The company's remuneration committee opted to reduce by 35 per cent the number of shares awarded to all of its key executives under a long-standing bonus scheme dating from just prior to the Great Financial Crisis.
The decision means Andrew Mackenzie will lose out on 158,000 shares, worth around $5.2 million in total.
Andrew Mackenzie, who was appointed CEO of BHP in May following the departure of Marius Kloppers, has further decided to relinquish 50,000 of the company's London-listed shares, which are worth nearly $1.7 million, bringing the total reduction in his bonus to nearly $7 million.
Mackenzie will nonetheless receive around $8 million worth of shares.
The decision comes just after BHP Billiton announced a sharp plunge in profits for the fiscal year just ended.
The world’s biggest mining
company fell well short of consensus expectations with net profits of USD$10.9 billion ($12.3 billion) during the last fiscal year, for a year-on-year dive of 29.5 per cent.
While executives qualified for their full bonuses under the conditions originally set, BHP's remuneration committee it nonetheless retained the "discretion" to withhold the payments under certain conditions.
"This year the committee, with the support of the board, exercised that discretion," it said.
The committee said that a "range of factors" had been taken into consideration when making its decision - including the fact that investors have seen a negative total return over the five-year period, and that BHP needed a policy which signified "a more modest approach to remuneration befitting the times."
Analysts say the decision could portend a new era of austerity for the corporate sector in general and miners
in particular, as boards become more sensitive to the rising discontent of shareholders.
Published on 27 August 2013
Marc Howe is one of Sourceable's lead writers on technology and business issues in relation to Australia's built environment.
He has accumulated extensive experience as an editor and reporter both in Australia and abroad, and has covered a broad range of topics during his press career...