BHP urged to hit exec pay for $445m payroll blunder

afr.com:

BHP directors have been accused of going soft on top executives over the “underpayment” of staff, with proxy adviser CGI Glass Lewis telling the board it expects more “consequences” for the incident to be felt in next year’s pay.

BHP revealed in June that almost 29,000 past and present employees had been the victim of a payroll error, which incorrectly deducted too much annual leave from some employees while other workers were wrongly denied allowances owed for working at Port Hedland.

CGI Glass Lewis said the payroll error justified a bigger hit to BHP CEO Mike Henry’s short-term bonus. Ian Waldie

By August, the number of affected past and present employees had risen to 34,000, with BHP expecting to spend $US280 million ($445 million) rectifying the problem and compensating victims.

The glitch had been incorrectly deducting annual leave from workers’ balances since the introduction of new workplace laws in 2010.

BHP chief executive Mike Henry joined BHP’s executive committee in November 2011 and became chief executive in January 2020; directors decided Mr Henry’s level of responsibility for the payroll errors warranted a 3 per cent deduction from the part of his bonus that was linked to financial performance.

But CGI said the incident justified a bigger and broader hit to Mr Henry’s short-term bonus.

“We have reservations regarding the annual bonus outcome in light of the underpayment issue identified during the year,” said CGI in a note to clients. “We are concerned that this issue has not impacted other components of the scorecard.”

Mr Henry earned total remuneration worth $US13.7 million ($21.8 million) in the year to June; his base salary was $US1.74 million, his short-term bonus was worth $US3.7 million, and his