The head of a multinational resources company resigned just weeks after losing nearly a quarter of his annual remuneration on November 14.
BHP CEO Andrew Mackenzie (pictured) has formally resigned from the top job two months after receiving a 24 per cent pay cut to US$3.5 million (A$5.1M) compared to the previous 2018 financial year (FY2018). His earnings include his base salary of US$1.7M (A$2.5M) plus a variety of performance related bonuses, according to the Australian Associated Press (AAP).
Workplace tragedy blamed
Mackenzie led the company through the tragic December 2018 death of coal miner Allan Houston, 49, whose bulldozer rolled from an elevated position with disastrous consequences at the Saraji Coal Mine, 231 km southwest of Mackay. The company’s remuneration committee was not impressed by this fatality and only rated the outgoing CEO’s performance as 48 out of 100.
“While shareholders have benefited during FY2019 from positive share price growth and significant shareholder returns, the year was a challenging one operationally for BHP, and the remuneration outcomes for FY2019 for our senior executives reflect this,” committee chairwoman Carolyn Hewson said in BHP’s 2019 annual report according to AAP.
No termination payout
Mackenzie will step down from his role on New Year’s Eve and his last day at BHP will be on 30 June 2020. Since he is working until his last day, the company will not make any employment termination payment to him. Mackenzie will be allowed to hold onto his shares in the company for two years beyond his official termination date.
“Choosing the right time to retire has not been an easy decision,” Mackenzie said in a public statement. “However, the company is in a good position.”
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BHP has promoted president operations minerals Australia Mike Henry to replace Mackenzie at the beginning of the New Year. The new appointee wasted no time in stressing the importance of a safe workplace.
“We must operate safely, with discipline and reduce our impact on the environment,” said Canadian-born Henry who is also the vice chair of the Minerals Council of Australia.
‘High performance’ without a pay rise
Chairman Ken MacKenzie believes the company will be more high performing under new leadership.
“Mike Henry’s deep operational and commercial experience, developed in a global career spanning the Americas, Europe, Asia and Australia, is the perfect mix for our next CEO,” the chairman said. “I am confident his discipline and focus will deliver a culture of high performance and returns for BHP.”
Henry will be paid the same base salary as his predecessor.