Executive exodus extended at Andrew Forrest’s Fortescue with another senior departure

After the latest exit, Fortescue Metals Group has now lost almost 75 per cent of its top leadership in the last 15 months.

Fortescue executive chairman Andrew Forrest. Picture: NCA NewsWire / Martin Ollman

Fortescue Metals Group has been hit with the departure of another senior executive, with its most senior human resources manager understood to have quit the company.

Sources say director of Fortescue people Linda O’Farrell quit Fortescue this week, joining the executive exodus that has seen an almost complete changeover of the iron ore major’s most senior executive team over the last year.

A spokesperson for Fortescue declined to comment in response to questions from The Australian about whether Ms O’Farrell had quit the company, saying “we respect the privacy of all our employees at all times”.

Only three of the 11 members of Fortescue’s executive leadership team listed in the company’s 2021 annual report now remain with the company: chief financial officer Ian Wells, long-term legal boss Peter Huston, and former Fortescue Future Industries chief executive Julie Shuttleworth, although Ms Shuttleworth is now in a new role.

Fortescue did not list the members of its current executive leadership team in its latest annual report.

But Ms O’Farrell joins an extended list of senior executive departures since early 2021, when cost blowouts and scheduling delays at Fortescue’s Iron Bridge magnetite project forced the resignation of chief operating officer Greg Lilleyman and projects director Don Hyma.

The Fortescue board’s shock decision restructure the company’s executive incentive system last year, stripping about $50m from the expected bonus pool for senior executives, led to another wave of departures, including government affairs chief Tim Langmead, health and safety director Rob Watson and operations director Fernando Pereira.

Chief executive Elizabeth Gaines announced her departure from Fortescue in December 2021, and left her executive role in August. The company is still to appoint a replacement, with Fortescue founder Andrew Forrest instead returning as an executive director.

And this year marketing director Danny Goeman also left Fortescue, along with Mr Hyma’s replacement as project’s director, Derek Brown and corporate affairs chief Alison Terry.

The company’s rapidly expanding green energy arm, Fortescue Future Industries, has also seen a wave of senior departures. FFI director of energy Rob Grant left the company shortly before Christmas, with its North America president and chief executive Paul Brown quitting in early September after only eight months in the role.

In October FFI head of projects development, Gordon Cowe – promoted to the role in May – handed in his notice, with FFI’s US head of green hydrogen and ammonia marketing also quitting to take up a role elsewhere in the industry.

Fortescue reported a total staff turnover of only 12 per cent last financial year, below the 13.4 per cent reported by BHP in the same period.

But such is the extraordinary turmoil in the ranks of Fortescue’s senior management ranks, the company is understood to have banned the practise of sending mass staff emails to announce the departure of executives.

It is understood that staff that have left after receiving payouts, or otherwise left with good standing, have been asked to avoid changing their employment status on social media sites until they have started work with a new employer.

But despite the extraordinary changeover in its executive ranks, Fortescue still booked record shipments and its second highest profit last financial year, beating export guidance to ship 189 million tonnes of iron in the year and recording a $US6.2bn net profit on the back of the strong iron ore price.

But, while the company shipped a record tonnage in the September quarter, it is now faced with being crunched on both sides of its balance sheet, amid an iron ore price that has tumbled to about $US80 a tonne this week and average cash production costs up 16 per cent compared to the same time last year, at $US17.69 a tonne.

Fortescue shares closed up 23c to $15.73 on Wednesday.