BHP has slashed the salary of chief executive Andrew Mackenzie in response to operational issues and a fatality involving a coal miner in Queensland last year.
Mackenzie, whose base salary of $US1.7 million ($2.48 million) hasn’t changed since his appointment in 2013, has seen a significant reduction to his bonus.
His total remuneration for the 2019 financial year was $US3.5 million compared with $US4.7 million in the prior year.
Mackenzie received his salary reduction despite BHP returning a record dividend to shareholders. The company stated in its annual report “The year was a challenging one operationally… and the remuneration outcomes for… senior executives reflect this.”
The outcome also took into account healthy, safety, environment and community (HSEC) performance, which reflected the death that occurred at BHP Billiton Mitsubishi Alliance’s (BMA) Saraji coal mine in Queensland last December.
It also reflects BHP’s ongoing operational problems which affected output at the company’s Western Australian iron ore division, and a plant outage at the Olympic Dam in South Australia.
The announcement comes as BHP looks to change the chief executive’s remuneration policy and focus on rewarding long-term performance.
The decision was revealed in BHP’s annual report, which shows progress being made in the company’s ongoing commitment to diversity. BHP boasts a workforce that comprises almost one-in-four female employees, an increase of nearly seven per cent since 2016.
BHP also remains committed to reducing greenhouse gas emissions following its announcement of a $US400 million climate investment program. The company’s operational greenhouse gas emissions in the 2019 financial year were three per cent below its 2017 financial year target baseline.
This forms part of BHP’s commitment to its five-year target to maintain operational greenhouse gas emissions at or below the 2017 levels.