Rio Tinto wants to delay payment of a multimillion pound bonus to former chief executive Sam Walsh for a second time as US and UK authorities continue a bribery investigation related to a huge iron ore deposit in Guinea.
In March 2017 Rio said it would postpone cash and share payments owed to Mr Walsh under short and long term performance-based incentive plans.
That came after the miner alerted the Department of Justice and the UK’s Serious Fraud Office about a $10.5m payment made in 2011 to a French consultant working on the Simandou project. The company also fired two senior executives, arguing they had not met its code of conduct.
At the time of the payment Mr Walsh had been the head of Rio’s iron ore business. Leaked emails from the time — posted online in 2016 — showed Rio executives including Mr Walsh discussing the fee and the consultant’s “closeness” to Alpha Condé, Guinea’s president.
“Given investigations remain ongoing the board has asked Sam to agree to a further deferral until the investigations have concluded,” Rio said in a statement.
Mr Walsh declined to comment but has previously said he had always acted lawfully and in accordance with his duties during his time at Rio, and this “applies to the Simandou project”. Mr Walsh was appointed CEO in 2013 and retired three years later, just before Rio contacted the US and UK authorities.
Under the “deed of deferral” Mr Walsh agreed to have cash and share payments due under short and long term bonus schemes subdivided and assigned new trigger dates. As part of that agreement, Rio said it would tell Mr Walsh by the end of 2018 if he would receive the first half of his entitlements.
In the event that Mr Walsh does not agree to a further deferral, there is an arbitration process in place, according to people with knowledge of the agreement.
Rio has been involved in several fierce battles since it began exploring the Simandou deposit about 20 years ago. It lost half the rights to the project in 2008 and only managed to hold on to the remainder in 2011 through a $700m payment to the then new government of Mr Condé. The French consultant helped facilitate that deal, the leaked emails indicated.
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