Bigger bonuses on the way at BHP

BHP BILLITON is seeking shareholder approval to increase the size of bonuses paid to its most senior executives.

In a notice for its annual meeting the company said the move would bring the remuneration of its division chiefs "towards the median of [its] peer group".

At the meeting in Melbourne on November 27 the company wants approval to increase the maximum size of short-term bonuses available to its most senior executives to 320 per cent of base salary, up from 210 per cent. Members of its top management committee received base salaries of at least $US854,000 ($1.02 million) last year and total remuneration packages of at least $US3.3 million.

In tandem with the attempt to increase bonuses, BHP will require those executives to hold shares worth at least 200 per cent of base salaries, up from the present 50 per cent requirement.

In a separate resolution, the miner is seeking to award its chief executive, Marius Kloppers, with a long-term incentive share package, worth up to $13.2 million at yesterday's share price, if his company outperforms its peer group's total shareholder returns by 5.5 per cent a year over five years.

The board also wants to award Mr Kloppers another $US1.8 million of deferred shares or options, subject to a two-year vesting period.

BHP is also seeking to raise the cap on remuneration for its non-executive directors from $US3 million to $US3.8 million. It argued that it had recently raised the number of board members to 12, from 10, to help succession planning. BHP last increased the remuneration cap in 2006.

Several directors, including BHP's long-serving chairman, Don Argus, will face re-election.

In addition, the shareholder activist and Crikey founder Stephen Mayne is seeking a position on the board. Mr Mayne said he was opposed to BHP's proposed takeover of Rio Tinto because it could be "highly dilutive for BHP shareholders". He is also pushing for Mr Argus to retire in view of his age and his length of tenure as a director.

BHP said its board did not consider Mr Mayne had the necessary skills and experience to be a director of the company.

BHP shares closed 3c lower at $37.87 yesterday.

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