Mark Cutifani, the no-nonsense Australian, is focusing on the rich seam of problems at the troubled mining giant
Mark Cutifani ought to have his hard hat on. The last two chief executives of Anglo American before him were bulldozed out by angry shareholders and now, almost exactly a year into the job, the new boss has provocatively dumped his £5.3m pay deal in front of them.
The Australian-born Cutifani has the distinct advantage over his immediate predecessor, Cynthia Carroll, of being both a qualified mining engineer and a man. But still, the proposal to extract £2m compensation for the loss of incentives at his previous job, plus £836,000 to cover the move from Johannesburg, is a brave ask.
Last year, investors gave Cutifani a bloody nose after just a few weeks at the FTSE 100 mining giant when 28pc voted against the remuneration report. Now they have the details, what will happen at the annual meeting next month?
“They will vote and we will see,” says the no-nonsense Cutifani. “We’ve made quite a few changes since last year, and I’m good with that.” He accepts the pay deal could have been improved with more performance links. But, frankly, his focus is on the rich seam of problems at Anglo. If he can properly extract and resolve those, shareholders will gladly part with any pay deal, however gold-plated.
Cutifani, a father of seven, is not the first to try. Anglo has been an almost permanent problem for investors for more than a decade. Founded in 1917 when Sir Ernest Oppenheimer persuaded Herbert Hoover, the future US President, to invest in a South African gold mine, Anglo has since expanded into a sprawling, diversified miner with interests ranging from copper and nickel to platinum, gold and diamonds (through its De Beers subsidiary).
In 2006, the then-chief executive Tony Trahar, an Anglo lifer of 30 years, was ousted amid investor complaints that the miner did not have a coherent strategy and its share price was lagging behind rivals Rio Tinto and BHP Billiton.
Carroll – a shock replacement, as much for being an American geologist as female – reduced the headcount by 50,000 and sold $11bn (£6.6bn) of assets. But her disastrously expensive $5.5bn acquisition of the Minas Rio iron ore project in Brazil eventually cost Carroll her job, too.
She was not alone. By then, the hubris that had gripped all the big global miners was fully exposed by falling commodity prices. Some 20 mining bosses stepped down during 2012, including Tom Albanese, who quit Rio Tinto after a $14bn write-down. BHP, Xstrata and Vale all saw changes at the top.
In this environment, Cutifani was a gem to discover for Sir John Parker, chairman of Anglo, who was in search of a new chief executive. Cutifani says: “I was pretty lucky because I hadn’t made a major strategic blunder and hadn’t blown up a project – that was an advantage.”
Cutifani was born in Wollongong, a coal mining area south of Sydney. Three months before he was due to start at law school, he signed up for a cadetship at the local deep mines.
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