Paladin boss prepared for more sacrifice
THE 25 per cent pay cut that Paladin Energy boss John Borshoff imposed upon himself may be extended beyond its 12-month term, if such drastic measures are needed to salvage the company.
THE 25 per cent pay cut that Paladin Energy boss John Borshoff imposed upon himself may be extended beyond its 12-month term, if such drastic measures are needed to salvage the company.That pledge from Mr Borshoff, the company founder, comes as Paladin employees prepare to reacquaint themselves with the economy-class cabin when flying between the company's operations in Australia, Canada and Africa.Mr Borshoff surprised the market in October when he announced plans to temporarily cut his $2.52 million remuneration package down to $1.89 million as part of a cost-cutting drive within the corporate division of the uranium mining company."There is about a $7 million cut we are hoping to achieve at the corporate level, of which about half a million is mine. But still, that's a bit," he told BusinessDay.The cut was imposed for just one year, but when asked if he would extend it, Mr Borshoff said: "If it justifies it, yes. It shows a bit of leadership."While remuneration of almost $2 million is still pretty good within a company that doesn't turn a profit, Mr Borshoff says he will naturally notice the change to his hip pocket in the months ahead."You are used to so much, and to just say 'I will do it', it takes a fair bit of will. It's like a house, no matter how big your house is, you fill it up."Criticism of Paladin and Mr Borshoff has been intense and personal throughout this year, as a series of missed targets added to the pressure that all uranium stocks felt in the wake of the Fukushima nuclear disaster.Funds managers Perpetual listed "management quality" among their reasons why Paladin did not meet the investment criteria for their global resources portfolio, while one Paladin shareholder was asked to refrain from using aggressive references after he wrote a letter to the company suggesting that Mr Borshoff and his executive colleagues should be "lynched".Despite that pressure, Mr Borshoff said the decision to take the pay cut was his.But nor will the boss be carrying the full load of belt-tightening at Paladin. "It can't sit there as an outlier," he said."Other people are expected to take some [action], maybe travel less or do less and I think it just spreads that weight across the whole group. People will be travelling economy, there will be a whole lot of issues, less consultants will be used right across the board."Spending on exploration will also be slowed, but Mr Borshoff said there was one aspect of the balance sheet that he was determined to protect from the razor gang. When asked if his fellow executives would be asked to match his 25 per cent pay cut, Mr Borshoff said: "No and I wouldn't expect them to."Paladin has not revealed what shape the company's finances will need to be in for Mr Borshoff's pay to return to its full level next financial year, but already there are encouraging signs.Paladin shares have risen from their October low of $1.11 to close at $1.50 on Friday, but still well below the January high of $5.57.