Mining giant Rio Tinto suffered a shareholder rebellion over extravagant boardroom pay deals.
After the second leg of its annual general meeting in Australia yesterday, some 41% of investors either voted against or abstained from voting on the group’s executive remuneration policies.
A total of 421.3m shareholder votes were against the motion, but with 704.1m voting in favour the remuneration report was approved
Shareholder activist group RiskMetrics had advised voting against the remuneration report after Rio proposed raising its bonus limits for executives.
The total pay of Tom Albanese, chief executive, in 2009 was £3.8M compared with £2.1M in 2008. Guy Elliott, chief financial officer, received £2.6M, compared with £2.5M in the prior year. Mr Albanese's basic pay was £907,500 and Mr Elliot's was £675,500.
Part of the bonus was for the successful recapitalisation of the group's balance sheet. Rio was left exposed after the group's purchase of Canadian group Alcan at the top of the commodities boom made the company heavily indebted in the midst of a recession.
However, RiskMetrics argued that this ‘could be interpreted as a reward for correcting earlier strategic mistakes’.
Many investors blame the Alcan acquisition, struck at the height of a commodities boom, for last year’s blockbuster rights issue.
Jan Du Plessis, Rio's newly installed chairman, acknowledged the protest at the shareholder meeting.
"I am going to make it my business personally to understand these concerns more fully by engaging with and listening to our major shareholders in the months ahead," Mr Du Plessis added.
"You can trust me when I say that I will do all I can to avoid such objections in the future."