The resources boom is not just confined to
commodity prices and takeovers of companies like WMC Resources. The
executive and management teams are doing very nicely as well, thank
you.

Take WMC Resources, the object of BHP Billiton’s
affections. The WMCR annual report, out today, shows that CEO Andrew
Michelmore enjoyed a 50% plus increase in salary and other benefits in
2004 compared to 2003.

While Michelmore appears to have received
between $2.5 and $2.509 million in 2003, the 2004 report shows total
remuneration of more than $3.9 million. He took $1.222 million in base
salary, a further $1.4 million in profit share and short term
incentives, $133,000 in super, $43,400 in non-monetary benefits, and
$1.12 million in shares – for the grand total of $3.92 million.

Alan
Dundas, the head of the company’s nickel business received a total of
$1.9 million, making him the second-highest paid person in the company.
CFO Bruce Brook got $1.67 million, and the head of uranium and copper
and boss of Olympic Dam Seamus French, received $1.566 million to come
in at number four on the pecking order. Given the importance of Olympic
Dam, that’s a bit of an oddity and may indicate how little WMC
Resources’ directors and senior management thought of the huge mine
before the takeover battle erupted.

Finally the annual report
also shows how little the board has invested in WMCR shares. Chairman
Tommy Bergman, who was paid $702,429 last year (including a base salary
of $330,000 and retirement benefits of $342,594) only owned 60,000
shares. Michelmore owns 401,982 shares, worth more than $3 million, so
he will have a CGT problem thanks to BHP-Billiton cash-only bid. Alan
Dundas owns 243,157, but the rest of the non-executive directors have
token holdings.

Perhaps that’s why they didn’t fight
BHP-Billiton and ‘The Don’ for a paper alternative to allow all the
other shareholders to rollover their CGT liabilities.

Peter Fray

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