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Rio Tinto shareholders rebel against ex-chief executive’s £7.2m bonus

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Rio Tinto’s shareholders have rebelled against the board’s decision to pay its outgoing chief executive his biggest ever pay packet despite overseeing the destruction of the sacred 46,000-year-old rock shelters at Juukan Gorge in Western Australia.

Shareholders dealt the Anglo-Australian company a bloody nose after 61% voted against the miner’s remuneration policy, which handed a £7.2m pay packet to the disgraced former chief executive Jean-Sébastien Jacques for last year, a 20% rise on his total pay the year before, despite the Juukan Gorge scandal.

Jean-Sébastien Jacques.
Jean-Sébastien Jacques. Photograph: Hannah McKay/Reuters

Jacques agreed to step down from the mining company “by mutual agreement” with Rio Tinto’s board last year after the miner blew up ancient rock shelters, which were highly significant to the area’s traditional owners, Indigenous Australian, so that it could mine better quality iron ore.

The disgraced mining boss, who stepped down on 1 January, was stripped of bonuses worth a total of £2.7m following the disaster but will still take home the biggest pay packet for his time as chief executive. He was also handed an extra £519,000 for his remaining five months of unworked notice period this year, and £215,000 for his unused leave.

At the same time, the ousted senior executives Simone Niven, the head of corporate relations, and Chris Salisbury, the head of iron ore, who also stepped down in the wake of the scandal, were given “termination benefits” worth $1m (£719,000) and $1.3m respectively.

The most significant shareholder pay revolt in the UK this year was a non-binding advisory vote, meaning no change to the windfall sums taken home by Rio Tinto’s senior executives.

Rio Tinto’s chairman, Simon Thompson, who won’t be seeking re-election next year, said: “I absolutely understand the sense of outrage that people feel at the remuneration settlements that have been made for the departing executives.”

Thompson told investors at the company’s annual shareholder meeting in Perth on Thursday that he was “ultimately accountable” for the Juukan Gorge disaster and would use his remaining time with the company to “ensure that the destruction of a site of such exceptional cultural significance never happens again at a Rio Tinto operation”.

In a statement, Rio Tinto’s board, which has struggled to smooth its relations with investors in the year since the disaster, acknowledged that its executive pay was “sensitive and contentious” in the wake of the tragic events at Juukan Gorge.

The head of Rio Tinto’s remuneration committee, Sam Laidlaw, who is the former boss of British Gas parent company Centrica, said the “loss of cultural heritage was tragic, and many have understandably sought to allocate appropriate accountability and responsibility”.

He said the board understood the sensitivity and deeply regretted the destruction of the rock shelters and the “slow and initially insufficiently sensitive response”, but had concluded that it was not in a position to legally terminate the three executives and force the forfeit of their outstanding remuneration.

Rio Tinto said the remuneration committee “will take time to reflect further on the feedback already received and on any new input obtained from this subsequent engagement, in particular as it considers the implementation of the new remuneration policy”.

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