BHP chief executive Andrew Mackenzie will step down from the mining giant's top job next month and be replaced by the company's head of Australian operations, Mike Henry.
The world's biggest miner made the announcement on Thursday morning, ending months of speculation over who would be appointed to succeed Mr Mackenzie, who has been in the role for more than six years.
"Mike Henry’s deep operational and commercial experience, developed in a global career spanning the Americas, Europe, Asia and Australia, is the perfect mix for our next CEO," BHP chairman Ken MacKenzie said in a statement to the ASX.
"I am confident his discipline and focus will deliver a culture of high performance and returns for BHP."
The role at the helm of BHP is considered one of the most important jobs in corporate Australia. Along with half a million direct shareholders, an estimated one in three Australians has an interest in BHP through their superannuation funds. BHP also has a huge influence on the strength of the economy and the federal budget as its commodities such as coal and iron ore rank among the nation's top exports. And BHP is one of Australia's top taxpayers, paying some $10 billion into government coffers in the past financial year.
Mr Henry and BHP's chief financial officer, Peter Beaven, were widely considered among investors and company insiders to be the two top internal candidates for the position. The Age and The Sydney Morning Herald in September cited sources close to BHP's management as saying that Mr Beaven had withdrawn as a contender, although BHP declined to comment at the time.
Mr Henry, 53, will assume the role from January 1. He will receive a base salary of $US1.7 million ($2.5 million), with a potential short-term cash and stock bonus of up to 80 per cent of his base and a long-term incentive of up to 200 per cent, subject to shareholder approval.
Mr Henry said he was honoured by his appointment and was eager to drive value for the company's investors and wider society.
"We will unlock even greater value from our ore bodies and petroleum basins by enabling our people with the capability, data and technology to innovate and improve," Mr Henry said.
"We must operate safely, with discipline, and reduce our impact on the environment. With the right people and the right culture we will deliver value and strong returns for shareholders and for all of society."
'Privilege' to serve
Mr Mackenzie will step down at the end of December before retiring from the company on June 30 next year. He said on Thursday it had been a "privilege" to serve as the mining giant's CEO.
"Our products are essential to global economic development and we deliver them in a way that creates significant value for our shareholders, our employees, communities, nations and the world," he said.
"Fresh leadership will deliver an acceleration in the enormous potential for value and returns that will come from BHP’s next wave of transformation."
Choosing the right time to retire had "not been an easy decision", Mr Mackenzie said.
"However, the company is in a good position," he said. "I am confident Mike and BHP will seize the many opportunities that lie ahead."
BHP shares dropped 36 cents, or 1 per cent, to $36.42 as of 10:07 am in Sydney, with the ASX benchmark S&P/ASX 200 down 0.1 per cent.
Although BHP is known to prefer promoting one of its own executives to the top job, company insiders confirmed potential external candidates had also been considered.
Mr Henry, who joined BHP in 2003, has 30 years experience in the mining and petroleum industry, spanning operational, commercial, safety, technology and marketing. He was appointed to his current role of Australian minerals operations president in 2016, and has been a member of the global miner's executive leadership team since 2011, BHP said.
BHP chairman Ken MacKenzie thanked Andrew Mackenzie for his "outstanding contribution".
"Under his leadership, BHP has transformed into a simpler and more productive company, financially strong and sharply focused on value for shareholders," he said.
This story originally appeared in the Sydney Morning Herald. Read the original story here.