Jan 18, 2013

Takeover gone bad: how Tom, Rio got in over their heads

There was a US$14 billion bounty on Tom Albanese after Rio Tinto was forced to writedown the value in its operations. The CEO and his board stand condemned for getting in over their heads.

Glenn Dyer — <em>Crikey</em> business and media commentator

Glenn Dyer

Crikey business and media commentator

Tom Albanese

Few major global companies can be said to have destroyed so much real, cash value as Rio Tinto has managed to do in the last five years. There were 14 billion reasons why Tom Albanese had to go.


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4 thoughts on “Takeover gone bad: how Tom, Rio got in over their heads

  1. Daly

    What will the Oz write about this? If a government did this they would be hounded but because one of the world’s big three miners does it and penalises all our super funds as the shares drop in value, it will be a one day wonder. After all the private sector makes good business decisions, doesn’t it?

  2. Mike Flanagan

    Yes, solidified elctricity was always going to be a contentious and dubious investment with climate change.
    Senior echelons of his management team would undoubtly had acturial and other reports on their desks. Perhaps their neo conservative commitments never allowed them to read these reports and others.

  3. klewso

    Did I hear, on the ABC news this am, that Albanese was denied his this year’s “bonus”? So how much did he make last year – and how much of that would be left?
    Then an “expert” was asked was his successor a good choice? …. What, like Albanese, at the time of his ascension?

    I like these sort of stories, to refelect on what our politicians “could be earning out there in Private-industryland” – as justification for pay rises, as if these executives are earning what they’re worth.

    [See Kath Walters later piece about “Crazy John’s” maladministration.
    Then there’s those bonuses to executives of underperforming media empires, treating underrepresented investor’s money like they were playing Monopoly?]

  4. MJPC

    Thank you for this insightful article. How is it that Albanese could survive a debacle where his decisions as CEO lost $14b? As I understand it he should have been sacked not ratained on the board.
    “Thankfully, regulators here and offshore vetoed the other great disaster that Rio could have found itself in”
    It that the same regiulators that the big end of town say they don’t need?
    Capitalism, don’t you love it.

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