Lonmin has cut its CEO remuneration by 66% from the £1.7m it paid in 2013 when Magara received £703,167 and Scott £995,729, its annual report published on its website on Wednesday, 23 December, showed.
Lonmin CEO remuneration peaked at £1.8m which Ian Farmer received in 2010, 66% of which was classified as "annual bonus paid against maximum opportunity". This has been cut to zero for the past two years.
"I would like to emphasise that the committee and your management have been very conscious of the loss of value suffered by you, our shareholders," remuneration committee chairman Jim Sutcliffe said in the annual report. "As you can see, the management's readiness to sacrifice their own contractual entitlements in recognition thereof has been fulsome."
Lonmin chairman Brian Beamish said: "The distribution of the Glencore shareholding, low metal prices and consequent poor financial performance, and the maturing of our existing bank credit facilities have combined to weigh heavily on the share price of your company.
"As a shareholder, I wholly understand the concern and frustration this has caused. Your board and management believe in the longer-term fundamentals of the industry, but I appreciate that offers little consolation when you have seen the value of your shareholding fall so significantly."
Lonmin intends cutting its workforce by 6,000. By 6 November 2,120 employees had left. It also reduced its contractors by 1,016 people.
Lonmin expects to produce 700,000oz of platinum this financial year, dropping to 650,000oz in 2017.
Its cost base will be cut by R700m in this financial year, and by a further R1.6bn the following year, Magara said.
Source: BDpro
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