Rio Tinto faces wrath of investors

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The Independent Online
RIO TINTO, the largest mining group in the world, faced a barrage of abuse from shareholders yesterday about a range of complaints from directors' bonuses to accusations that it continues to ruin the land of indigenous tribes. The group's annual general meeting degenerated into a stormy and bad tempered affair as investors vented their anger on Robert Wilson, the chairman.

There was an outcry from several shareholders over a new incentive scheme, which they claimed would award executives and managers for only a "mediocre" performance. Under the plan, Rio Tinto's performance will be compared to 15 other mining groups. The previous plan was based on the FTSE 100 stocks. Managers will be able to get a 100 per cent bonus for coming fourth in the list of 15 companies and 50 per cent bonus even if it finishes half way up the league table.

The decision to change the scheme, taken after the group underperformed the FTSE 100 last year, was met with derision by some investors. One irate shareholder said: "This is absolutely ludicrous. It appears that people have to be bribed to perform."

There was also a call for Sir Richard Sykes, the non-executive chairman of the remuneration committee and the man responsible for sanctioning the new scheme, to step down. As head of Glaxo Wellcome, Sir Richard has recently come under attack for his role in the aborted merger with SmithKline Beecham. One shareholder in both Rio Tinto and Glaxo said: "Sir Richard has many other things to do and it would be a good idea for him to reduce his responsibilities."

Shareholders coming into the meeting faced protests from disgruntled unions and numerous environmental and human rights pressure groups.

They claimed that Rio Tinto continued to ignore the land rights of the local population at the Grasberg mine at Irian Jaya in Indonesia and ignored human rights abuses.

In the meeting John Maitland, the head of Australia's coal mining union, claimed that Rio Tinto had awarded extra benefits to workers outside the union. Mr Wilson fired back with a stinging attack on the unions, claiming their campaign was "one of deceit in support of the indefensible, bereft of integrity and propaganda at its most cynical".

He read out a letter from Nelson Mandela which claimed that the unions had deliberately misinterpreted the President of South Africa's comments. He had earlier labelled Mr Maitland as "the Arthur Scargill of Australia".