Diversified miner Rio Tinto will pay former CEO Sam Walsh a reported A$6.8-million in deferred payments, as investigations around payments to consultants at the Simandou iron-ore project, in Guinea, continue.
Walsh, who was CEO of Rio at the time the $10.5-million payments were made in 2011, had initially reached an agreement with Rio to defer incentive plan awards.
The deferred incentive plan awards would have vested up to 2021, and would have been subject to a staged deferral.
However, Rio said this week that while it felt a further deferral of the amounts that were payable in December 2018 was appropriate given that the regulatory investigations in relation to the Simandou matter were ongoing, the parties could not agree to extend the deed of deferral.
Following the completion of an independent confidential and binding dispute resolution process, a determination was made that, under the terms of the deed, Walsh’s incentive plan awards should not be subject to any further deferrals and are payable, Rio told shareholders.
As a result, payments will be made to Walsh of all deferred incentive plan awards which would have been payable on December 31, along with associated dividends and interest.
“When the deferral agreement was entered into, both Rio Tinto and Sam hoped that the Simandou regulatory investigations would have been completed by now.
“The Rio Tinto board made a determination, pursuant to the deferral agreement, to further defer the awards as the regulatory investigation remains open. Following the completion of the confidential and binding dispute resolution process, a decision was made that the amounts should be paid,” said Rio chairperson Simon Thompson.