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Pay cut for Rio boss Walsh ... but still pockets $9m

Business

Rio Tinto boss Sam Walsh's pay was about 12 per cent lower last year, with the mining giant slumping to an annual loss amid a global commodities slump.

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Walsh earned $9.13 million in 2015, down from nearly $10.4 million in 2014.

While his salary increased slightly to $1.98 million for the year, his short- and long-term incentive payments fell sharply.

Rio, the world’s second largest iron ore miner, in February reported a $US866 million ($A1.22 billion) annual loss amid a collapse in iron ore, copper and aluminium prices.

It announced it would slash returns to shareholders after ending its generous dividend policy and outlined further cuts in capital expenditure and operating costs.

Walsh’s short-term incentive payments in 2015 were affected on account of four deaths at the company’s operations during the year, Rio’s annual report, released overnight, shows.

He also received lower long-term incentives because of a lesser number of share awards vesting during the year and the steep decline in Rio’s share price.

Rio Tinto’s remuneration committee chairman John Varley said a salary freeze for executives and other employees would continue in 2016.

“This was a difficult but necessary decision reflecting the exigencies of the commodities cycle, but is no reflection on the performance and contribution of our people,” he said.

The company had told employees in January there would be no pay increases in 2016, in view of the tough year ahead. It also asked employees to limit their travel, and flagged further scrutiny over consultancy and contractor spending.

Rio, which has been hunting for savings in the face of a continuing slump in prices, said the number of its global employees fell to 54,938 in 2015, from 59,775 in 2014.

Employee numbers in the Australia and New Zealand region fell the most, down to 22,988 in 2015, from 24,158 the previous year.

The mining giant has also boosted its coal reserves by a quarter, to 6,805 million tonnes, according to the annual report.

Rio said it has standardised geology models and reworked strategic mine planning processes, helping to boost estimated reserves at its NSW and Queensland mines.

AAP

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