TORONTO – Bonus payments to Canadian mining CEOs have increased to an average of 88% of base salaries this year, compared with 61% in 2009, according to a report published on Thursday.

Bonus levels, which took a knock during the weaker commodities market in 2009, have even exceeded the 79% of salaries paid out in 2008, notes the study by Coopers Consulting and Pricewaterhouse Coopers.

"Over the past three years we have seen a roller coaster ride in terms of CEO bonus compensation in the mining industry," survey leader Lou Vujanich commented.

"These fluctuations in annual bonus payouts show the effect of companies placing a greater weighting on the variable components of the executive compensation package than they do on the fixed annual base pay component."

On the other hand, the average annual base pay of Canadian mining CEOs, at C$480 000, was little changed at C$480 000.

Altogether, the average total cash compensation package, including annual base salary plus cash bonus, was C$840 000, compared with C$670 000 in 2009.

The average actual cash bonus payout in 2010 was C$540 000, compared to C$303 000 in 2009.

Interestingly, 95% of Canadian mining CEOs were eligible for an annual cash bonus, but only 45 of the 62 participating companies (69%) reported payouts, Coopers and PwC said.

The highest reported cash incentive percentage amount was 434% of base pay, compared to 104% in 2009.

“We are now seeing some dramatic swings back in bonus compensation that demonstrate a new confidence in commodity pricing and profitability,” survey report contributor and PwC mining practice senior partner Len Boggio commented.

The report also noted a trend towards internal pay equity, or measuring a CEO's pay against other employees – typically other executive officers – Vujanich said/

Source:miningweekly