Michael Pascoe writes:

If creativity and originality are the
things to look for at the top of the corporate tree, Rio Tinto must be the go
with the board mining rich revenue seams
that have been overlooked by more pedestrian firms. If they can do as much for
shareholders as they do for themselves, Rio’s resources boom will last forever.

What has sparked my admiration is a nugget
unearthed by the SMH‘s CBD column while noting that former Shell managing
director Paul Skinner is trousering a
neat US$1 million a year as Rio’s non-executive chairman. (Shell of course is
that Anglo/Dutch company that had a spot of bother over-stating its reserves by
20% – “over-stating” here being a euphemism for “lying”.)

CBD is on to nothing like the three billion quid meltdown
caused by Shell’s false accounting, but they’ve caught wind of a nice
little earner for the non-executive director class to work into their
next contract: “Jolly good the Pommy miner dolls [sic] out ‘hardship’
payments for long-haul flights in addition to the paltry base fees. For
flights
of more than 10 hours, directors get an allowance of $US7,330
($10,000). For
flights of 5-10 hours the allowance is halved.”

By my rough reckoning, that means Rio NEDs
are paid more to fly than the pilots sitting just a little way in front of them. It
also means the two Australian NEDs on the Rio board – Ashton Calvert and Sir Rod Eddington –
must be $20K in front for just flying to and from each board meeting in the Old
Dart.

Sir Rod should know what a good deal he’s
on compared with the pilots. Aside from being a massive fan of John Howard and
Rupert Murdoch, at one stage or another he ran Cathay Pacific, Ansett and British Airways. His former employees would
be delighted to know he’s now doing so well out of flying himself.

Ashton has come to the NED ranks from the
Australian public service, so he’s probably still pinching himself over the
generosity of shareholders compared with taxpayers. Mr Calvert was secretary of
the Department of Foreign Affairs and Trade when DFAT was in the business of
trusting AWB, so he too should bring to the Rio board valuable lessons learned from other
people’s mistakes.

Peter Fray

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