* Annual General Meeting will vote on the plan in April
* Addresses concerns about gains based on share price swings
LONDON, March 13 Major miner Anglo American
is set to cap executive bonuses, it said on Monday,
following a shareholder revolt last year over high payouts even
when the company's share price had crashed.
In its annual report, Anglo American said on Monday it would
reduce maximum annual bonuses for Chief Executive Mark Cutifani
to 300 percent from 350 percent of basic salary, bringing it in
line with other executive directors.
For Cutifani, the limit is 13.1 million pounds ($16
The company also said that from this year, the value of
long-term incentive plans (LTIP) would be capped at twice the
face value of the award at the time of vesting - a response to
shareholder concern that executives could gain from share price
swings when they were not backed up by improved company
"We were determined to address investors' concerns about the
potential windfall gains for executive directors," Philip
Hampton, chairman of the remuneration committee, wrote in the
Even then, executives would only be eligible for the limit
of twice the face value if they met performance targets.
Cutifani's pay for 2016 was just under 4 million pounds,
which included a cash bonus but no LTIP award as targets were
In addition, Anglo American said it was increasing executive
directors' salaries in 2017 by 2 percent after freezing them in
2016 "to recognise the challenges faced by the Company at the
beginning of the year".
The increase in 2017 is in line with pay awards to the
overall British employee population, it said.
The new policy will be voted on at Anglo American's annual
general meeting (AGM) in April.
At last year's AGM, opposition to the remuneration policy
was significant at close to 50 percent as shareholders objected
to windfalls for directors linked to volatile commodity markets
rather than shrewd strategy.
After a widespread commodity slump at the end of 2015 and in
early 2016, Anglo American recovered strongly last year when it
was the top performer on the blue chip FTSE, rising around 300
($1 = 0.8188 pounds)
(Reporting by Barbara Lewis; additional reporting by Simon
Jessop; editing by Susan Thomas)