Our Nev cashes in

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Must be stressful running the marginal cost producer in iron ore markets:

Fortescue Metals Group chief executive Nev Power has been granted an 11.1 per cent pay rise, as the iron ore miner moves to reward the man who has overseen its near tripling in export volumes.

In a move that could inflame relations with unions that are fighting for pay rises for tugboat workers at Port Hedland, Fortescue said a review of its executive structures had determined that the company was no longer paying competitive wages to its executives.

Fortescue resolved to increase remuneration for executives by an average of 3.3 per cent to “realign with the market and increase retention opportunity”.

The 11.1 per cent improvement to Mr Power’s base wage was effective from July 1, 2014, and will see his base wage increase from $1.8 million to $2 million.

Actually, Nev’s been doing a very good job with a structurally rooted firm. So, unless you hold him responsible for said structural rootage, that probably qualifies him for an extra $200k, which raises FGM’s cost per tonne by about 0.4 of one cent.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.