Investors oppose Rio Tinto pay report over rock shelter outrage

© Reuters.

By Clara Denina and Zandi Shabalala

LONDON (Reuters) – Shareholders, including Norges Bank and the Local Authority Pension Fund Forum (LAPFF), said they voted against Rio Tinto (LON:)’s remuneration report at its London annual meeting (AGM) on Friday.

Rio Tinto in September dismissed former chief executive Jean-Sebastien Jacques and two deputies in September, four months after the company destroyed ancient rock shelters at Juukan Gorge in Australia as part of an iron ore exploration project, causing a public outcry.

“The outgoing CEO ended up with a pay package in 2020 at least 20% in excess of what he had received the previous year in which no major incidents akin to Juukan Gorge had occurred,” British local government pension group LAPFF said.

Jacques’s total remuneration in 2020 was 13.3 million pounds ($18.30 million) under Australian accounting rules, up from 7.1 million pounds a year earlier, despite the loss of about 2.7 million pounds in awards following a board review into the blast.

Jacques is also subject to a payout when future incentives vest. Employers are usually not entitled to claw back any part of a bonus unless previously agreed, although Rio executives said that situation would change.

“We have… importantly introduced a specific ability to apply malus and clawback if in the future there is a material impact on our social licence to operate,” Sam Laidlaw, Remuneration Committee chair, told the AGM.

Proxy advisors Institutional Shareholder Services (ISS), Glass Lewis and PIRC, which provide voting recommendations for shareholders, had recommended shareholders vote against the report.

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Chief Executive Jakob Stausholm at the AGM on Friday apologised for the destruction of the caves and called 2020 a “year of extremes”.

“Perhaps this cannot be said enough, so let me say it again: The rock shelters at Juukan Gorge should not have been touched. We are so sorry,” he said.

Chairman Simon Thompson, who accepted accountability for his role in the Juukan Gorge’s explosion, will step down next year.

Rio is dual-listed in London and Sydney and the votes will be counted and made public at the AGM in Perth on May 6.

($1 = 0.7267 pounds)

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