Rio Tinto Proposes Major Increase to CEO’s Long-Term Incentive Cap

Rio Tinto’s board has put forward a plan to raise chief executive Simon Trott’s long-term incentive ceiling from five to nine times his base salary. The target remuneration would rise 56 % to £9.8 million, while the maximum potential package would climb 63 % to £18.3 million. Trott’s fixed salary would stay unchanged, but the maximum short-term incentive would increase from 200 % to 300 % of salary. The three-year framework will require shareholder approval at the 2027 annual general meeting. The proposal follows a period of strong results: underlying earnings for the first half of the year were up 43 % year-over-year, free cash flow rose 75 %, and underlying EBITDA increased 28 %.

Rio Tinto Proposes 80% Higher CEO Long-Term Incentive Limit Rio Tinto proposes 56% rise in CEO Simon Trott’s target pay to £9.8 million - report

To justify the higher ceiling, Rio Tinto has broadened its peer group to include U.S. energy majors Chevron and ExxonMobil as well as GE Aerospace, positioning the proposed maximum just below the median of the 19-company benchmark set.

Rio Tinto proposes 56% rise in CEO Simon Trott’s target pay to £9.8 million - report

At the May 6 annual general meeting, John Campbell of the Australian Shareholders’ Association labelled the existing five-times-salary limit as excessive and pledged opposition to the remuneration resolutions. Some investors also voiced worries that the increase could lift senior Australian mining salaries and harm Rio Tinto’s reputation amid a cost-of-living crisis.

Rio Tinto Proposes 80% Higher CEO Long-Term Incentive Limit

Ben Wyatt, chair of the remuneration committee, explained that the revised framework is designed to align incentives with multiyear performance and shareholder returns. Dominic Barton, Rio Tinto’s chairman, defended the benchmarking approach while promising restraint. George Cheveley, portfolio manager at shareholder Ninety One, indicated that higher pay is acceptable provided it remains aligned with shareholder interests.

Rio Tinto proposes 56% rise in CEO Simon Trott’s target pay to £9.8 million - report

• “This is designed to drive business performance in the interests of shareholders, support the delivery of Rio Tinto’s long-term strategy, and attract and retain strong leadership in a competitive global market,” — Ben Wyatt, remuneration committee chair

Rio Tinto proposes 56% rise in CEO Simon Trott’s target pay to £9.8 million - report

• “As long as it is aligned with shareholders, I’m quite happy,” — George Cheveley, portfolio manager at Rio Tinto shareholder Ninety One

Rio Tinto proposes 56% rise in CEO Simon Trott’s target pay to £9.8 million - report