BHP, a leading mining company, will reduce short-term incentives for all employees by 20 percent for the 2023-24 fiscal year, as reported by the Australian Financial Review (AFR).
The decision stems from the company’s failure to meet internal performance targets, including missed cost and production goals in certain divisions.
The affects of a tragic incident at the Saraji coal mine in Queensland, where a worker died in January, has been cited as a contributing factor.
AFR sources reveal some BHP employees are unhappy with the incentive cuts.
They point to hiring freezes in some divisions that have impeded their ability to achieve targets.
They also criticize what they consider to be unrealistic internal goals.
This isn’t the first time BHP has slashed employee incentives.
In 2019, the company cut them by 20 percent following several operational mishaps.
The cuts included a train derailment in Western Australia in November 2018 and another fatality at the Saraji coal mine a month later.
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During that period, then-CEO Andrew Mackenzie saw his annual pay reduced by nearly a quarter.
This was due to factors like equipment failures at the Olympic Dam in South Australia and the Escondida mines in Chile.
Current CEO Mike Henry has emphasized the importance of enhancing safety measures across all operations, mainly after more fatalities occurred last year.
In February, BHP reported a dip in profits for the first half of the year, affected by a $2.5 billion impairment charge related to its nickel business in Western Australia and a further $3.2 billion in payments linked to the Samarco dam disaster in Brazil.
BHP has also announced disbanding certain global corporate teams as part of its broader cost-cutting strategy.
