(Corrects to remove reference to Xstrata in paragraph 14.)
* BHP says turning every stone in CEO succession strategy
* Chairman credits CEO Kloppers with guiding BHP through
global financial crisis
* Kloppers oversaw phenomenal growth but now faces tougher
* Internally four candidates seen as frontrunners
By James Regan
SYDNEY, Nov 29 BHP Billiton
said it is looking inside and outside the company as well as
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.
Chairman Jac Nasser told BHP's Australian annual general
meeting on Thursday that planning for a successor to CEO Marius
Kloppers had started the day he was appointed and was ongoing.
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.
But BHP now faces a sharp drop in profits as it battles a
tougher environment after a slowdown in top customer China has
knocked commodities prices.
"If he is replaced, I only hope they choose someone from
inside and not someone that parachutes in, because we need a CEO
that understands this company," said Ian Mancovitch, a BHP
shareholder attending the meeting in Sydney.
"Sure, Marius Kloppers is yesterday's man, but that doesn't
mean he isn't needed anymore, he proved that during the global
fiancial crisis," he added.
Internally, four candidates are seen as frontrunners for the
job: petroleum division chief Mike Yeager, aluminium and nickel
chief Alberto Calderon, nonferrous chief Andrew Mackenzie and
iron ore head Marcus Randolph.
"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, adding BHP used
its own human resources people and external advisers.
Nasser praised Kloppers for his leadership during the
"This sort of performance doesn't happen by accident,"
Nasser said. "It is a credit to every one of our 100,000 people
led by Marius and his team," Nasser said.
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.
An analyst at a fund manager, who asked not be named, played
down the impact on Kloppers' position of the talk of succession
as a normal part of a company's leadership transition.
"One of the benefits that BHP has is it has great depth of
senior management, whereas you couldn't make the same comment
about some of the smaller companies in the market."
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 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 sliding 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 due to lower minerals prices.
Kloppers' longevity is also under threat from a marked shift
mandated by Nasser away from revenue generation to cost control.
This was made evident by board decisions this year to
suspend expansions in copper at Olympic Dam and iron ore via the
now-stalled development plan at Port Hedland's outer harbour.
For his part, Kloppers told the meeting that BHP was in a
strong financial position.
"This despite the challenges of higher capital and operating
costs, stronger producer currencies and more regulation as well
as volatility in commodity prices," Kloppers said.
As an 18-year-old conscript in the South African army,
Kloppers reportedly carried his ailing German Shepherd tracker
dog through the Angolan desert rather than let it die.
In his business career, he has also tried to beat the odds,
especially when mounting takeovers, such as when he took on
international regulators -- and some of his own major customers
-- in launching the hostile bid for Rio Tinto in 2008.
He later dumped the deal, partly due to anti-trust concerns
and the global financial crisis.
BHP went back for another try, lining up an iron ore joint
venture with Rio Tinto that would have yielded $10 billion in
savings. That deal had to be pulled after regulators blocked it.
Undaunted, Kloppers turned his sights on Potash Corp, the
world's largest fertiliser-maker, but there too he was thwarted,
this time by the Canadian government.
Nonetheless, some shareholders may be thankful.
Before his tenure, BHP squandered billions of dollars in
past decades by making disastrous forays into U.S. copper mining
and by betting on new-fangled ways to make nickel and iron ore.
(Additional reporting by Sonali Paul in MELBOURNE; Editing by