BHP's new boss cuts his salary and ousts rivals
BHP's incoming chief executive Andrew Mackenzie has begun with a bang, cutting his own expected salary by a quarter and ousting the trio of senior staff who were chief contenders for his new job.
Hitting the ground running before he has even started, Mr Mackenzie is on a mission to cut spending as the mining industry faces rising costs and falling commodity prices, starting with senior management.
Mike Yeager, the head of petroleum; Alberto Calderon, chief executive of the aluminium and nickel division, and Marcus Randolph, head of ferrous and coal, will all leave after Mr Mackenzie takes over the top job next month.
Furthermore, Mr Mackenzie will slash his pay from the $2.21m (£1.5m) earned by his predecessor, Marius Kloppers, to $1.7m, while his pension payments will be just a quarter of his salary, compared to 40 per cent when Mr Kloppers was at the helm.
However, BHP conceded that Mr Mackenzie could still earn as much as $7.6m a year if he meets his bonus targets, and this could rise as high as $12.58m a year if the company performs exceptionally well.
By contrast, Mr Kloppus earned a total of $9.82m in salary, retirement benefits and a long-term incentive plan in the year to 30 June, 2012, despite waiving his short-term bonus in the wake of a hefty writedown on BHP's US shale business.
"With the company's focus having shifted to an even greater emphasis on operational excellence, the removal of a layer of management brings the operations closer to the CEO. All this will be critical in driving our agenda," Mr Mackenzie said.
Mr Kloppers resigned in February having run the business for more than five years, after multi-billion dollar writedowns forced BHP's profits down.
The business has been restructured into five units, with each head reporting directly to Mr Mackenzie. They are petroleum and potash, copper, iron ore, coal and aluminium, manganese and nickel. Mr Mackenzie was formerly BHP's head of base metals and coal.
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