BHP lifts the lid on Mackenzie’s pay

For the first time, BHP has revealed how Andrew Mackenzie’s salary, and others, compare to the average worker.

Andrew Mackenzie in BHP’s Melbourne offices. Picture: Aaron Francis/The Australian

BHP chief Andrew Mackenzie was paid $6.3 million in the 2015 year, which worked out at 55 times the miner’s median salary that year of $114,000.

Put another way, Mackenzie picked up 81 times the average pay for Australian works of around $80,000 a year.

The relative pay figures are included in the BHP annual report for the first time, following a change in the rules in the US which requires companies to report how much the chief executive gets compared to the average worker.

The company used 2015 year numbers, and of course Mackenzie saw his pay fall last year to just over $3 million after his short-term bonus was cut to zero.

The comparison also uses median salaries rather than average so the pay afforded to the senior executives is included, which pushed the median up to $114,000.

MacKenzie received no long-term incentives for either of the last two years because the company’s total shareholder returns finished below its peer group average.

The short-term bonus was cut in part on profit performance but also as a result of the Samarco tragedy in which 19 lives was lost.

UK Prime Minister Theresa May is pushing to have the same rule imposed in Britain as part of tighter rules on executive pay, including a binding vote on pay policies.

Australian chief executives on average take home around 68 times the average pay, compared to 140 times in the UK and 204 times in the US.

BHP included the figures for each regional manager and Latin American boss Danny Malchuk topped the list with his 2015 pay at $5 million, which worked out at 133 times the median pay for his workers.

The company has decided to cap the base for long-term rewards at last year’s level, which negates the impact of a bounce back in the share price.

It also kept board payments at last year’s slightly reduced levels.