Kumba Iron Ore: Senior pay rises despite 22% share fall

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Kumba Iron Ore raised remuneration for senior managers and board members last year even as the share price fell 22 percent. Kumba paid 23 managers, directors and executives R67.9 million in salary, bonuses and benefits, a 0.9 percent gain on the prior year, it said in its annual report on Friday. Bonuses included the face value of share awards, valued at R19.3m. The stock dropped last year as slowing economic growth in China curbed demand for iron ore, dragging down prices for the steel making material. Kumba’s Sishen mine, Africa’s largest iron ore operation, produced lower volumes following a strike at the end of 2012. Executive pay has become a concern for investors in South Africa. The state-run Public Investment Corporation (PIC), which oversees about R1.9 trillion of pension fund assets for civil servants, rejected pay plans in 2013 at mining companies including Anglo American Platinum, Gold Fields and AngloGold Ashanti. The PIC voted in favour of Kumba’s remuneration policy. A rebound in iron ore prices toward the end of last year, as well as a decline in the rand, buoyed earnings at Kumba, which reported a 24 percent increase in full-year profit in February. “During 2013 employees shared in the good performance of Kumba,” the Anglo American unit said in its annual report. Kumba shares rose 2.23 percent to close at R378.80 on Friday. – Bloomberg

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