Rio Tinto boss Jacques plays his cards right, earns $11m a year

Rio Tinto chief Jean-Sebastien Jacques pocketed a 27 per cent pay rise last year.

Rio Tinto chief executive Jean-Sebastien Jacques Picture: Bloomberg

Rio Tinto chief Jean-Sebastien Jacques pocketed a 27 per cent pay rise in 2019 after being rewarded for higher profits, improved safety and share price growth.

Mr Jacques’ total remuneration jumped to £5.8m ($11.4m) from £4.5m, although he still earned less than former BHP chief executive Andrew Mackenzie, with total pay of $US7.9m ($12.1m) in 2019.

The Rio boss earned fixed remuneration of £1.48m, steady on the previous year, but saw his ­bonuses grow based on improvements to its earnings margin and a strong profit performance for the 12-month period.

Mr Jacques earned 66 times the level of remuneration compared to the median pay of all Rio’s staff in 2019, compared to 48 times the year before, the company calculated. This change in ratio was driven by the amount of remuneration that was performance-related, with more bonuses vesting in 2019 than the previous year.

While Rio claimed the ratio “demonstrates the alignment to the shareholder experience as measured by total shareholder ­return”, it also remains mindful of the relationship between executive pay and its broader workforce.

Mr Jacques also earned plaudits from his board for improving staff engagement, achieving a positive net promoter score for the first time and boosting participation in its social network Yammer to more than 30,000 users.

Rio this week announced its latest carbon targets with a $US1bn climate fund and plans to target net zero emissions by 2050.

Chairman Simon Thompson noted there were limits to what business could achieve alone.

“Enabling regulation, such as carbon pricing, is essential to incentivise the decarbonisation of these sectors, together with measures to maintain the competitiveness of trade-exposed industries,” he said. Rio plans to reduce its ­carbon intensity at its managed and non-managed operations by 30 per cent by 2030, and is targeting a 15 per cent reduction in absolute terms by the same date.

Although Rio said the targets would apply to both its scope 1 and 2 emissions — those directly emitted as part of its operations, and those released by core parts of its supply chain such as power generation — it is yet to follow BHP’s lead and commit to setting targets for so-called scope 3 emissions, those released by the company’s customers.