OREANDA-NEWS. April 24, 2013. The Board of BHP Billiton announced the terms of employment for incoming Chief Executive Officer (CEO), Andrew Mackenzie.

The contract will be effective from 10 May 2013 when Mr Mackenzie commences as CEO.

In announcing the details, BHP Billiton Chairman, Jac Nasser, said “The Board and Remuneration Committee believe that the existing CEO remuneration package, endorsed by shareholders, has contributed to the consistent and substantial financial out performance of the Company over many years. However, we also believe that some downward rebasing at this time is appropriate; a view that is supported by Andrew. The package announced today supports our evolving strategic priorities and does not compromise on our need to motivate a high level of performance and ensures alignment with our shareholders’ expectations. 72 per cent of the total package is “at-risk” which at BHP Billiton means it will only be earned where there is genuine outperformance.”

The key components are:

A base salary of USD1,700,000 per annum (an increase from Mr Mackenzie’s current base salary of USD 1,200,000 per annum);

A pension of 25 per cent of base salary (a decrease from 36 per cent for Mr Mackenzie);

A short term incentive target opportunity of 160 per cent of base salary, with a maximum opportunity of 240 per cent of base salary (maximum reduced from 320 per cent previously);

A long term incentive award for 2013 of 400 per cent face value of base salary (subject to shareholder approval);

Dividend equivalent payments on vested shares made in the form of shares (made in cash previously); and

Minimum shareholding requirement of five times base salary (previously three times base salary).

Mr Mackenzie’s actual remuneration is linked substantially to business outcomes and shareholder returns with the “at-risk” component (comprising short and long term incentives) set at 72 per cent of his total remuneration (at fair value). Fixed remuneration (base salary and pension) comprises 28 per cent of the total.