BHP Corp will reduce employee incentive bonuses globally by 20% - report.

The world's largest mining company BHP (ASX, LON, NYSE: BHP), according to the Australian Financial Review, reported on Thursday that it will reduce short-term incentives for all employees by 20% for the 2023-24 fiscal year.

According to sources cited by the AFR, this move is due to BHP's failure to achieve internal performance targets.

According to the same article, BHP management attributes this action to departments that failed to achieve cost and production targets, as well as the incident in January where a worker's life was lost at the Saraji coal mine in Queensland.

"Some BHP employees are unsettled by the reduction in incentives, and have pointed out to the Australian Financial Review that employment freezes in some departments are affecting the ability to achieve goals, which are seen as unrealistic internal targets."

This is not the first time BHP has cut employee incentives worldwide. In 2019, they reduced incentives by 20% due to various operational disasters such as the train derailment in Western Australia in November 2018 and a fatal accident at the same Saraji coal mine a month later.

At the time, then-CEO Andrew Mackenzie, in addition to other issues such as equipment failures at the Olympic Dam in South Australia and the Escondida coal mine in Chile, saw his annual salary shrink to almost a quarter by the end of 2019.

Last year, CEO Mike Henry promised to strengthen safety measures in all operations following several more fatal accidents.

In February, BHP reported that its first-half profits were impacted by $2.5 billion in impairment charges related to the nickel business in Western Australia and $3.2 billion in payments related to the Samarco dam accident in Brazil. As part of cost-cutting measures, the company revealed plans to disband some of the global corporate teams.