BHP boss Mike Henry lands monster payday

BHP boss Mike Henry has become one of corporate Australia’s top earners with his annual pay more than doubling to $19.7m.

BHP CEO Mike Henry’s annual pay has more than doubled to $19.7m for the 2021 financial year. Aaron Francis/The Australian

BHP chief executive Mike Henry’s annual pay has more than doubled to $US14.5m ($19.7m) for the 2021 financial year after a raft of long-term incentives vested, making him one of Australia’s best paid bosses.

Mr Henry earned the same base salary of $US1.7m and received $US4.7m under the miner’s cash and deferred plan and a whopping $US7.9m of long-term incentives.

That compared to $US1.9m under the cash and deferred plan and $US3.1m of long-term incentives last year.

Mr Henry’s total pay of $US14.5m dwarfed last year‘s $US6.07m figure which he had only been in the job for half of the financial year, after replacing Andrew Mackenzie.

The $US7.9m long-term bounty is based on the full award he received in 2016 when he was BHP’s president of operations for Minerals Australia.

The value delivered through share price appreciation between the date of grant and the vesting date was $US3.8m, BHP said.

Long-term awards in 2016 were double the current grant size, BHP noted, which had led to the pay inflation.

“Had the current approved remuneration policy been in place when Mike’s 2016 long-term incentive plan grant was made, the reported long-term value for FY2021 would have been $US3.97m instead of $US7.9m and the reported single total figure of remuneration for FY2021 would have been $US10.5m instead of $US14.5m.”

Mr Henry’s $US4.7m under the cash and deferred plan was a result of him hitting 115 per cent against the 100 per cent target set by the board.

“Having recorded strong safety, operational and financial performance in FY2021 (after fully eliminating the very positive impacts of commodity prices during the year, particularly for iron ore), when assessing performance against the targets set at the commencement of the year the board and committee determined the CDP outcome for the CEO for FY2021 at 115 per cent against the target of 100 per cent (which represents an outcome of 77 per cent against maximum),” BHP said.

“The board and committee believe this outcome is appropriately aligned with the shareholder experience and the interests of the group’s other stakeholders.”

BHP also said the $40bn merger of its energy arm with Woodside Petroleum and decision to proceed with the Canadian potash project will reshape the company’s commodity mix by the end of the decade.

“These decisions and intended steps are anticipated to result in around half of BHP’s revenues being derived from the future facing commodities of copper, potash and nickel by the end of this decade. We also expect the other half, comprising iron ore and higher quality coking coal, to see upside as the world decarbonises,” Mr Henry said in its annual report on Tuesday.

The Woodside deal will also hand shareholders greater control over their exposure to commodities, the BHP chief added.

“We expect shareholders to benefit from significant synergies arising from the intended merger, and they will have greater choice in how to shape the relative commodity exposures in their own portfolios.”

Scrapping its dual company structure, announced at its August results, will also allow BHP to move more quickly on opportunities.

“The intended unification of BHP’s corporate structure will position us even more strongly to be able to continue growing shareholder value. We will be a simpler, more efficient and more agile company. This is expected to enable us to be more competitive and to more quickly create and capitalise on opportunities to continue to grow value,” Mr Henry said.

Meanwhile, BHP director Malcolm Broomhead has been asked to serve for another year on the mining giant‘s board as it juggles a number of corporate deals including the $40bn merger of its oil and gas arm with Woodside Petroleum.

Mr Broomhead, also the chairman of Orica, has been asked to seek re-election at this year‘s annual general meeting although the veteran businessman has said he will not remain after the 2022 AGM.

BHP board member Susan Kilsby will relinquish her job as the mining giant‘s senior independent director after a short stint in the role while Anita Frew will also step down to become chairman of Rolls Royce Holdings.

“In light of these retirements and the importance of continuity on the board during the ongoing renewal process, the board has requested that Malcolm Broomhead seek re-election at the 2021 annual general meetings for a further year,” BHP said in a statement.

“The board supports Malcolm’s re-election given his extensive knowledge of BHP and the mining and resources sector, and the proposed corporate transactions that the Group is undertaking at this time. Malcolm has informed the Board that he will not remain on the board after the 2022 annual general meetings.”

Michelle Hinchliffe will join the board in March 2022. BHP director Gary Goldberg has previously been named as its new senior independent director effective immediately with Christine O‘Reilly to chair its remuneration committee from March 1, 2021.

Originally published as BHP boss Mike Henry lands monster payday