BHP cuts employee incentives by 20% globally — report

The Australian Financial Review reported on Thursday that the world's largest mining company BHP (ASX, LON, NYSE: BHP) will reduce short-term incentives for all employees by 20% for the 2023-24 fiscal year.

According to stakeholders quoted by AFR, this move is due to BHP's failure to meet internal performance targets.

According to the same article, BHP's management team blamed the division that failed to meet cost and production goals and the incident where the lives of workers were lost at the Saraj coal mine in Queensland in January.

“Some BHP employees were upset by the reduction in incentives and pointed out to the Australian Financial Review that employment freezes in several departments have affected the ability to achieve goals and are viewed as unrealistic internal goals.

This isn't the first time BHP has cut employee incentives around the world. In 2019, it was reduced by 20% due to many operational disasters, such as the train derailment accident that occurred in Western Australia in 2018/11 and the fatal accident that also occurred at the Saraj coal mine one month later.

Chief Executive Officer (CEO) Andrew McKenzie at the time had his annual salary reduced by almost a quarter by the end of 2019 due to other issues such as equipment failure at the Olympic dam in South Australia and the Escondida coal mine in Chile.

Last year, CEO Mike Henry promised to strengthen safety measures in all businesses in response to the occurrence of even more fatal accidents.

BHP reported in February that profits for the first half of the year were affected by impairment costs of 2.5 billion dollars related to the nickel business in Western Australia and payments of 3.2 billion dollars associated with the Samarco dam accident in Brazil. The company revealed that it will disband some of its global corporate teams as part of cost reduction measures.