March 14, 2020 / 7:37 PM / 17 days ago

Brazil's Vale adds sustainability goals to long-term compensation

SAO PAULO, March 14 (Reuters) - Brazilian miner Vale SA has included environmental, social and governance goals to the long-term variable compensation of its top management and resumed 2019 bonus payments, according to a securities filing on Saturday.

The move comes as Vale’s reputation was hurt after its tailings dam at Brumadinho burst in January last year, killing more than 270 people in the Brazilian state of Minas Gerais.

Health, safety and sustainability targets will respond to 20% of the long-term variable compensation, while the remaining part will depend on Vale’s total shareholder return compared to its peers, starting this year, the company said.

Until last year, long-term compensation was entirely based on shareholder return, although short-term bonuses already included sustainability goals.

Vale also said it resumed payments of variable compensation for employees who are not under investigation of the Brumadinho disaster. The company had canceled 2019 variable compensation after it experienced the second deadly dam burst over a four-year period.

“2019 was Vale’s most challenging year. Leadership and employees showed resilience amid all difficulties,” the company said in the filing, justifying its decision to resume variable compensation.

Vale paid its employees 77.2 million reais in variable compensation for their performance in 2019, 42% down from 2018.

The miner is proposing to its shareholders to merge Ferrous Resources do Brasil, which it acquired in August, with Mineração Jacuípe SA, aiming to cut costs.

Reporting by Carolina Mandl Editing by Chizu Nomiyama

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