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Former Rio Tinto CEO handed 20% pay rise despite

caves scandal
Jillian Ambrose

The disgraced former chief executive of Rio Tinto was handed £7.2m for last year, a
pay rise of 20%, despite overseeing the destruction of the sacred 46,000-year-old rock
shelters at Juukan Gorge in Western Australia.

Jean-Sébastien Jacques agreed to step down from the mining company “by mutual
agreement” with Rio Tinto’s board after the Juukan Gorge scandal last year, but the
ousted mining boss will still take home his biggest ever pay packet for his time as chief
executive.

Mon 22 Feb 2021 13.12 GMT

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6/10/2021 Former Rio Tinto CEO handed 20% pay rise despite caves scandal | Rio Tinto | The Guardian

On top of the £7.2m pay for last year, Jacques, who stepped down on 1 January, will
take home £519,000 for his remaining five months of unworked notice period this year,
and £215,000 for his unused leave.

Other senior executives who stepped down in the wake of the Juukan scandal have
also received financial benefits. Simone Niven, the head of corporate relations, and
Chris Salisbury, the head of iron ore, were given “termination benefits” worth $1m and
$1.3m respectively.

The decision to blow up the rock shelters in the Pilbara region of Western Australia,
which were highly significant to the area’s Aboriginal traditional owners, the Puutu
Kunti Kurrama and Pinikura people, was taken to help the Anglo-Australian miner
access better-quality iron ore deposits.

It led to an outcry from Indigenous Australian groups and investors, who denounced
the board’s decision to dock Jacques’ pay by £1m as inadequate, and to calls for Jacques
to be removed as chief executive.

Jean-Sébastien Jacques stepped down as chief executive in the wake of the scandal. Photograph: Hannah McKay/Reuters

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6/10/2021 Former Rio Tinto CEO handed 20% pay rise despite caves scandal | Rio Tinto | The Guardian

Jacques was replaced at the start of the year by Rio Tinto’s former chief financial
officer, Jakob Stausholm. Stausholm said the company has been “working to restore
trust with the Puutu Kunti Kurrama and Pinikura people”.

“We are also developing additional measures to strengthen our partnerships with
traditional owners in Australia, including a commitment to modernise and improve
agreements in the Pilbara, home to our iron ore business,” he said.

In Rio Tinto’s annual report, the board said Jacques’ windfall was in large part due to
the significant increase in the company’s share price after he became chief executive
of the miner in 2016. The company’s market value has more than tripled in the last
five years, to more than £78.4bn, and for 2020 it handed shareholders a record
payout of £9bn, the highest in the company’s 148-year history.

The company’s fortunes have improved in line with the rising price of iron ore,
which is used to make steel, and copper for use in electricity infrastructure. The
strong global demand for the metals has driven copper and iron ore prices to nine-
year highs in recent weeks.

Rio Tinto’s chairman, Simon Thompson, said that allowing the destruction of the
Juukan Gorge was “a breach of both our values and the trust placed in us” by the
“traditional owners of the land on which we operate”.

“In the months and years to come, we are determined to learn the lessons from
Juukan Gorge, to rebuild the trust that has been lost, and to re-establish our
leadership in environmental and social performance,” he said.

“Today, shareholders are increasingly focused not only on the financial return that
they can earn on their investment, but also on how that return is made. In order to
build and maintain trust in Rio Tinto, we must seek to achieve environmental and
social goals alongside generating profit for our shareholders.”

The Australasian Centre for Corporate Responsibility (ACCR) said Rio Tinto’s handling
of the disaster raises more questions about the fitness of its current board.

The group has called on investors to “hold Thompson and other board members
accountable” and insist on “necessary, constructive change to the company’s board
composition so that the task of rebuilding community trustcan begin in earnest”.

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