Bonuses paid to chief executive officers at Canadian mining companies have fallen 31 percent to C$370,000 ($381,000) this year after a slowdown in commodity demand, according to a survey by Coopers Consulting Ltd. and PricewaterhouseCoopers LLP.
While the average base salary among 78 CEOs rose 0.8 percent to C$490,000 this year, total compensation is down 7 percent to C$767,000, Coopers and PwC said today in a statement.
Mining company boards, under pressure from investors, have refined the performance criteria for CEO compensation in the last few years, Lou Vujanich, principal at Coopers Consulting in Vancouver, said in an interview. Softening commodity demand and prices have curbed profitability and market values, Michael Cinnamond, a senior partner in PwC’s mining practice in Vancouver, said in the statement.
Total pay has declined even as incentives rise, Vujanich said. CEO base salaries will probably stay flat in 2013 while cash bonus payments will decline, he said.
“We’ve been seeing those targets go up but the actual amounts that they are getting have been going down,” he said.
New graduate mining engineers can expect a starting salary of about C$70,000, increasing to about C$76,000 for new hires with one to two years’ experience, according to the survey.
Companies are also offering incentive plans to a wider group of workers in a bid to attract talent, Vujanich said.
Vujanich said he doesn’t see an easing in the shortage of skilled workers in the mining industry, despite economic uncertainty and projects being delayed or shelved.
“There’s certainly a slowdown, but it’s nowhere near as dramatic as we’ve seen in other cycles,” he said. “All the studies that we’ve seen suggest that the shortfall or the shortage of workers in the mining industry is still going to be a factor for years.”
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