Johannesburg - South32 chief executive Graham Kerr lost around a third of his remuneration owing to four fatalities at the company’s South African operations.
In South32’s first annual report released yesterday, Kerr had received A$4.1 million (R44.03m) , including a A$1.77m fixed salary and A$1.96m short-term incentive (STI) award.
Kerr forfeited 37 percent of A$3.2m he was entitled to in STIs.
South32 was spun off BHP Billiton and listed on the JSE last year and is focused on producing zinc, nickel, aluminium, coal and manganese across its operations in southern Africa, and South America with its marketing arm based in Australia.
Unacceptable
In the report South32 said it recognised the tragic loss of four employees in the 2016 financial year, as being an unacceptable outcome.
“While there were a number of operational highlights during the financial year, these were overshadowed by four fatalities at our operations. It is one of the core values of our business to ensure that all our people go home safe and well after every shift, so this is an unacceptable outcome, said the annual report.
“We are committed to a step change in our safety and risk management performance across the business to ensure the safety of our people. As such, the board has considered this in applying its discretion and applied the scorecard modifier to reduce the overall STI outcome for the executives,” it said.
The STI recognises the underlying performance of the business during the financial year and included demanding measures that were within the control of management in order to motivate the right behaviour of executives.
Commenting on the fatalities, Kerr said they had an immense impact on South32. “We know our safety performance needs to improve and we are committed to eliminating significant incidents in our business,” he said.
The company declared a maiden dividend of US 1 cent a share. It posted a loss of US$1.61 billion (R22.53bn), which was significantly impacted by non-cash, post-tax, and impairment related charges. South32 generated revenue of $5.8bn and underlying earnings before interest, tax and depreciation of $1.1bn. It generated controllable cost savings of $386m surpassing its target of $300m, and reduced capital expenditure by $306 m.
South32 shares rose 0.61 percent to R23.20 on the JSE yesterday.
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