Published November 28, 2012
SYDNEY – BHP Billiton said it is looking outside the company and using external advisers to help with succession plans for its chief executive, following reports the world's biggest miner was preparing for changes at the top.
BHP Chairman Jac Nasser told the company's Australian annual general meeting on Thursday that planning for a successor to CEO Marius Kloppers had started the day he was appointed and the process was ongoing.
"As part of the executive development process we identify high potential people at various levels both inside and outside the company on an ongoing basis," Nasser said.
"We use our own human resources people and we also use external advisers."
Kloppers oversaw phenomenal growth during the final boom years of the last decade and, despite failing to complete at least three major deals, won plaudits from investors for reining in costs and maintaining shareholder payouts.
The company has not said when it expected the 50-year-old South African to leave, but identified succession planning for all its senior executives as a top priority following a report that a search for a replacement had begun.
Four internal candidates are seen as frontrunners for the job: petroleum division chief Mike Yeager, aluminum and nickel chief Alberto Calderon, nonferrous chief Andrew Mackenzie and iron ore head Marcus Randolph.
BHP could face stiff competition in any external hunt from Anglo American , which is also searching for a new chief executive after dropping Cynthia Carroll.
Under BHP's dual Australian-United Kingdom stock listings, BHP's headquarters must be in Australia, and its chief executive must spend 51 percent of his or her time in the country, further limiting the field.
"Everything is possible, but a replacement for Marius won't be easy," said a investment fund manager who has had contact with the chief executive over some of his biggest deals.
"He is regarded as one of businesses' best managers, the one who very aptly steered BHP through the financial crisis."
Kloppers faced criticism for failing to clinch three major bids he launched -- a full takeover of rival Rio Tinto , a merger with Rio Tinto's iron ore business and a bid for Canada's Potash Corp -- and then splashing $17 billion on two shale gas takeovers in the United States just before gas prices slumped.
He gave up his bonus this year after BHP took a $2.8 billion charge on the value of its shale gas assets.
An early exit would spare Kloppers the task of overseeing a prolonged period of cascading profits. Based on estimates, BHP's profit is not expected to get back to the high of 2011 for at least another five years.
In 2012/13, BHP's bottom line is tipped to tumble by some $4 billion to just under $15 billion on the back of sagging minerals prices.
Kloppers' longevity is also under threat from a marked shift mandated by Nasser away from revenue generation to the cost line.
This was made evident by board decisions this year to suspend expansions in copper mining at Olympic Dam and iron ore via the now-stalled development plan at Port Hedland's outer harbor.
(Reporting by James Regan; Editing by John Mair)