Mining services company Boart Longyear has taken the unusual step of awarding its recently appointed chief executive Richard O’Brien a US$5 million cash grant.
Mining services company Boart Longyear has taken the unusual step of awarding its recently appointed chief executive Richard O’Brien a $US5 million cash grant.
The “strategic retention grant” will be paid in cash in three instalments over the next three years.
Boart chair Barbara Jeremiah said the grant to US-based Mr O’Brien “will ensure that his remuneration package remains competitive in the market”.
In a statement, Boart indicated the cash grant would effectively replace $US5 million of equity grants announced last year.
“Mr O’Brien has indicated that he is willing to voluntarily forego the initial sign-on grant he received in 2013,” according to the statement.
ASX-listed Boart also said the board may elect to seek shareholder approval to convert some or all of the (cash) grant into options.
Boart’s share price has slumped sharply since February 2013, when it announced the recruitment of Mr O’Brien, who previously ran gold miner Newmont Mining.
After peaking at $2.25 in February last year, the share price hit a low of 27 cents in December before recovering to about 45 cents currently.
The falling share price reflects weakness in the broader mining services sector, which has resulted in Boart and many of its peers cutting their earnings.
Mr O’Brien’s salary package includes a base salary of $US750,000 per year, a target annual bonus equal to 100 per cent of his salary, and a long-term incentive grant with a target value of $US2.5 million.
By comparison, Perth-based mining equipment supplier Emeco Holdings appointed Ken Lewsey as its new chief executive in October last year.
Mr Lewsey’s package includes a base salary of $850,000, a short-term bonus up to 100 per cent of his salary and a long-term equity incentive grant this financial year equal to 75 per cent of his salary.
Engineering contractor Calibre Group recruited its new chief executive Peter Reichler on a somewhat lower package last November.
Mr Reichler has a base salary of $750,000, a short-term incentive if up to $200,000, and a one-off grant of $100,000 of Calibre shares.
All of these packages pale next to Seven Group Holdings, which owns the Caterpillar equipment business WesTrac.
Its new chief executive Don Voelte is paid a base salary of $3.2 million, with potential to double that through bonuses.
