The Samarco mine disaster in Brazil has seen BHP Billiton’s board drop the bonus that would have been paid to CEO, Andrew Mackenzie for the year to June 30. Nineteen people died in the wake of the dam burst and flooding and dozens were injured, Several villages were destroyed and damage in the billions of dollars was caused.
BHP will also cut the bonuses to be paid to other company executives.
A spokesman for BHP in London told the media that Mr. Mackenzie won’t be paid his short-term incentive bonus for the year ended June 30 but didn’t specify whether Mr. Mackenzie’s other benefits such as his pension would be affected.
Details of the cuts and the resultant senior management compensation packages will be revealed when BHP’s annual report is released in early September.
Mr. Mackenzie earned a salary of $1.7 million in 2014-15, an amount that has been frozen since he took over as CEO in 2013 from Marius Kloppers. Mr McKenzie also was paid $2.3 million to Mr. Mackenzie as a bonus, half in cash and half in deferred shares due to vest in 2017-18.
Mr. MacKenzie’s bonus was scrapped after the company reported a net loss of $US6.39 billion for the June 30 year. This included $US2.2 billion in of costs and losses from the dam burst. The net loss also includes $US4.9 billion in impairments related to its U.S. oil and gas business and the impact of lower commodity prices.
“Having considered all these elements holistically, the board and committee determined that the [bonus] outcome for the CEO for FY2016 should be zero,” said a company spokesman was quoted on Marketwatch.com.
BHP said the decision is in keeping with Mr. Mackenzie’s own recommendation and follows similar action taken by the board in previous years. BHP shares fell 3.66% in London overnight.
