Yahoo Finance Rio Tinto under fire from shareholders over pay and climate change
FTSE 100 miner Rio Tinto has been forced to defend itself over its remuneration, corporate governance and climate change policies at a testy annual general meeting in London.
Proxy adviser Glass Lewis advised shareholders to vote against Rio’s pay report for 2017, in protest at the miner awarding bonuses to senior bosses in a year when it suffered two fatalities.
Rio boss Jean Sebastien Jacques told shareholders “safety and health is the number one” priority for the company, while newly appointed chairman Simon Thompson defended the miner’s new pay policy, which goes to a binding vote this year, saying disagreement among shareholders prevented it from implementing a more “innovative” pay scheme.
Rio also faced down charges it was favouring one set of shareholders over another, after refusing to allow British investors a vote on a resolution demanding that it reveals payments to lobbying groups that back fossil fuels.
Shareholders in Rio’s Australian company will get a vote on two extra resolutions at its AGM in Melbourne on May 2.
Adam Matthews of the Church of England Pensions Board, which has £2bn funds under management, said it would vote against Rio’s report and accounts in frustration at its continued funding of bodies such as the Minerals Council of Australia, which is avowedly pro-coal.
“These associations are taking positions at odds with Rio’s interests and its policy on climate change, and with our interests as investors,” Mr Matthews told The Telegraph. “It is still funding these trade associations and using company funds to do so.”
Rio’s rival BHP Billiton, also dual-listed in London and Sydney, had allowed shareholders in both countries to vote on resolutions regarding membership of the MCA.
Mr Thompson insisted it was necessary for the company to engage “with organisations with whom we may disagree”. “There is broad-based recognition that Rio Tinto takes climate change very seriously,” he said.
Last month Rio sold the last of its coal mines, becoming the first of the big mining groups to back out of the commodity altogether. The move comes as more and more institutional shareholders signal their unease about supporting the coal industry.
Brynn O’Brien, of the Australasian Centre for Corporate Responsibility, said Rio had failed to honour “the spirit of its dual listing” and address British shareholders’ “well-founded concerns”.
Meanwhile Glass Lewis also opposed the reappointment of senior independent director Ann Godbehere on the basis that she was on the audit committee in 2011 when the board approved the $3.8bn purchase of a coal asset in Mozambique that later proved to be a dud.
The transaction is now the focus of a major investigation by the US Securities and Exchange Commission, one of a number of regulatory probes into Rio that have taken the shine off its otherwise impressive recent financial performance.
The results of Rio’s AGMs will be published after the Melbourne meeting.
