Marius Kloppers, the former chief executive of BHP Billiton (BHP), earned $US16 million in his final year as head of the Anglo Australian mining titan, while his successor has taken a pay cut.
Although the South African's five-year tenure was blemished by a failed attempt to take over Rio Tinto PLC and Potash Corp of Saskatchewan Inc and by writedowns relating to its multi-billion-dollar US shale gas purchases, he was praised for fiscal discipline and earned a near $10.4 million bonus for BHP's outperformance of its peers. He has been acting as an advisor to incoming chief executive Andrew MacKenzie and will leave the company next month.
Mr MacKenzie by contrast earned a $2.47 million pay package last year, reflecting 10 months as head of BHP's non-ferrous division and two months as chief executive. The Scotsman took over from Mr. Kloppers in May and has agreed to a 23 per cent cut in the base salary earned by Mr Kloppers, in recognition of the slide in commodity prices this year. He will now earn $1.7 mlllion as a base salary for the fiscal year through June.
Mr MacKenzie also agreed to a lower pension payout, a smaller maximum bonus and has forgone some of the shares that he was awarded as compensation for forgoing his Rio Tinto bonus in order to join BHP in 2008.
Prices for iron ore, coal and other raw materials have fallen amid wavering demand from China, the world's second-biggest economy.
Jac Nasser, BHP's chairman, warned in the company's annual report that commodity markets are under pressure from increased supply and the trend will likely continue in the short term.
"All resources companies will need to improve productivity and be flexible enough to adapt to change in this more challenging environment," he said.
BHP's shareholders will vote on the company's remuneration report at general meetings in London and Perth on October 24 and November 21 respectively. Shareholders will also vote on the company's longterm incentive program, which is up for renewal as it approaches its 10-year anniversary.