Embattled Bluescope Steel has again hit back at criticism for paying $3 million in cash bonuses to executives, which were partly a reward for restructuring that led to the sacking of 1,000 workers.
The chairman of Australia’s biggest steel maker, Graham Kraehe, used the annual report released on Friday to defend the bonuses.
Last month, Independent Nick Xenophon exposed the payments, describing them as “obscene” a day after the company reported overseeing a more than $1 billion loss and the job cuts as it shut down its export business.
Mr Kraehe described the comments made by critics of the bonuses, including Australian Workers Union boss Paul Howes, as “ill-informed” in his message to shareholders on Friday, two days after the share price closed at a record low 66 cents.
On Friday, Bluescope shares gained 3.5 cents, or 5.2 per cent, to close at 70.5 cents. The stock has fallen by 69 per cent this year, and has lost 92 per cent of its value since chief executive Paul O’Malley took the leadership of the company in November 2007.
The annual report shows that Bluescope Steel paid $3,051,813 in short-term incentives to what it termed 11 “key management personnel” executives.
Chief executive Paul O’Malley’s share of the $3 million was $720,865 on top of base pay of more than $1.75 million, excluding superannuation and share rights.
The cash bonus of nearly $721,000 was not related to financial outcomes, but “strong leadership”, Mr Kraehe said.
That leadership had produced cost reductions and included “driving the initiatives to restructure the Australian business”, he said.
Other achievements were a “pragmatic solution” to the carbon tax – including free pollution permits – and growing its pre-engineered steel buildings and Asian business.
The job losses affected NSW and Victorian workers, with BlueScope saying it was exiting steel exporting due to a combination of raw material costs, low steel prices, low domestic demand and a record high Australian dollar.
Workers are hoping they will pick up jobs in industrial and resources projects, due to the mining boom.
Mr Kraehe said in his letter that shutting down steel exporting would produce a $225 million improvement in earnings before interest and tax.
The company’s shares have plunged more than 70 per cent since February, when they were trading at $2.37, with the company recently pushed out of the top 50 listed stocks.
