Rio Tinto defers former CEO Walsh bonus over Guinea scandal
Rio Tinto's (ASX, LON:RIO) former chief executive Sam Walsh has had part of his retirement payout withheld while the group waits for the results of ongoing investigations into payments made to a consultant to gain access to the Simandou iron ore project in Guinea, Africa.
The decision, announced as part of the world's second biggest miner’s 2016 annual report released Thursday, was reached in agreement with Walsh, the company said.
“The board has determined that it would be inappropriate, while investigations are ongoing, to make any determination about Sam Walsh, our former chief executive, or about his outstanding remuneration,” Rio said in its annual report.
Rio said it had reached an agreement with former CEO Sam Walsh, who retired in July, to delay for at least two years cash and share payments due to him.
As a result, Rio has delayed for at least two years cash and share payments due to Walsh, who retired in July, under short and long term performance-based incentive plans.
“The payment of any of these awards is contingent on there being no information in connection with the Simandou matter which would justify [Rio’s] remuneration committee making a determination to cancel, defer or reduce these awards,” it added.
At the heart of Rio’s decision lays a questionable $10.5 million-payment to a consultant in Guinea, which came to light in November and triggered the dismissal of two of the company’s senior executives, as well as several parallel probes.
The payment has been referred to authorities in the US, UK and Australia for investigation amid bribery concerns.
The emails, Rio Tinto disclosed in November, showed that both Walsh and his predecessor, Tom Albanese, were aware of the payments made in 2011.
The annual report also shows that the company’s current chief executive, Jean-Sebastien Jacques, will not receive the expatriate benefits provided to his predecessor.
Jacques’s base salary last year was around 1 million pounds plus a performance-related bonus of 1.5 million pounds, half of which was paid when he took the helm in July, while the other half was deferred for three years.
Walsh's base salary was nearly $1.5 million (A$2 million) when he retired.
The company, which faces potential regulatory fines if it is found to have broken anti-corruption laws, said in a separate statement Friday it had appointed Philip Richards as group chief of legal to replace Debra Valentine, one of the executives sacked last year over the Guinea scandal.