By Robb M. Stewart
MELBOURNE, Australia--BHP Billiton Ltd. (BHP.AU) will hold the base salary and targeted bonus packages of its chief executive and top management unchanged this fiscal year, despite a sharp turnaround in the resources giant's fortunes.
The annual base salary for CEO Andrew Mackenzie has again been set at US$1.7 million, BHP said in its annual report, released Wednesday. Mr. Mackzenzie'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.
For the last year through June, Mr. Mackenzie's took home slightly more than US$4.55 million in all, after the remuneration committee opted to pay a short-term incentive of 86% of the possible payout he could have received, in part to reflect a mining fatality. That still marked 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.
And while the company's overall financial performance improved over the past year, it was below target mainly due to the impact on production of a strike at the Escondida copper operation in Chile. The company said it also considered Mr. Mackenzie's performance against personal objectives, including productivity and capital spending improvements and an acceleration of diversity targets.
BHP, the world's largest listed miner, said that in line with the approach for Mr. Mackenzie, the base salaries and total target remuneration packages for all senior managers will be held steady this fiscal year.
Carolyn Hewson, chairman of BHP's remuneration committee, said there had been various proposals put forward by some shareholders and other groups to consider alternative remuneration arrangements, particularly in the U.K., but there was no consensus. A recent review by the company confirmed the current approach was appropriate but Ms. Hewson said the committee would consider ways to simplify remuneration while ensuring it remains able to offer competitive pay packages.
With a strong improvement in commodity prices and after a continued focus on cutting costs, BHP recorded a net profit of US$5.89 billion in the 12 months through June against a year-earlier loss of US$6.39 billion, when BHP absorbed an impairment hit on its onshore U.S. oil-and-gas business and a charge for the 2015 dam failure at Samarco.
Write to Robb M. Stewart at [email protected]