# BHP Group appoint Mike Henry as Chief Executive Officer

- Link: https://www.directorstalkinterviews.com/bhp-group-appoint-mike-henry-as-chief-executive-officer/412798042
- Published: 2019-11-14T07:29:17+00:00
- Author: Amilia Stone

The Board of **BHP Group** (LON:BHP) has announced that Mike Henry has been appointed
Chief Executive Officer of BHP, following a thorough succession process.

Mr Henry will assume the role of CEO and Executive Director effective 1 January 
2020, replacing Andrew Mackenzie who will retire as CEO on 31 December 2019.

Mr Henry has 30 years’ experience in the global mining and petroleum industry, spanning
operational, commercial, safety, technology and marketing roles. He was appointed
to his current role of President Operations Minerals Australia in 2016, and has 
been a member of the Executive Leadership Team since 2011.

Mr Henry joined BHP in 2003, initially in business development and then in marketing
and trading of a range of mineral and petroleum commodities based in The Hague, 
where he was also accountable for BHP’s ocean freight operations. He went on to 
hold various positions in the Company, including President Coal, President HSE, 
Marketing and Technology, and Chief Marketing Officer. Prior to joining BHP, Mr 
Henry worked in the resources industry in Canada, Japan and Australia.

> **Outgoing CEO Andrew Mackenzie said**: “It has been a privilege to serve as CEO
> of BHP. Our products are essential to global economic development and we deliver
> them in a way that creates significant value, for our shareholders, our employees,
> communities, nations and the world. BHP is in a good position. We have a simple
> portfolio, a strong balance sheet and options to grow value and returns for decades
> to come.
> “Fresh leadership will deliver an acceleration in the enormous potential for value
> and returns that will come from BHP’s next wave of transformation. Choosing the
> right time to retire has not been an easy decision, however the Company is in 
> a good position. I am confident Mike and BHP will seize the many opportunities
> that lie ahead.”

> **CEO-Elect Mike Henry, said**: “I am honoured and privileged to be appointed 
> as CEO and to have the opportunity to lead the talented and hard-working people
> who make BHP a great company. For more than 130 years, through the ingenuity and
> commitment of its people, BHP has delivered shareholder value while successfully
> adapting its portfolio, operations and products. Today we are even safer, more
> predictable and more focused.
> “We will unlock even greater value from our ore bodies and petroleum basins by
> enabling our people with the capability, data and technology to innovate and improve.
> We must operate safely, with discipline and reduce our impact on the environment.
> With the right people and the right culture we will deliver value and strong returns
> for shareholders and for all of society.”

**Remuneration**

Mike Henry’s employment contract will be effective from 1 January 2020.

BHP Chairman Ken MacKenzie said: “This remuneration package is designed to motivate
a high level of performance, and align with our shareholders’ expectations and community
views. The package is consistent with that applied for Andrew Mackenzie and the 
remuneration policy approved by shareholders at BHP’s 2019 Annual General Meetings(**
AGMs**). It is broadly consistent with other roles in global companies with similar
global complexity, size and reach, and is reflective of the CEO’s significant responsibilities.
A high proportion of actual remuneration received will be directly dependent on 
performance, with 75 per cent of total target remuneration represented by incentive
plans, and only 25 per cent in fixed pay.”

The key components of Mr Henry’s remuneration are:

–     A base salary of US$1,700,000 per annum;

–     A pension contribution of 10 per cent of base salary;

–     A Cash and Deferred Plan (**CDP**) target cash award opportunity of 80 per
cent of base salary, with two tranches of deferred shares to be awarded, each to
the equivalent value of the actual cash bonus received, vesting in two and five 
years respectively (the maximum CDP award is 1.5 times the target award); and

–     A Long Term Incentive Plan (**LTIP**) award of 200 per cent face value of 
base salary (subject to shareholder approval).

Andrew Mackenzie will step down as CEO, a member of the Executive Leadership Team
and an Executive Director of the Company on 31 December 2019, and will retire from
the Group on 30 June 2020. Mr Mackenzie will work through the applicable notice 
period and accordingly no severance payment will be made. He will receive his base
salary and pension entitlement to the date of his retirement.

