Coal price boom delivers CEO pay bonanza
Over the past couple of months, we have seen several Australian coal producers report exorbitant financial year profits off the back of record-high coal prices. BHP recorded a net profit of AU$44.9bn globally, with cash earnings of $9.2bn from its Queensland coal operations and $2.8bn from Mt Arthur in the Hunter Valley.
Meanwhile, South32 made a $3.9bn profit and earnt $2.2bn from its Illawarra Metallurgical Coal operation. And Whitehaven, which operates exclusively in Australian coal, made a net profit of $1.95bn. While members may be wondering when all this money might make it to their pay packets, CEOs and company executives have already been raking in generous bonuses on top of their already sky-high salaries.
BHP CEO Mike Henry’s total remuneration for the financial year was $21.3 million, with his base salary of $2.5 million dwarfed by $5.7 million in cash and deferred shares and a $12.6 million long-term incentive bonus. These figures have him raking in 123 times the money earnt by the median BHP employee worldwide. Yet, BHPs own financial report concedes that some $7.6bn of its $8bn increase in underlying earnings can be attributed to factors out of BHP’s control, primarily very high commodity prices.
Executives were also rewarded handsomely at South32. CEO Graham Kerr took home a total realised pay of $4.3 million after scoring a bonus of $2.43 million. Chief Operating Officer for Australia, Jason Economidis’ bonus of $964,000 took his total earnings to just shy of $2 million. And, for the 2023 financial year, both are set to enjoy a 5 per cent increase in their base salary.
At Whitehaven Coal, where elevated coal prices carried the company to a 1396% increase in cash earnings, CEO Paul Flynn’s $1.87 million cash and deferred equity bonus assisted his total remuneration package reaching $4.5 million. He is also set to receive a 21 per cent increase in his base salary for the 2023 financial year.
With the record coal prices and profits, we have witnessed this year, we can expect to see even more exorbitant bonuses for executives as internationally headquartered companies head closer to the conclusion of their respective financial years.
*NOTE: BHP reports its profits and executive remuneration in US dollars. South32 reports its profits in US dollars. For this article, these figures have been converted to Australian dollars based on the exchange rate at 30 June 2022.