Fortescue posts record profit, dividend but cuts management bonuses

Top executives will receive just 28% of what they could have gained in a long-term incentive plan, the world’s fourth-largest iron ore miner said. It cited community expectations around executive pay and noted its results were in part due to robust market pricing that was outside the control of management.

The much lower-than-expected bonus payments, which analysts described as unusual, will affect some 30 people. For some executives, it comes on top of cuts to a separate bonus scheme after a cost blowout and delays at Fortescue’s Iron Bridge magnetite project.

Fortescue posted an underlying net profit of $10.35 billion, up from $4.75 billion a year ago, and not far off a forecast compiled by Vuma of $10.41 billion. Its shares finished 6.6% higher.

It also declared it would become the first major supplier of green iron ore here and would unveil new targets for reducing emissions from its customers next month.

Asked about the bonus cuts, Chief Executive Elizabeth Gaines said top management were all shareholders and would also benefit that way.

Fortescue will pay a final dividend of A$2.11 per share, up from A$1 a share last year, taking its total dividend for the year to A$3.58 or A$11 billion ($8 billion).