Rio’s Walsh gets big backing from shareholders, to stay longer as CEO
Rio Tinto’s (ASX, LON, NYSE:RIO) Sam Walsh will continue as chief executive of the company beyond the end of 2015 after the mining group extended his tenure on Thursday in a move seen as an attempt to strengthen the firm’s image.
The news come just two weeks after Rio rejected a merger approach from Glencore (LON:GLEN) and puts an end to doubts over the miner’s leadership succession, as Walsh’s contract was due to expire at the end of next year.
The 64-year-old mining veteran, the long-standing head of Rio’s iron ore business, took over as CEO in January last year after his predecessor, Tom Albanese, was fired due to a series of bad investments that cost Rio Tinto $22 billion in writedowns in two years.
Walsh is credited with steadying the ship at Rio, making clear the world’s second largest miner would make no major strategic deals and would instead concentrate on cost-cutting and efficiency improvements.
"For quite some time, Sam has made no secret of the fact that he loves his job and would like to continue well beyond next year", chairman Jan du Pleiss said in today’s announcement.
"Given his performance and his enthusiasm to continue in the role, the decision to extend his tenure has been an easy one for the board."
Rio Tinto also said that Chris Lynch, chief financial officer, would have his fixed term retirement date replaced by a "long-term, open-ended commitment" to the company.
"Since their appointments early last year, Sam and Chris have led a transformation of the business and established a track record of delivering on their promises," du Pleiss said.
Walsh’s cost-cutting program has stripped out $3.2 billion of expenses since 2012. A further $1 billion in savings are being targeted by the end of next year.