Rio Tinto warned by shareholder advisers that boardroom penalties for fatalities at its mines are too lenient
Rio Tinto has been warned by shareholder advisers that boardroom penalties for fatalities at its mines are too lenient.
The copper and diamond mining giant is still reeling from criticism over its destruction of ancient Aboriginal caves, which cost ex-boss Jean-Sebastien Jacques his job.
Warning: The copper and diamond mining giant is still reeling from criticism over its destruction of ancient Aboriginal caves
His successor, Jakob Stausholm, receives a salary of £1.15million, with the potential to earn between £1.15million and £2.3million extra including bonuses. However, if an employee dies at work, this would be trimmed by £92,000 to £184,000 – just 8 per cent of his bonus.
But, ahead of Rio’s AGM this week, shareholder advisory group Glass Lewis has said this is too low.
In advice to investors, it said: ‘We believe that the board should take a stricter approach where fatalities occur… We remain concerned that this element only accounts for 8 per cent of the bonus awards.’
Glass Lewis did not advise shareholders to vote against the pay packet, as Rio – which has 47,000 workers – had not suffered a fatality for two years. But it will be regarded as a warning shot from the group which distributes its advice to top funds.
Linking pay to safety metrics is commonplace in riskier industries such as mining.
Jacques left last year after months of battling the repercussions from the destruction of the 46,000-year-old sacred site at Juukan Gorge in May.
Separately, advisory groups told shareholders to rebel against a £7.2million payout to Jacques and the re-election of Megan Clark, chair of Rio’s sustainability committee.
Rio Tinto declined to comment.