The boss of FTSE miner Rio Tinto will have his bonus reduced by £2.7m after the company destroyed sacred caves in Australia.
Chief executive Jean-Sebastien Jacques and two other executives will take the financial hit after the company destroyed two caves in Western Australia – against the wishes of Aboriginal traditional owners – as part of a mine expansion.
Shares in the FTSE miner began the week trading in London up 2.3 per cent at 4,793p per share.
The bonus reduction falls short of the management shake-up that some investor groups had been pushing for.
Rio will cut the short-term bonuses of Jacques, head of iron ore Chris Salisbury and head of corporate relations, Simone Niven by about $3.7m in total.
Jacques will take the majority of the reduction, with Salisbury and Niven losing around £500,000 each.
The chief exec’s long-term incentive plan award would also be reduced by about £1m.
Jacques was paid £5.8m last year.
The destruction in May sparked public outrage and an Australian government inquiry that senior Rio leadership faced early this month.
The caves, near Pilbara in Western Australia, were thought to been first occupied 43,000 years ago.
The rockshelters were above about 8m tonnes of high-grade iron ore, with an estimated value of £75m.
However, a board review concluded that while Rio Tinto had obtained legal authority to impact the Juukan rockshelters, it fell short of its own standards.
Simon Thompson, chairman of Rio Tinto, said it will change gpverance practices “to ensure we do not repeat what happened”.
“We fully recognise traditional owners must be treated as equal partners which includes regular, open and respectful dialogue….
“It is clear that no single individual or error was responsible for the destruction of the Juukan rockshelters, but there were numerous missed opportunities over almost a decade and the company failed to uphold one of Rio Tinto’s core values – respect for local communities and for their heritage,” Thompson added.