-- BHP says hunt for the next chief executive ongoing
-- Spokesperson declines to comment on time frame
(Adds investment adviser comment from ninth paragraph; details
throughout.)
By Rhiannon Hoyle
SYDNEY-BHP Billiton Ltd. (BHP) said Wednesday that it is
planning for a successor to its chief executive, Marius Kloppers,
but the mining giant gave no timeline for when this change may
happen.
A spokesperson for the company in Australia said the hunt for a
replacement for Mr. Kloppers was "an ongoing process," describing
it as "one of the most critical tasks of any board."
Investors have urged BHP, the world's largest mining company by
market value, to articulate a succession plan as Mr. Kloppers
enters his sixth year as chief executive. But his tenure at the
head of the company has been complicated by a sharp fall in
industrial commodity prices, which prompted the company into
shelving several mine expansions and developments valued at about
US$50 billion.
"BHP Billiton's board has always ensured that it has a
well-integrated, continual succession process in place for our most
senior executives," the BHP Billiton spokesperson said in an
emailed statement. "This well-established planning process has
worked effectively for many years and delivered a track record of
smooth succession at the group management committee level," the
person added.
The response from BHP follows a report in the Financial Times
newspaper that the company was actively seeking to replace Mr.
Kloppers within a year to two years.
The spokesperson from BHP declined to comment on the time frame
for replacing Mr. Kloppers.
South Africa-born Mr. Kloppers assumed the role of chief
executive in October 2007, succeeding Charles "Chip" Goodyear. He
had previously been president of the company's nonferrous materials
division, and from the formation of BHP Billiton in 2001 was chief
marketing officer and chief commercial officer.
But Mr. Kloppers has attracted criticism from some investors, in
particular for not returning what they said was enough cash to
shareholders during the commodity price boom and instead pushing
ahead with acquisitions, several of which were derailed. Although
publicly backing Mr. Kloppers, 50, as chief executive, Chairman
Jacques Nasser recently said the board gives a lot of thought to
succession. He hasn't commented on possible contenders for the job,
though.
"The process is something that needs to be well flagged to the
market, but I imagine there won't be any serious talk about likely
successors and the timing of that until we see a recovery in
commodity prices," says RBS Morgans investment adviser Christopher
Macdonald. BHP's shares recently up 0.2% at 34.88 Australian
dollars (US$36.39) a share.
Less than two months ago, Chairman Mr. Nasser had praised the
chief executive's record and said that he and the senior management
team were suited to guiding the company through tough times as
mining companies are forced to retrench.
"We are very fortunate to have Marius as the chief executive of
the company. He has been there for five years, and they've been
five very, very successful years," said Mr. Nasser.
Still, analysts say this is a perilous time for the chief
executives of major mining companies, whose stock values have been
plummeting along with commodity prices.
"Any leader of a natural resource company whose stock has fallen
is going to be in trouble," says Charles Bradford, an analyst with
Bradford Research Inc. "But BHP, and Kloppers, is looking better
than most, thanks in part to its exposure to oil."
BHP's stock is down 30% compared to its peak in the spring of
2011, slightly below the falls registered by other mining firms.
Anglo American PLC (AAL.LN), whose CEO Cynthia Carroll resigned
almost two weeks ago under shareholder pressure, has seen its share
price drop over 40% from its 2011 summit.
- John W. Miller, David Rogers and Robb M. Stewart contributed
to this article.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
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