Johannesburg - Investor interest group ShareSoc says Anglo American’s proposed remuneration for chief executive Mark Cutifani is too high and urged shareholders to reject it at next week’s annual general meeting (AGM).
However, chief executive remuneration had not been reduced to reflect the smaller, simpler company that Anglo now was, the group said.
Read: Cutifani has sombre message for mining firms
The miner, which posted steep losses last year due to the slump in commodity prices, had sought to offset poor trading conditions with a restructuring plan that led to a 50 percent cut in head office costs and the closure of 20 mines since 2013, ShareSoc said.
Anglo American, once South Africa’s biggest company, also plans to exit its controlling stake in South African-based Kumba Iron Ore, with unions fearing job losses on the cards.
ShareSoc said Cutifani was still set to receive £6.3 million (R129.2m) for target performance and £8.8m for “above” target performance.
“We consider the pay of the chief executive to be too high, and particularly so in a year when the company suffered a loss of $5.6 billion (R81.28bn) last year and dividends were suspended,” the group said yesterday.
Anglo American became the first major London-based miner to be rated junk in February as rating agencies Fitch and Moody’s Investors Service lowered the mining firm’s credit assessment.
News of its opposition to Anglo American’s pay proposals came as 59.1 percent of investors in BP voted down the oil company’s plan to pay its chief executive Bob Dudley a $19.6m remuneration package.
Remuneration
Shares in Anglo have fallen 34 percent in the past 12 months, shrinking its market capitalisation to £10bn from about £50bn in 2008.
“We believe we have a remuneration policy that was approved at the 2014 AGM that strikes the right balance between stretch and achievability, designed to support the company’s strategic objectives and aligned with shareholders’ interests,” a spokesman for the mining company said.
“As an illustration, our chief executive’s total remuneration decreased by 17 percent in 2015, his salary has been frozen and his bonus decreased by around 40 percent,” the spokesman added.
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