BHP’s Andrew Mackenzie sees total pay climb to $4.65m

Andrew Mackenzie, chief executive at BHP Billiton, took home an extra $100,000 last year but did not receive any long-term bonus payments as the company’s performance lagged its peers.

The Scottish-born geologist, who has led the world’s biggest mining company since 2013, had a base salary of $1.7m in the year to June, the same as in 2017, plus a short-term bonus of $2.4m, paid equally in cash and deferred shares.

That took his total remuneration under UK accounting rules to $4.65m, including benefits and pension contributions of $509,000, up from $4.55m, according to BHP’s annual report that was published on Tuesday.

But Mr Mackenzie saw more than 200,000 shares awarded five years ago as part of a long-term incentive programme lapse as total shareholder returns — share price appreciation and dividends paid — fell by 9.3 per cent over the period, compared with a group of peer companies, which saw a 9.6 per cent increase.

“This level of performance results in zero vesting for the 2013 LTIP awards and according the awards have lapsed,” said Carolyn Hewson, head of the BHP’s remuneration committee.

Since Mr Mackenzie took the helm in 2013, shares in BHP have barely changed. However, they have climbed 6 per cent since March, outperforming rivals including Rio Tinto and Glencore, as the company’s simplification programme has started to bear fruit.

The company recently announced a record final dividend and is set to return all of the $10.5bn proceeds from the sale of its lossmaking shale division to shareholders. Mr Mackenzie’s short-term incentives for the 2018 fiscal year were capped at 90 per cent because of lower production and two fatalities.

In the annual report, BHP disclosed Ken Mackenzie, who replaced Jac Nasser as BHP’s chairman at the end of August 2017, was paid $826,000 in fees and benefits. 

BHP also said it had fallen short of achieving its annual target of increasing the number of women in the company by 3 per cent in 2018 — part of its aspirational goal to achieve gender balance by 2025.

At the end of 2018, there were 915 more women at BHP than at the same time in the previous year, contributing to an increase in the representation of women by 1.9 per cent up to a total of 22.4 per cent. 

In a separate filing, the miner said its shareholders would be asked to vote on a change of the company’s name to simply “BHP Group” at its annual general meetings in October and November.

The move would erase one of the most visible remnants of the 2001 deals between BHP and UK-listed Billiton, which helped create the world’s biggest mining company.

It comes after BHP spun off coal, manganese, aluminium and nickel assets into a new company called South32 in 2015, effectively unpicking most of the merger with Billiton.

BHP launched a rebranding campaign last year, which emphasised its Australian roots and its birthplace of Broken Hill, a remote mining town in the outback of New South Wales. But it did not change its registered name at the time.

Billiton was established in 1860 to mine tin on the island of Belitung in Indonesia.