BHP chief executive Andrew Mackenzie’s pay is about to take a big fall.
He won’t be getting a short term bonus after BHP earlier this month posted a $US6.385 billion ($A8.28 billion) loss for the year.
The decision to rate Mackenzie’s short term incentive at zero comes from the board of directors and its remuneration committee.
“The (fatal) tailings dam failure at Samarco in November 2015 was a key consideration, along with the ongoing decline in commodity markets and its associated impact on our performance,” a BHP spokesperson told Business Insider.
Mackenzie had previously told the board and remuneration committee that he thought the short term incentive should be zero.
The annual bonuses of his senior leadership will also be cut.
Full details on senior executive pay will be released with BHP’s annual report on September 21.
Mackenzie got a base salary of $1.7 million last year but other benefits and bonuses brought the number to $4.58 million, according to the 2015 annual report. The short term incentive added up to $2.31 million.
This was well down on his 2014 payout of almost $8 million.
BHP’s big loss for 2016 includes includes $US7.7 billion (almost $A10 billion) of after tax impairments; $US4.9 billion ($A6.3 billion) against the value of onshore US assets; $US2.2 billion ($A2.8 billion) for the impact of the Samarco dam failure; $US570 million ($A740 million) for global taxation matters.
Dividends to shareholders have also been cut.
The mining giant declared a fully franked final dividend of US 14 cents. Under the new dividend policy, this is made up of a minimum payout of 8 US cents a share plus an extra 6 US cents. This brought the full year dividend to 30 US cents, a 76% drop on 2015.