Clampdown at mining giant as pay and perks cut
MINING giant BHP Billiton has cut its chairman’ s annual pay and clamped down on perks that allowed the spouses of nonexecutive board members togo on business trips.
The company has reduced incoming chairman Ken MacKenzie’s salary by 8 per cent from $960,000 (£710,000) to $880,000 (£651,000).
MacKenzie, who joined the board as a non-executive director a year ago, was promoted to chairman at the beginning of the month.
The company said the cut, effective from the beginning of last July, was ‘an outcome supported by the new chairman’.
It said the decisions had followed an annual review into pay that included ‘ benchmarking against peer companies’.
Sarah Wilson, at shareholder advisers Manifest, said the pay cut was an unusual move for a FTSE 100 company but one that she saw as positive.
‘Getting rid of the travel allowance is also very much something that shareholders will welcome,’ she said.
‘This is really how you would want companies to respond to feedback and it shows that it is possible for companies to change without coming to blows with investors.
‘The company should be applauded for understanding the way the market is moving.’
Earlier this month an investiga- t i on by The Mail on Sunday revealed that almost a third of FTSE 100 firms have been subjected to a pay revolt vote of more than 20 per cent in the past four years. The Government has said that in future such firms will be placed on a blacklist in an effort to embarrass them into reducing excessive pay and perks.
It is the second time BHP has reduced the chairman’s pay within three years. It slashed the salary of the former incumbent, Jac Nasser, by 13 per cent from its previous level of $1.1 million (£810,000) in July 2015.
Shareholders will be invited to vote on the modifications to pay and perks at the annual meeting next month. Chief e xecuti ve Andrew Mackenzie retains his right to take his spouse away on business worldwide with the company footing the bill.
He was paid £4.1 million after the company swung back into profit in its last financial year. That compared with £1.7 million last year when he did not take a bonus following the death of 19 people in an accident in Brazil.
This year his health and safety bonus was cut by £180,000 after the death of an employee in Chile.