners.
BHP and its peers have surged back to health over the last year
as prices for the minerals they sell rebounded and following a
stretch of belt-tightening that has seen unwanted assets sold and
spending held in check. Shareholders have been rewarded with
increased, or resumed, dividends and share buybacks by some
companies.
BHP swung to a profit in the last fiscal year and said it would
pay an increased second-half dividend.
Ken MacKenzie, who has taken over as chairman at BHP from Jac
Nasser, said in the company's annual report that he aimed to engage
with investors on a regular basis, recognizing the importance of
cash returns to shareholders.
The miner has been under pressure to focus on shareholder
returns after months of campaigning by New York hedge fund Elliott
Management Corp., which has been critical of past investments and
has called for sweeping changes including an exit from the
company's U.S. shale oil-and-gas business.
The annual base salary for Mr. Mackenzie has again been set at
US$1.7 million, BHP said. Mr. Mackenzie's base pay hasn't changed
since he succeeded Marius Kloppers in 2013 and BHP set a sharply
lower base for its incoming boss than the almost US$2.22 million
Mr. Kloppers left on.
Still, Mr. Mackenzie's took home slightly more than US$4.55
million in all for the latest fiscal year through June, a sharp
jump on the US$2.24 million paid the year before when the CEO
didn't receive a short-term incentive following the fatal collapse
of a dam at the Samarco iron-ore venture in Brazil.
In line with the approach for Mr. Mackenzie, BHP's remuneration
committee said the base salaries and total target remuneration
packages for all senior managers will be held steady this fiscal
year.
Carolyn Hewson, chairman of the committee, acknowledged various
proposals had been put forward by some shareholders and other
groups to consider alternative remuneration arrangements,
particularly in the U.K., but there was no aligned view. She said
the committee would consider ways to simplify pay, yet also
continue to attract and retain executives.
Other big miners have also kept executive pay in check.
Ivan Glasenberg, CEO of Swiss mining and trading company
Glencore PLC, has waived his entitlement to any increase in salary
since 2011 and last year again earned a base pay of just under
GBP1.45 million (US$1.96 million), which with his pension meant a
GBP1.51 million (US$2.04 million) package for the year. That even
as Glencore in December said it was reinstating dividends,
targeting a return of US$1 billion to shareholders over 2017.
Anglo American PLC CEO Mark Cutifani, saw his base salary kept
on hold at GBP1.26 million (US$1.70 million) for 2016, although
with his pension and an annual cash bonus he took home slightly
less than GBP4 million (US$5.4 million). His pay for the coming
year won't be known for months yet, but the London-based miner
reinstated dividends for the first half of this year after
reporting a surge in profit.
Rio Tinto PLC's Jean-Sebastien Jacques, who took over as CEO
from Sam Walsh midway through last year, collected a base salary of
US$1.2 million in 2016 for a total short-term package of US$2.42
million. That compares with Mr. Walsh's base pay for 2015 of
US$1.49 million. The British-Australian miner bounced back to
profit last year, and for the first half of 2017 it said it was
returning US$3 billion in cash to shareholders after earnings
jumped after commodity prices climbed and it reduced debt
further.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
September 19, 2017 20:54 ET (00:54 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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