Junior explorers pay up for CEOs

Pay cuts, some up to 50 per cent, were the order of the day in the Business News quarterly CEO salary survey, but not all companies have been on trend.

Kogi Iron and Alara Resources are small companies with big aspirations, and it’s these grand plans that seem to have determined the salaries for their new chief executives.

As junior exploration companies, Kogi and Alara have agreed to pay substantially more than many of their peers, presumably in the hope their new chief executives will deliver rapid progress on planned mining projects.

Kogi recruited former Galaxy Resources boss Iggy Tan in August and has agreed to pay him a package worth $490,000 per annum.

That includes an unusually large motor vehicle allowance of $40,385 per year.

With that kind of money, Mr Tan should be able to get a nice set of wheels in both Perth and Nigeria, where Kogi is planning to undertake a scoping study on its Agbaja iron ore project.

Mr Tan’s salary puts him on a par with Saracen Mineral Holdings’ recently appointed chief executive Raleigh Finlayson, who earns $485,000/year (after taking a 3 per cent pay cut).

To put this in perspective, Saracen is an established gold producer with a market capitalisation of about $130 million, more than eight times Kogi’s market cap.

It’s a similar story at Alara Resources, where new chief executive Phillip Hopkins is being paid a salary of $400,000, plus a travel allowance of up to $25,000/year.

He also has potential to earn a short-term bonus of up to $200,000 if construction of Alara’s zinc-copper project in Saudi Arabia starts before May next year.

Mr Hopkins’ new salary package is the same as that of Gryphon Minerals’ long-serving chief executive Steve Parsons, who recently took a 20 per cent pay cut.

In addition, Mr Parsons has agreed to waive half of his $650,000 annual bonus and defer the balance until the company achieves its first gold pour at the Banfora project in Burkina Faso.

Gryphon was one of many listed companies to announce big salary cuts during the September quarter, along with other measures to preserve cash.

Kula Gold’s Stuart Pether took a 40 per cent salary cut, but Thundelarra’s Tony Lofthouse went even further.

The former stockbroker took a 10 per cent pay cut last year and a further 44 per cent cut this year, making for a total reduction of 50 per cent (on his original salary) since he joined the company in April last year.

Queste Communications’ Farooq Khan matched this with a 50 per cent cut of his own.

Paladin Energy’s John Borshoff remains one of the state’s highest paid chief executives, with an annual salary of $1.38 million, despite accepting two pay cuts during the past two years

Peninsula Energy executive chairman Gus Simpson has agreed to take 40 per cent of his remuneration as shares, while Energia Minerals chief executive Kim Robinson will take 20 per cent of his salary as shares.