Cash bonuses for CEOs at Canadian mining companies decline sharply

    
    CEO salaries increased by almost 9% but cash bonuses declined by 18% in
    2009
    

TORONTO , Sept. 14 /CNW/ - Despite a slowdown in the mining industry, the CEOs of these companies have seen year-over-year increases in salaries according to the 2009 Mining Industry Salary Survey, researched and produced by Coopers Consulting Ltd. (Coopers Consulting) and PricewaterhouseCoopers LLP (PwC). Average annual base pay for Canadian CEOs this year rose to $484,000 compared to $443,000 in 2008. However, the average Canada-wide bonus paid to CEOs declined from 79% in 2008 to 61% of the annual base pay in 2009.

    
    -   93% of Canadian CEOs at mining companies were eligible for short term
        incentive compensation (i.e. an annual cash bonus), but of the 54
        companies reporting CEO salaries, only 34 (or 63%) reported actual
        cash bonus payouts.

    -   The highest reported CEO cash incentive percentage amount was 104% of
        base pay.

    -   The average actual CEO cash bonus payout reported was $303,000 and
        the average total CEO cash compensation package (annual base salary
        plus cash bonus) was approximately $670,000.
    

"Of significance is the fact that the data for the years 2005 - 2008 shows the actual percentage increase of incentive granted to CEOs was above target in each of those years. But this trend did not carry forward to the current year," says Lou Vujanich survey leader and Principal of Coopers Consulting. "For the first time since 2005, the proportionate amount of the annual incentive component has decreased likely reflecting that actual performance over the most recent performance measurement period has been below expectations."

The Coopers - PwC surveys this year covered 44 typical corporate mining office positions, 58 salaried mine site positions and 11 field exploration positions. The 2009 salary survey database contains information on 13,676 individuals--6,160 from Canada and 7,516 from the US. In total, 250 North America mine sites are represented in the 2009 update (107 in Canada and 143 in the United States ).

When it comes to Canadian mine site staff, over 80% of mine site salaried positions are eligible for some form of short-term incentive plan, an increase of 21% since 2002 (59%). The average such bonus paid (across all mine site salaried staff positions) was 15%, a decline of only 2% since 2008.

"The percentage of Canadian salaried mine staff who are eligible for bonuses has increased steadily since 2002," says Len Boggio , survey report contributor and senior partner in PwC's mining practice. "This is a good sign, demonstrating that despite the current economic climate the industry recognizes the importance of graduates entering the mining sector, recruiting new talent and retaining top performing staff."

A comparison of Canada-wide mine site average total cash compensation shows the average overall movement of the total cash compensation salary line for 2009 was only 1.45% (across all mine site positions) over 2008 (compared to 6.0 % in 2008 over 2007 and 3.4% in 2007 over 2006), a reversal of the data from 2008 which at the time showed average total cash compensation increases to be greater than the average increases in annual base pay.

Boggio adds, "Canadian mining companies are facing tougher times, and steering a path through this downturn has required that this industry make changes like any other. In the current climate there is no more valuable an asset than cash, and for cash rich companies, opportunities exist as asset values fall. Options for this group of companies continue to include acquisition or organic growth."

To arrange an interview on the findings of the 2009 Mining Industry Salary Surveys please contact either Kiran Chauhan, PricewaterhouseCoopers, 416-947-8983, [email protected], or Lou Vujanich, Coopers Consulting, 604-632-4611, or [email protected]. For information on how to obtain copies of the report please contact Lou Vujanich, Coopers Consulting.

About Coopers Consulting

Coopers Consulting Ltd. is a BC registered limited liability corporation founded in 2002 by the former National Director and three Principals of the Mining Management Consulting practice of PricewaterhouseCoopers LLP. The Principals of Coopers Consulting all have significant mining industry experience and offer a wide range of management consulting services to the global mining community.

About PricewaterhouseCoopers

PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 146,000 people in 150 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. In Canada , PricewaterhouseCoopers LLP (www.pwc.com/ca) and its related entities have more than 5,200 partners and staff in offices across the country.

"PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity.

For further information: Kiran Chauhan, [phone], [email protected]; Lou Vujanich, [phone], [email protected]