Prevalence of incentive plans at lower staff levels rises significantly
to address talent shortage
VANCOUVER, Sept. 13, 2012 /CNW/ - Canadian mining company CEOs saw their
average total cash compensation decline in 2012, as average base pay
rates remain flat from the previous year, but average annual bonus
payments dropped, according to the 2012 Mining Industry Salary Survey
by Coopers Consulting and PwC.
The Coopers Consulting - PwC survey revealed that the average total
mining CEO cash compensation package—annual base salary plus cash
bonus—was $767,000 in 2012, down 7% from $826,000 in 2011. The average
annual base salary for Canadian mining CEOs was $490,000 in 2012,
almost unchanged from $486,000 in 2011. Meanwhile the average annual
CEO bonus paid in 2012 dropped 31% to $370,000 from the $540,000
reported in 2011. Notably, of the 97% of CEOs who reported being
eligible for a cash bonus payment, only 76% actually received such a
payment in 2012, and the average bonus was 67% of base salary.
"Board Compensation Committees, driven by regulatory changes and
stakeholder demands for greater accountability and transparency, have
been implementing refined performance criteria for CEOs over the last
several years," says Lou Vujanich, survey leader and principal of
Coopers Consulting. "There is also greater emphasis on the variable
equity based component of the overall CEO compensation. These factors
are contributing to lower total mining CEO compensation."
"CEO bonuses are performance driven," said Michael Cinnamond, survey
contributor and senior partner in PwC's mining practice. "Softer
commodities demand and prices, investor risk aversion, the European
sovereign debt crisis and slowdown in China's economy resulted in lower
profitability and market capitalization of many mining companies. This
is affecting CEO performance metrics and compensation."
Staff incentive plans becoming more common
In 2012, across the full range of salaried staff positions found at a
mine site, over 80% of positions continue to be eligible for some form
of incentive plan, such as an annual cash bonus, gainshare plan or
productivity improvement plans. This is a significant change compared
to ten years ago when eligibility hovered at only 59%.
"Market conditions and commodity prices notwithstanding, the increase in
the prevalence of compensation incentives for salaried positions lower
down in the hierarchy is a reflection of the continued fierce
competition to attract and retain qualified mining professionals across
the spectrum of positions" says Vujanich. "The result being upward
pressure on compensation costs for mining companies."
The study also found new graduate mining engineers can reasonably expect
a starting salary in the range of $70,000, a figure consistent with new
graduate hire rates in 2011. After one to two years of experience, the
figure jumps to about $76,000, with fully qualified mining engineers
potentially earning an annual base pay in the vicinity of $90,000. By
region, Western Canadian mining operations generally pay more than
their Eastern Canada counterparts. Compensation data also shows
companies that mine coal, industrial and other minerals generally pay
more across the board, while base metal mining operations generally pay
The 2012 Coopers Consulting and PwC survey covers 65 typical salaried
corporate office positions, 58 mine site positions and 14 field
exploration positions. The 2012 reports contain data for 175 North
American based mining companies or business units. The total 2012
North America mining industry salary survey database contains salaried
staff compensation information for 20,457 incumbents; 8,854 are based
in Canada and 11,603 in the United States. Data is provided for more
than 314 Canada and United States based mining operations (113+ in
Canada and 201+ in the United States).The figures are current to the
end of the second quarter of 2012.
To book an interview with a spokesperson to discuss the findings of the
report contact Jim Nelson, PwC, at 604-806-7047 or firstname.lastname@example.org.
For information on how to obtain copies of the report contact Lou
Vujanich, Coopers Consulting at email@example.com.
Follow PwC on Twitter at @PwC_Canada_LLP and on Facebook at http://www.facebook.com/pwccanada.
About Coopers Consulting
Coopers Consulting Ltd. is a B.C.-registered limited liability company
founded in 2002 by former Principals of the Mining Management
Consulting practice of PwC; each has significant mining industry
About PwC Canada
PwC Canada helps organizations and individuals create the value they're
looking for. More than 5,700 partners and staff in offices across the
country are committed to delivering quality in assurance, tax,
consulting and deals services. PwC Canada is a member of the PwC
network of firms with close to 169,000 people in 158 countries. Find
out more by visiting us at www.pwc.com/ca.
© 2012 PricewaterhouseCoopers LLP, an Ontario limited liability
partnership. All rights reserved.
PwC refers to the Canadian member firm, and may sometimes refer to the
PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.
"PwC" refers to PricewaterhouseCoopers LLP, an Ontario limited liability
partnership, which is a member firm of PricewaterhouseCoopers
International Limited, each member firm of which is a separate legal
SOURCE: PwC (PricewaterhouseCoopers)
For further information:
Jim Nelson, PwC
Tel.: 604 806 7047
Abby Yung, PwC
Tel.: 416 687 8644