Anglo-Australian mining giant Rio Tinto is facing a shareholder rebellion linked to a controversy over former CEO Jean-Sébastien Jacques' £7.2 million (€8.6 million) bonus, making his largest ever pay packet since quitting his role.
Rio Tinto logo on helmet. Credit: Rio Tinto
Credit: Rio Tinto
61% of shareholders last week voted against the companies remuneration package which looked to give this last package to Jacques following his ousting after the company blew up a 46,000-year-old cave system at Juukan Gorge, Western Australia. The cave system was an important site of cultural heritage for the local indigenous people.
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Jacques was stripped of his bonuses worth an estimated £2.7 million but his pay continued to rise last year, reportedly increasing by as much as 20%.
In addition, he has been allowed to keep shares accrued while he was still the head of the company.
The two other executives dismissed alongside Jacques, Chris Salisbury and Simone Niven were also given "termination benefits" worth $1 million and $1.3 million respectively.
The shareholder revolt has also continued to sour relations between outgoing chairman Simon Thompson and new CEO Jakob Strausholm who have been attempting to mend tied between the company and its financiers which were severely damaged following the Juukan Gorge controversy.
The revolt, while significant, is also not legally binding and is entirely advisory.
Thompson revealed in early March he won't be seeking re-election as chairman owing to what he saw as his accountability for the tragedy.
At a shareholder meeting, he said: “I absolutely understand the sense of outrage that people feel at the remuneration settlements that have been made for the departing executives.”
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Tinto has since announced it will be looking to work with its shareholders to come up with a new strategy and "reflect" on any input as it looks to implement the remuneration package.
Thompson revealed to the meeting that the mining giant's remuneration policy had been strengthened in light of the Juukan Gorge crisis, citing the ability to "clawback" payments if there was a material impact on the company's ability to mine.
Shareholders also rebelled on other issues outside of the executive bonuses.
More than a quarter of shareholders opposed the re-election of Megan Clarke, the chair of the company's sustainability committee.
However, Tinto itself decided to keep her on owing to her years of experience and "stabilising effect."
The company has also defended its remuneration policy, stating it was not in any legal position to terminate the three executives without monetary recompense.
The company has also come under fire from the site's traditional owners namely in its lack of transparency regarding supposed "heritage reforms."
Read more: Rio Tinto face pressure from traditional owners over heritage reforms
The company pledges to form an "Indigenous advisory group" to help it better understand the issues the aboriginal population face and to help work out when mining operations may encroach on traditional territory.
As of the last report, nine aboriginal groups have met with Tinto to prevent similar disasters from occurring.
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