Sam Walsh, the retiring CEO of Rio Tinto, has had 80% of his pay withheld while the mining giant investigates payments made to a consultant on an iron ore project in Africa.
According to the annual report, Walsh was paid $1.66 million in 2016 for his last nine months at the company, a long way from the previous year’s $9.14 million even when considering he worked another three months.
Missing is about $9.7 million in short and long term incentives he is due under Rio’s executive remuneration plans.
Two executives have already lost their jobs after an internal investigation into 2011 contracts with a consultant who provided advisory services on the Simandou iron project in Guinea, West Africa.
“The board has determined that it would be inappropriate, while investigations are ongoing, to make any determination (on incentive payments) about Sam Walsh, our former chief executive, or about his outstanding remuneration,” the company says.
Rio and Walsh have agreed to defer the payment of his 2016 short term incentive award and all remaining unvested long term incentive payments for a minimum of two years.
Under the agreement, Walsh will get half his incentives on December 31, 2018, and the rest by December 2020.
“The payment of any of these awards is contingent on there being no information in connection with the Simandou matter which would justify the remuneration committee making a determination to cancel, defer or reduce these awards,” the company says.
Walsh’s long term incentive is worth about $7.97 million and a short term payout of $1.63 million.
But Walsh is still doing well on superannuation. He currently has a lump sum benefit valued at $10.77 million.
On his retirement last year, Walsh was also paid out the balance of unused long-service leave and annual leave, a combined total of $2.85 million.
Rio posted a net profit of $US4.6 billion ($A6 billion) in 2016, a result boosted by the global commodity rally.