Amid strong uncertainties in global market demands, according to company officials, the incoming CEO of mining giant BHP Billiton will take a pay cut while promoting operational team leaders within a management overhaul.
“The composition and structure of the team reflects my commitment to a relentless focus on the safe execution of BHP Billiton’s strategy,” CEO Andrew Mackenzie said in a statement. The announcement comes just as officials at BHP, the world’s No. 3 iron ore miner, announced production was nearing 200 million annual metric tons (mt), while maintaining 2013 output guidance of 183 million mt.
Mackenzie previously said the world’s top miner would witness no major management changes instead targeting costs, while enhancing operations following slackening growth in China in a time of volatile prices for mineral commodities.
BHP officials said a management reshuffling will have petroleum leader Michael Yeager replaced by Tim Cutt, who will head petroleum and potash—one crucial area slated for growth. Aluminum and nickel leader Alberto Calderon, meanwhile, will leave management while remaining as an adviser to Mackenzie until 2014. Ferrous and coal head Marcus Randolph, a third internal CEO candidate, will leave the management committee in May; his role has been eliminated, as iron ore leader Jimmy Wilson, and new coal head Dean Dalla Valle, will report directly to the new CEO.
Mackenzie’s base annual salary is now $1.7 million with a maximum short-term incentive opportunity of 240% of base; 2013 long-term incentive awards are at 400% of the base value. In all, Mackenzie’s base salary is $150,000 less than that of predecessor Marius Kloppers, with a maximum short-term incentive down from 320%. The company has also cut his pension contribution to 25% from 40% of his salary.