BlueScope executive pay under scrutiny

Pay packets for BlueScope Steel executives will come under shareholder scrutiny at the steelmaker's annual general meeting in Melbourne tomorrow.

BlueScope was confronted with the possibility of a board spill this year if it received a second "strike" under laws designed to give shareholders more say over executive pay.

Shareholders at last year's meeting delivered a 39 per cent vote against the company's remuneration report, which included $3 million in bonuses to directors and executives.

But this year, the Australian Shareholders' Association (ASA) intends to support the company's remuneration report.

The report acknowledged BlueScope was under pressure from shareholders who wanted executive pay reduced, reflecting the company's share price, and no dividends.

On the other hand, it said the company wanted to retain executives tempted by better offers in less challenging industries.

Highlights from the report, released earlier this year, included a pay freeze for managing director and chief executive Paul O'Malley, who received just under $2 million.

The figure was a 52 per cent cut on 2010-11 due to no short- or long-term incentives.

Some managers, including Australia and New Zealand boss Mark Vassella, received base pay increases in 2011-12, but the company said there would be no "across-the-board" increases for 2012-13.

Mr Vassella's salary rose to $962,000 with no bonus, compared to $763,000 with a $269,000 bonus the year before, while he also received a significant increase in non-monetary benefits.

The remuneration report pointed to achievements including restricting costs associated with the company's restructure to $380 million, less than its anticipated cost of at least $400 million.

A BlueScope spokesman said the board had undertaken a comprehensive review of executive pay policies in the past year, in consultation with large shareholders and others including the ASA, which was reflected in the 2012 report.

"Additionally, no Australian executives in the remuneration report will receive a salary or base-pay increase in the current year. Their salaries have been frozen," he said.

In relation to Mr Vassella, the spokesman said his role had increased significantly since he was promoted from his position as BlueScope's North America president and awarded a pay rise in July last year.

As a result of the restructure, two other executives left the business and he had taken on their roles.

"Since his appointment, in July 2011, Mr Vassella has not received a base-pay rise," the spokesman said.

Paul O'Malley

Paul O'Malley

ASA chief executive Vas Kolesnikoff said the organisation "would like to see further improvements" in BlueScope's executive pay system but would support the remuneration report.


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