In conjunction with our new remuneration policy recently approved by shareholders,
BHP introduced a requirement effective 1 July 2020 for the CEO to continue to hold
their BHP shares for two years beyond retirement. While this requirement is not 
technically applicable to Mr Mackenzie as he will retire on 30 June 2020, to demonstrate
his commitment to and confidence in BHP’s future success, Mr Mackenzie has voluntarily
committed to comply with this post-retirement shareholding requirement.

Mr Mackenzie’s remuneration will be in accordance with shareholder-approved arrangements.
In summary:

–    Any incentive payment under the CDP for FY2020 can only be assessed by the 
Remuneration Committee at the end of the financial year;

–    That payment will be pro-rated to reflect his period of service as CEO during
FY2020 (namely, 1 July 2019 to 31 December 2019);

–    Awards granted in previous years under the LTIP will be pro-rated in accordance
with the Company’s usual practice. They will vest only if the performance hurdle
is met at the end of each five-year performance period; and

–    Mr Mackenzie will be entitled to the value of the pension and superannuation
funds that he has accumulated over his years of service with the Company.

Summaries of the key terms of Mr Henry’s employment contract and Mr Mackenzie’s 
retirement arrangements are set out in the attached schedules.

Further information on BHP can be found at: [bhp.com](http://www.bhp.com/)

**Appendix 1**

**Mike Henry biography**

Mike Henry has been President Operations, Minerals Australia since February 2016.
He has been a member of the Executive Leadership Team since 2011. In his current
capacity, Mr Henry is responsible for BHP’s iron ore, coal, copper and nickel assets
in Australia, leading nearly 40,000 people across six assets, with revenues of US
$29 billion, EBITDA of US$16 billion and capital spend of US$3 billion.

Under his leadership, there has been a 60% reduction in the frequency of high potential
injuries in Minerals Australia. BHP has become the lowest cost major iron ore producer
in the world. A turnaround of Nickel West led to the decision to return the business
to core in the BHP portfolio. He has delivered major capital projects, including
South Flank, at half the capital intensity of prior major projects in West Australian
Iron Ore, and has implemented BHP’s first full-scale autonomous haulage system at
Jimblebar.

In his current capacity, Mr Henry has designed and implemented a BHP-wide operating
system and the Maintenance and Engineering Centre of Excellence, which has delivered
material cost savings and improved uptime across key classes of equipment. He has
established a new employment model and approach to skills building in Australia 
through Operations Services. Mr Henry is a committed advocate for the industry and,
in 2018, was part of the Federal Government’s Resources 2030 Taskforce.

Mr Henry is a champion of diversity. Over the past three years under his leadership,
BHP’s Minerals Australia business has nearly doubled its number of female employees,
and increased indigenous employment from 4.1 to 5 per cent.

Mr Henry has previously held roles accountable for health, safety and environment,
technology, capital projects, supply, logistics and marketing and trading. His 30-
year resources career has spanned four continents and all of BHP’s commodities. 
He has led teams in 18 countries.

Mr Henry is Vice Chair of the Minerals Council of Australia.

He was born in Canada, holds a Bachelor of Science (Chemistry) from the University
of British Columbia and lives in Melbourne with his wife of 30 years. He and his
wife have two adult daughters who live in Canada.

**Career history**

2016 – present    President Operations, Minerals Australia

2015 – 2016        President, Coal

2013 – 2015        President, HSE, Marketing and Technology

2011 – 2013        Chief Marketing Officer

2010 – 2011        President, Marketing

2009 – 2010        Marketing Director, Petroleum

2006 – 2009        Marketing Director, Energy and Freight

2005 – 2006        Vice President, Energy Coal Marketing

2003 – 2004        Vice President, Energy Coal Business Development

2001 – 2003        Vice President, Business Development, BMA (secondment)

1990 – 2001        Mitsubishi Corporation

> **Chairman Ken MacKenzie said: **“Mike Henry’s deep operational and commercial
> experience, developed in a global career spanning the Americas, Europe, Asia and
> Australia, is the perfect mix for our next CEO. I am confident his discipline 
> and focus will deliver a culture of high performance and returns for BHP Group.
> Mike has been a strong advocate for the industry, driving higher standards of 
> safety and a commitment to our local communities and global stakeholders.
> “We would like to recognise the outstanding contribution of Andrew Mackenzie to
> BHP as CEO. Under his leadership, BHP has transformed into a simpler and more 
> productive company, financially strong and sharply focused on value for shareholders.
> We thank him for his vision and hard work, which has changed the way we operate
> and engage with the world.”

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