Rio Tinto PLC Stock – Rio Tinto PLC goes ahead with 20% pay rise to chief executive who left after Australian heritage site blast
Over 60% of shareholders voted against two resolutions on the firm’s remuneration report
() is going ahead with plans that will allow a 20% pay rise to former chief executive Jean-Sebastien Jacques, despite most shareholders voting against it.
Jacques left the FTSE 100 mining giant after it blasted the 46,000-year-old Juukan Gorge heritage areas in Australia to access iron ore.
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On Thursday’s AGM, over 60% of shareholders voted against two resolutions on the firm’s remuneration report, but as it only an advisory measure the company decided to ignore the vote and carry on.
Jacques will pocket the pay hike because it’s linked to long-term incentive schemes agreed when he was appointed in 2016.
His salary was £7.2mln last year despite the lack of performance bonuses.
“The Board acknowledges that the executive pay outcomes in relation to the tragic events at Juukan Gorge are sensitive and contentious issues,” Rio Tinto said, adding it “has engaged extensively with shareholders and proxy advisors to explain the rationale for the decisions reached on executive pay and to listen to feedback”.
Lee Wild, head of equity strategy at interactive investor, said this investor backlash was “a real eye-opener”.
“Company AGMs can often be a box-ticking exercise or at least an event where all resolutions are waved through with very few, if any, dissenting… Such a significant display of disapproval is evidence that shareholders can make themselves heard and shock companies into action,” he noted.
“There is little doubt that Rio now understands the full strength of feeling against both the behaviour of its executives and, in this case, both an excessive and insensitive pay policy.”
Shares were flat at 6,427p on Thursday afternoon.