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 [email protected]