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Likely BHP payout irks government

By Geoff Hiscock
CNN Asia Business Editor

BHP Billiton CEO Gilbertson quit on Monday, citing irreconcilable differences with the board
BHP Billiton CEO Gilbertson quit on Monday, citing irreconcilable differences with the board

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SYDNEY, Australia (CNN) -- Australia's acting prime minister, John Anderson, has attacked a possible A$30 million ($17 million) payout for departing BHP Billiton CEO Brian Gilbertson, calling such an amount "completely unjustified."

After just six months in the job, Gilbertson quit suddenly on Monday because of "irreconcilable differences" with the board of the world's largest diversified resources group. (Full story)

Gilbertson's payout is yet to be detailed by BHP Billiton.

A spokesman told CNN that because the severance package is "quite complex," it could take some time before it is finalized and said it is not yet possible to give details.

He said the figure of A$30 million was purely speculative.

But Anderson, deputy prime minister and Australia's stand-in leader while John Howard is on holiday, said Wednesday that reports Gilbertson might receive as much as A$30 million were "most disturbing and would be poorly viewed by most Australians."

Shareholders' interest

Anderson said that on top of Gilbertson's "already substantial wage", a possible payout of A$5 million a month for every month he worked as CEO was completely unjustified.

He said BHP Billiton's shareholders need to consider whether CEOs deserve this sort of reimbursement, particularly when the period of employment is so short.

In response, BHP Billiton said it has always acted in the interests of shareholders and adhered to the highest standards of disclosure about its executive remuneration.

It said Gilbertson's payout would be fully reported in the 2003 annual report to shareholders in September, or earlier if it became available.

Gilbertson, a South African who was executive chairman of London-listed Billiton before the merger with BHP, took a four-year contract in mid-2001 when he became deputy chief executive of the new entity.

Succeeded Anderson

He succeeded Paul Anderson as CEO of BHP Billiton on July 1 last year.

Shares in the company closed down 3 cents or 0.3 percent on Wednesday at A$9.96.

Analysts generally have welcomed the appointment of Charles 'Chip' Goodyear, the company's former chief development officer, as Gilbertson's replacement.

While Gilbertson was known for his autonomous management style, Goodyear is seen as a member of the BHP team. An American, he joined the Australian resources group in 1999 as chief financial officer.

Goldman Sachs analyst Mike Byrne said this week that the chances for capital returns to shareholders was enhanced under Goodyear's stewardship.



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