Page 146 - Annual Report 2020

We have also addressed last year’s commitment to clarify and Summary
strengthen the link between executive remuneration and climate With the COVID-19 pandemic this year, FY2020 has presented
change for FY2021. The weighting on climate change is now many challenges, not only for BHP, but also for many other
10 per cent of the 25 per cent HSEC weighting in the CDP companies, governments, employees, families and communities
scorecard, which compares to circa 4 per cent allocated to across the world. On behalf of the Remuneration Committee,
climate change in the prior STIP, and we have enhanced the I would like to recognise the hard work, dedication and sacrifices
disclosure of climate change-related performance targets. of all of our employees. They have aligned around a common cause,
Further details are set out in section 3.3.9. and through their steadfast commitment, they have remained safe
Mike is BHP’s only Executive Director, however, the Committee and healthy, continued to support their communities, and enabled
has also reviewed the base salaries and total target remuneration BHP to generate strong results for all stakeholders.
packages for other Executive KMP and determined that there would The Committee believes the remuneration outcomes for FY2020
be no increases to base salaries as a consequence of that review, reflect an appropriate alignment between pay and performance
and that other aspects of their remuneration arrangements would during the year and are also fair in terms of the global context
remain unchanged. in which decisions have been made. We are confident that
Remuneration outcomes for the Chair shareholders will recognise this as a continuation of our long-held
and Non-executive Directors approach. We look forward to ongoing dialogue with, and the
Fees for the Chair and Non-executive Directors are reviewed support of, BHP’s shareholders, and I very much look forward to
meeting shareholders face-to-face when once again we are able
annually and are benchmarked against peer companies. No to do so. As always, we welcome your feedback and comments
changes to the Chair’s fee will be made for FY2021. This follows on any aspect of this Report.
a review in 2017, where a decision was made to reduce the Chair’s
annual fee by approximately 8 per cent from US$0.960 million
to US$0.880 million with effect from 1 July 2017, which followed
an earlier reduction, effective 1 July 2015, of approximately
13 per cent from US$1.100 million to US$0.960 million.
Base fee levels for Non-executive Directors will also remain
unchanged, after they were also reduced effective 1 July 2015 by Susan Kilsby
approximately 6 per cent, from US$0.170 million to US$0.160 million Chair, Remuneration Committee
per annum. Prior to the above reductions in fee levels for the 3 September 2020
Chair and Non-executive Directors, their fees had remained
unchanged since 2011.

3.2 Remuneration policy report

BHP has an overarching remuneration policy that guides the Remuneration Committee’s decisions. Under UK legislation, shareholders
have the opportunity to vote on our remuneration policy every three years, with binding effect in regard to the Directors (including the
CEO). Under Australian legislation, shareholders also have the opportunity to vote on our remuneration policy in conjunction with the
broader Remuneration Report, each year at the AGMs as it applies to all KMP under a non-binding advisory vote. Our remuneration policy,
which was approved by shareholders at the 2019 AGMs, has not changed and is repeated below.
Remuneration policy for the Executive Director

This section only refers to the remuneration policy for our CEO, who is our sole Executive Director. If any other executive were
to be appointed an Executive Director, this remuneration policy would apply to that new role.

3.2.1 Components of remuneration
The following table shows the components of total remuneration, the link to strategy, the applicable operation and performance
frameworks, and the maximum opportunity for each component.
Remuneration component
and link to strategy Operation and performance framework Maximum (1)
Base salary • Base salary, denominated in US dollars, is broadly aligned with salaries for 8% increase per annum
A competitive base salary is paid comparable roles in global companies of similar global complexity, size, (annualised) or inflation
in order to attract and retain reach and industry, and reflects the CEO’s responsibilities, location, skills, if higher in Australia.
a high-quality and experienced performance, qualifications and experience.
CEO, and to provide appropriate • Base salary is reviewed annually with effect from 1 September. Reviews are
remuneration for this important informed, but not led, by benchmarking to comparable roles (as above),
role in the Group. changes in responsibility and general economic conditions. Substantial
weight is also given to the general base salary increases for employees.
• Base salary is not subject to separate performance conditions.
Pension contributions (2) • Pension contributions are benchmarked to comparable roles in global A pension contribution
Provides a market-competitive level companies and have been determined after considering the pension rate of 10% of base
of post-employment benefits contributions provided to the wider workforce. salary applies.
provided to attract and retain a • A choice of funding vehicles is offered, including a defined contribution
high-quality and experienced CEO. plan, an unfunded retirement savings plan, an international retirement plan
or a self-managed superannuation fund. Alternatively, a cash payment may
be provided in lieu.

144 BHP Annual Report 2020