[miningmx.com] – JEAN Nel, CEO of Aquarius Platinum, is to take up to 70% of his salary and relevant bonuses over the next three years in shares starting from July in an effort to conserve the company’s cash resources.
In addition, the company’s non-executive directors will take a 10% haircut on their fees and receive 25% of the balance of their fees in shares. The proposals are due for shareholder approval at the company’s annual general meeting in November.
Speaking at the company’s year-end results announcement in August, Nel said he had targeted a 30% to 40% reduction in corporate costs in the current financial year.
“In essence we are going to focus on operational improvements and cash preservation. This will intensify, if anything, in the current financial year,” he said at the group’s full-year presentation.
Heartening for Nel is the fact that the company grew its cash in the second half of the last financial year by about $20m reporting a cash balance of $103m at year-end. This is $77m lower than in the previous financial year.
Nel’s shares in lieu of cash proposal, which Aquarius Platinum said its CEO had motivated, provides further evidence of directors attempting to align their interests with shareholders who have seen precious little return on mining investments, especially during the height of the mining boom from 2006 to 2012 in which returns were sacrificed in favour of ambitious production growth projects.
Continental Coal, a company listed in Australia but which operates in Mpumalanga province, and Mwana Africa which operates in Zimbabwe and South Africa, recently announced plans to cut salaries and fees of executives and directors.
Earlier this year, BHP Billiton CEO, Andrew Mackenzie, elected to relinquish 50,000 shares due to him after the group showed a 9% retraction in total shareholder returns, even though this outperformed the mining market’s negative 44% return.
This means Mackenzie is awarded £4.6m out of £8.6m that would have been due to him. BHP Billiton had already said, at Mackenzie’s appointment, he would be paid $500,000 less a year that his predecessor, Marius Kloppers, less even than the $1.9m being paid to Rio Tinto’s Sam Walsh and $1.8m for Mark Cutifani, CEO of Anglo American.
In terms of Aquarius Platinum, Nel would received a fixed amount of shares totalling 708,000 shares a year set at 62 US cents per share, equal to $438,960 or R4.32m.
This represents the volume weighted average price of Aquarius Platinum shares in London in June. Any shares issued as part of a bonus will be issued on the same terms, the company said.
Nel has, for the second consecutive year, also asked not to be considered for a salary increase in 2014, said Aquarius Platinum in a statement to the JSE.
The number of shares payable to non-executive directors would be calculated by dividing 25% of the residual fee by the average of the share price over the preceding calendar year with the first payment due on March 31, 2014.
