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Sunday, August 05, 2012 12:47:53 AM
BHP bosses forgo $7 million
Stephen McMahon
Herald Sun
August 04, 2012 12:00AM
BHP boss Marius Kloppers gave up his right to a potential $5 million in bonuses this year. Source: AP
BHP bosses have turned their back on a potential $7 million windfall in an extraordinary concession to Australians who have seen billions wiped from their retirement savings.
The decision will put the spotlight on fat cat bosses across the country as the company reporting season starts this month.
Hundreds of companies have seen their value plummet in the past year, raising questions about bonus payments to bosses.
BHP boss Marius Kloppers gave up his claim to the lucrative bonus scheme that earned him $4.7 million last year.
He admitted he was disappointed with his company's performance.
Should other company bosses follow Marius Kloppers' lead? Have your say below.
But Mr Kloppers won't go home empty-handed - his base pay tops $2.1 million.
"The buck stops with the CEO. End of story, that's how it is. It's part of the job," he said.
BHP's petroleum division boss Mike Yeager has also renounced a potential bonus of more than $2 million after the two oversaw a series of shoddy acquisition decisions that forced the miner to slice more than $3 billion from the value of the company.
Editorial: Beware boss bearing gifts
http://www.heraldsun.com.au/opinion/beware-boss-bearing-gifts/story-e6frfhqo-1226442542225
Terry McCrann: BHP shows buck stops at the top
http://www.heraldsun.com.au/business/terry-mccranns-column/bhp-shows-the-buck-stops-at-the-top/story-e6frfig6-1226442591722
Shareholders applauded the decision as a step in the right direction, but called for greater accountability from executives and boards after a financial year that has seen $151 billion wiped off the value of Australian companies, leaving investors as the major losers.
Super fund managers have long complained about the level of bonuses paid to Australia's top executives, saying they have it both ways. They are "rewarded when lucky and compensated when unlucky".
Little more than a year after splashing out almost $5 billion on US shale gas company Chesapeake Energy, Mr Kloppers was forced into the embarrassing admission the business is now worth less than half he paid for it.
Speaking to The Australian, Mr Kloppers stood by his record and offered no apology for the company's expansion into shale gas, which he says will deliver strong returns in the long run.
"You always have to be careful to write down your lessons," he said.
"We all learn every day and if we stopped learning, it would be a sad day."
Last year, the BHP boss was the country's second most highly paid executive with a salary package valued at $10.9 million, including a cash and shares bonus package worth $4.7 million.
Westfield founder Frank Lowy took home a package valued at $15.9 million.
BHP chairman Jac Nasser said the board agreed with the decision by Mr Kloppers and Mr Yeager to withdraw their names from consideration for bonuses this year.
But he said the decision to pump $20 billion into US shale gas was correct.
Australian Shareholders Association chief Vas Kolesnikoff said it was a warning for bosses at serial under-performers such as Bluescope Steel, Pacific Brands, Seven West and Leighton that they can't take home huge pay packets as they kill shareholder value.
Shareholders are more than $450 billion out of pocket since the start of the global meltdown in 2007.
http://www.news.com.au/national/bhp-bosses-forgo-7-million/story-fndo4eg9-1226442123878
It's a small gesture toward executive accountability, anyway.
Stephen McMahon
Herald Sun
August 04, 2012 12:00AM
BHP boss Marius Kloppers gave up his right to a potential $5 million in bonuses this year. Source: AP
BHP bosses have turned their back on a potential $7 million windfall in an extraordinary concession to Australians who have seen billions wiped from their retirement savings.
The decision will put the spotlight on fat cat bosses across the country as the company reporting season starts this month.
Hundreds of companies have seen their value plummet in the past year, raising questions about bonus payments to bosses.
BHP boss Marius Kloppers gave up his claim to the lucrative bonus scheme that earned him $4.7 million last year.
He admitted he was disappointed with his company's performance.
Should other company bosses follow Marius Kloppers' lead? Have your say below.
But Mr Kloppers won't go home empty-handed - his base pay tops $2.1 million.
"The buck stops with the CEO. End of story, that's how it is. It's part of the job," he said.
BHP's petroleum division boss Mike Yeager has also renounced a potential bonus of more than $2 million after the two oversaw a series of shoddy acquisition decisions that forced the miner to slice more than $3 billion from the value of the company.
Editorial: Beware boss bearing gifts
http://www.heraldsun.com.au/opinion/beware-boss-bearing-gifts/story-e6frfhqo-1226442542225
Terry McCrann: BHP shows buck stops at the top
http://www.heraldsun.com.au/business/terry-mccranns-column/bhp-shows-the-buck-stops-at-the-top/story-e6frfig6-1226442591722
Shareholders applauded the decision as a step in the right direction, but called for greater accountability from executives and boards after a financial year that has seen $151 billion wiped off the value of Australian companies, leaving investors as the major losers.
Super fund managers have long complained about the level of bonuses paid to Australia's top executives, saying they have it both ways. They are "rewarded when lucky and compensated when unlucky".
Little more than a year after splashing out almost $5 billion on US shale gas company Chesapeake Energy, Mr Kloppers was forced into the embarrassing admission the business is now worth less than half he paid for it.
Speaking to The Australian, Mr Kloppers stood by his record and offered no apology for the company's expansion into shale gas, which he says will deliver strong returns in the long run.
"You always have to be careful to write down your lessons," he said.
"We all learn every day and if we stopped learning, it would be a sad day."
Last year, the BHP boss was the country's second most highly paid executive with a salary package valued at $10.9 million, including a cash and shares bonus package worth $4.7 million.
Westfield founder Frank Lowy took home a package valued at $15.9 million.
BHP chairman Jac Nasser said the board agreed with the decision by Mr Kloppers and Mr Yeager to withdraw their names from consideration for bonuses this year.
But he said the decision to pump $20 billion into US shale gas was correct.
Australian Shareholders Association chief Vas Kolesnikoff said it was a warning for bosses at serial under-performers such as Bluescope Steel, Pacific Brands, Seven West and Leighton that they can't take home huge pay packets as they kill shareholder value.
Shareholders are more than $450 billion out of pocket since the start of the global meltdown in 2007.
http://www.news.com.au/national/bhp-bosses-forgo-7-million/story-fndo4eg9-1226442123878
It's a small gesture toward executive accountability, anyway.
It was Plato who said, “He, O men, is the wisest, who like Socrates, knows that his wisdom is in truth worth nothing”
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