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Mackenzie takes over

TODAY marks the first day in the top job for new BHP Billiton chief executive Andrew Mackenzie.

Kristie Batten
Mackenzie takes over

However, the Scotsman has been making his mark on the company since his appointment on February 20, describing the three-month handover period from former CEO Marius Kloppers as “luxurious”

Kloppers will remain on the board until October.

Mackenzie will receive less pay than his predecessor, with a base salary of $US1.7 million ($A1.68 million), up from his previous pay of $1.2 million, but below Kloppers’ $2.2 million base pay.

He’ll receive a pension of 25% of his base salary, down from 36%, a short-term incentive target opportunity of 160% of base salary, reduced from a maximum 320%, and a long-term incentive award for 2013 of 400% face value of base salary, subject to shareholder approval.

Incentives comprise 72% of Mackenzie’s remuneration.

JP Morgan recently said the release of Mackenzie’s salary seemed to back up his planned focus on productivity, cost-cutting and capital discipline.

Mackenzie relocated from London to Melbourne with his wife, Liz, a month ago and he has said he intends to continue BHP’s strategy but wants to build momentum.

“There are lots of things that are great about this company that I have no intention of changing,” he said in February.

One thing he has changed is the structure of the company’s group management committee (GMC), streamlining it by removing a level of management.

Petroleum division president Mike Yeager will leave his role and the company on July 1, while diamonds and specialty products president Tim Cutt, a petroleum engineer, will return to the petroleum business as its president from July 2 but will retain responsibility for potash.

Base metals president Peter Beaven will become copper president, which will comprise all of his current responsibilities under a different title.

Former energy coal president Dean Dalla Valle will take over responsibility for all of BHP’s coal assets, while metallurgical coal president Hubie van Dalsen will leave the company.

Former ferrous and coal chief executive officer Marcus Randolph, currently on extended sick leave, will leave the GMC as of today, while former aluminium, nickel and corporate development CEO Alberto Calderon will also leave the GMC but will remain as an advisor to Mackenzie.

Former minerals exploration president Daniel Malchuk will take over as aluminium, manganese and nickel president, while current manganese president Tom Schutte and aluminium and nickel president Glenn Kellow will assist Malchuk with the consolidation.

Jimmy Wilson retains the title of iron ore president.

“With the company’s focus having shifted to an even greater emphasis on operational excellence, the removal of a layer of management brings the operations closer to the CEO and ensures alignment between strategic and managerial leadership,” Mackenzie said last month.

“All of this will be critical in driving our productivity agenda.

“The new team will be tireless in its pursuit of best in class in terms of dollars spent per tonne mined and barrel lifted, maintaining our capital discipline, delivering sustainable returns for our owners and continuing to contribute to the communities and countries in which we operate.”

JP Morgan said streamlining would go down well with shareholders and would also help drive the productivity agenda internally.

There is no word yet on any possible further divestments after recent sales of its Ekati diamond mine, and just last week, its Pinto Valley copper operation.

Mackenzie’s petroleum background and his 22 years at BP may signal a larger focus on the company’s petroleum business.

He will present at Bank of America Merrill Lynch’s Global Metals, Mining & Steel Conference in Barcelona next Tuesday.

BHP shares last traded 1% up to $A34.88.

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