Freeport Indonesia to process 400,000t of copper concentrate at new smelter
Earlier this month, Freeport obtained an export permit for the rest of the year from the government.
Bonuses paid to chief executive officers at Canadian mining companies have seen better days. CEOs are getting — on average — 31% less this year, shows the latest salary survey by Coopers Consulting Ltd. and Pricewaterhouse Coopers LLP.
That’s the sad truth. Canadian mining CEOs’ bonuses paid this year dropped significantly from the $540,000 reported in 2011 to $370,000.
At least the average annual base salary for them remains almost unchanged: $486,000 in 2011 versus $490,000 this year. But the survey also revealed the average total cash compensation package, which include annual base salary plus cash bonus, is down 7% from the $826,000 reported last year to $767,000 today.
“Board Compensation Committees, driven by regulatory changes and stakeholder demands for greater accountability and transparency, have been implementing refined performance criteria for CEOs over the last several years,” says Lou Vujanich, survey leader and principal of Coopers Consulting. “There is also greater emphasis on the variable equity based component of the overall CEO compensation. These factors are contributing to lower total mining CEO compensation.”
“CEO bonuses are performance driven,” said Michael Cinnamond, survey contributor and senior partner in PwC’s mining practice. “Softer commodities demand and prices, investor risk aversion, the European sovereign debt crisis and slowdown in China’s economy resulted in lower profitability and market capitalization of many mining companies. This is affecting CEO performance metrics and compensation.”
Incentive plans more common than ever
The study shows that across the full range of salaried staff positions found at a mine site, over 80% of positions continue to be eligible for some form of incentive plan, such as an annual cash bonus, gain share plan or productivity improvement plans in 2012. This is a significant change compared to ten years ago when eligibility hovered at only 59%.
“Market conditions and commodity prices notwithstanding, the increase in the prevalence of compensation incentives for salaried positions lower down in the hierarchy is a reflection of the continued fierce competition to attract and retain qualified mining professionals across the spectrum of positions” says Vujanich. “The result being upward pressure on compensation costs for mining companies.”
The study also found graduate mining engineers can reasonably expect a starting salary in the range of $70,000, a figure consistent with new graduate hire rates in 2011. After one to two years of experience, the figure jumps to about $76,000, with fully qualified mining engineers potentially earning an annual base pay in the vicinity of $90,000. By region, Western Canadian mining operations generally pay more than their Eastern Canada counterparts. Compensation data also shows companies that mine coal, industrial and other minerals generally pay more across the board, while base metal mining operations generally pay less.
The survey covered 65 typical salaried corporate office positions, 58 mine site positions and 14 field exploration positions and contains data for 175 North American-based mining companies or business units.
