Every door at Rio Tinto used to be wide open to Sam Walsh. But when the former Rio Tinto chief executive and his lawyers checked in with his erstwhile dominion to find out what the board found so disturbing in the erupting Simandou email scandal, he was told: “Read the newspapers, Sam.”
Walsh is said to be befuddled and insulted by the lack of professional courtesy offered by his former employer through their time of shared crisis and thoroughly mystified by the logic that had the Rio Tinto board force a “deed of deferral” on the present and future benefits Walsh is owed by the company.
The deed, revealed in Rio Tinto’s annual report, puts a two-step delay on Walsh owning the full weight of deferred shares awarded under short and long-term incentive plans that would be worth about $20 million at current prices.
The Rio Tinto board willing, Walsh will get half of his short and long-term entitlements on December 31 next year and the balance on December 31, 2020. If it is unwilling, Walsh will lose the equivalent to his earnings over his final two years at Rio.
The chairman of Rio Tinto’s remuneration committee, former Barclays Bank chief executive John Varley, wrote in the annual report that it would be “inappropriate” to exercise the board’s discretion one way or the other on the Walsh shares before the results of three external investigations into the circumstances that had the miner pay $US10.5 million to the consultant who helped re-secure two long mining tenements in Guinea.
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