BHP Says Pandemic Weighed on CEO's Annual Bonus
By David Winning
SYDNEY--BHP Group Ltd. said the coronavirus pandemic, which
pushed up costs at key mines and disrupted production, had weighed
on its chief executive's annual bonus.
BHP said its financial performance fell short of a target laid
out its remuneration policy, partly due to the impact of the
pandemic. The world's largest-listed mining company also said
production missed expectations at several operations, including its
Australian iron-ore and coal businesses and some of its petroleum
BHP said Chief Executive Mike Henry's bonus totaled $1.96
million for the 12 months through June, 2020. That was on top of
his base salary and benefits, including pension contributions, of
$941,000. In addition, Mr. Henry received $3.17 million under the
company's long-term incentive plan for an award set in 2015 when he
headed up the coal business.
Last month, BHP said the impact of the Covid-19 pandemic on its
operations totaled $348 million before tax. That figure included an
exceptional charge of $183 million reflecting the cost of moving
key staff closer to operations, implementing new screening measures
and strengthening hygiene.
BHP's remuneration committee concluded that "while this was
outside the control of management, the direct costs and volume
impacts of Covid-19 should flow through" to its assessment of
return on capital employed, a key benchmark of financial
"The Committee considered this was appropriate in light of the
global impacts of the Covid-19 pandemic," BHP said in its annual
report. This adjustment reduced return on capital employed by 0.2%,
When deciding executive remuneration, BHP used a
return-on-capital-employed target of 19.9%. It said the outcome for
fiscal 2020 was 18.2%.
BHP said that also reduced the bonus award to former chief
executive Andrew Mackenzie, who stepped down midway through the
The company said Mr. Henry scored highly on health and safety,
which accounts for 25% of its bonus, and achieved individual goals
such as improving the value of BHP's asset portfolio.
Write to David Winning at firstname.lastname@example.org
(END) Dow Jones Newswires
September 14, 2020 19:17 ET (23:17 GMT)
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