BHP Billiton boss Andrew Mackenzie earned $US8 million in his first year at the helm of the global miner but now faces a pay freeze.
BHP Billiton boss Andrew Mackenzie earned $US8 million in the 2014 financial year, but he will have his salary frozen amid the resources giant’s cost cutting campaign.
The pay freeze comes despite BHP saying Mr Mackenzie had performed well and achieved significant productivity improvements during his first full year in the job.
His base salary was $US1.7 million and he will also pocket bonuses worth $US5.77 million after the mining giant’s 2013/14 profit beat company targets to reach $US13.8 billion.
Under his stewardship BHP has cut more than 1,000 jobs in Australia, including 700 at its BMA coal mines in Queensland, more than 270 at its iron ore business in Western Australia, and 163 from its Hunter Valley coal operations in NSW.
BHP says it has made more than $US6.6 billion worth of productivity gains in two years.
Still, Mr Mackenzie’s salary will not change in the 2015 financial year, and the targets for his short-and-long-term bonuses will also stay on hold.
“Consistent with the approach for Mr Mackenzie, the base salaries and total target remuneration packages for other group management committee members have also been held constant for full year 2015,” chairman Jac Nasser said in the company’s annual report, released on Thursday.
Mr Mackenzie’s predecessor Marius Kloppers earned almost $US16 million in his final full year at BHP.
Since then BHP has cut the amount it pays senior executives and directors by 25 per cent.
Mr Nasser defended BHP’s executive pay packets in the face of opposition from shareholders in 2013 after the company’s profit fell 30 per cent to $US10.9 billion.
Meanwhile, BHP is considering listing its new resources entity NewCo on the London stock market, a move analysts say will placate disappointed UK investors.
BHP announced plans in August to spin off most of its aluminium, coal, manganese, nickel and silver assets into NewCo, which will be based in Australia and listed on the local share market as well as in South Africa.
But since then, BHP’s London investors have expressed disappointment that NewCo would not be listed there.
Fat Prophets resources analyst David Lennox said it appeared that UK fund managers might not vote favourably on the demerger unless NewCo is listed in London.
“It’s purely a PR exercise to placate fund managers in the UK,” he said.
“Some fund managers might have specific UK mandates but in today’s international environment you would have those removed.”
He said the listing cost would not be significant and NewCo would not need to maintain a great a management presence in the UK.
BHP’s board will make a decision on proceeding with the spin off of assets into NewCo once government, tax, regulatory and third party approvals are secured.
Shareholders will then vote on the proposed demerger, which is expected to be completed before June 2015.