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BHP troubles slash CEO Mackenzie's pay

AAP logoAAP 21/09/2016 Prashant Mehra

BHP Billiton chief executive Andrew Mackenzie has had his pay halved after leading the resources giant to a record full-year loss on the back of the Samarco dam disaster in Brazil and plummeting commodities prices.

Mr Mackenzie earned S2.24 million ($A2.96 million) for the 2015/16 financial year, down from $US4.58 million in the previous year. While his base salary was held steady at $US1.7 million, he did not receive any short or long-term incentive payments.

"The dam failure at Samarco in November 2015 was a key consideration, along with the ongoing decline in commodity markets and its associated impact on our performance," BHP's remuneration committee chairman Carolyn Hewson said in the company's annual report, released on Wednesday.

The dam collapse at the Samarco mine caused a massive spill of waste material, killing at least 19 people and leading to widespread environmental damage.

BHP and joint venture partner Vale reached a $US2.3 billion agreement to cover rehabilitation costs in March with Brazil's government authorities, but continue to face civil lawsuits potentially worth several times that amount. BHP also had to write down the value of its investment in the Samarco business.

BHP's board also determined Mr Mackenzie's long-term incentives at zero because of weaker shareholder returns compared to peer companies. BHP's ASX-listed shares slumped to a more than 10 year low of $14.06 in January, but have since made a partial recovery.

Mr Mackenzie's pay has slid sharply from the $US7.99m he received in FY2014 - his first full year as CEO - and is a fraction of the $US16.1 million earned by his predecessor Marius Kloppers in FY2012.

Salaries and packages for the chief executive, group management committee members and fees for non-executive directors will not change in the current financial year, BHP said.

The global miner also disclosed it slashed more than 15,000 jobs, or close to a fifth of its workforce, during the financial year. BHP said it had a total of 65,263 employees and contractors at June 30, down from 80,368 a year earlier.

While employee numbers were down about 10 per cent, most of the job cuts were focused on the contracted workforce, as part of the company's ongoing cost cutting and productivity program.

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