RIO Tinto said it had acted appropriately in cutting bonuses of its key executives rather than firing them following a review into the destruction of two ancient caves in Australia.
Rio said it would reduce the short-term bonuses of Rio Tinto CEO, Jean-Sébastien Jacques, the CEO of the firm’s iron ore division, Chris Salisbury, and group executive of its corporate relations, Simone Niven in 2020 by about $3.7m in total. Jacques’ long-term incentive plan award would also be reduced by about £1m ($1.3m). He earned £5.8m last year, said Reuters.
In May, Rio legally destroyed two historically significant sacred caves in Western Australia state – against the wishes of Aboriginal traditional owners – as part of a mine expansion. The Aboriginal traditional owners, the Puutu Kunti Kurrama and Pinikura have been too distressed to comment on the matter, said Reuters.
Investor groups, however, said the sanctions imposed by Rio Tinto were lightweight. “Rio’s board could have acted decisively. This soft touch, public relations-oriented review calls into question the suitability of every board member, especially the chair, Simon Thompson, and the head of the review Michael L’Estrange,” said shareholder advocacy group, the Australasian Corporate Centre for Responsibility.
Said L’Estrange: “The board has thought very, very deeply on this … Now we will consult with investors and others,” he said.
Australian wealth manager AMP Ltd saw a leadership shakeup on Monday after investors were unhappy with board decisions around accountability over allegations of inappropriate conduct. “The review found no single root cause or error that directly resulted in the destruction of the rock shelters. It was the result of a series of decisions, actions and omissions over an extended period of time,” Rio said in its defence.
Rio is reviewing the organisational structure of its communities function that will report to Mark Davies, who joined the executive committee in charge of safety and technical projects in July, after it previously reported to corporate affairs.