Reflecting a more bullish commodities market over the past year, Canadian mining CEOs saw their cash bonus payouts rise from 61% of salary in 2009 to 88% of their salary in 2010, according to a salary survey by Coopers Consulting Ltd. and PricewaterhouseCoopers (PwC).

However, the 2010 average annual base pay of Canadian mining CEOs at $480,000 showed little change from the comparable figure reported in 2009.

The survey also shows that:

– the average total cash compensation package (annual base salary plus cash bonus) in 2010 was $840,000 (compared to $670,000 in 2009);

– the average actual cash bonus payout in 2010 was $540,000, compared to $303,000 in 2009;

– 95% of Canadian mining CEOs were eligible for short-term incentive compensation (i.e. an annual cash bonus), but of the 62 participating companies, only 45 (69%) reported payouts;

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

“Over the past three years we have seen a roller coaster ride in terms of CEO bonus compensation in the mining industry. In 2008, the average bonus paid to CEOs was 79%, it decreased to 61% in 2009 and has now bounced back and then some, to 88% in 2010,” says Lou Vujanich, survey leader and principal of Coopers Consulting.

“In 2009 the lower number of bonuses and smaller size of the bonuses reflected the fact that actual performance of many of the companies did not hit the target levels required for larger bonus payouts. However, we are now seeing some dramatic swings back in bonus compensation that demonstrate a new confidence in commodity pricing and profitability,” adds Len Boggio, survey report contributor and senior partner in PwC’s mining practice.

The Coopers – PwC survey this year covers 44 typical corporate mining offices positions, 58 salaried mine site positions and 14 field exploration positions. The 2010 salary survey database contains information on 15,980 employees – 6,836 from Canada and 9,144 from the U.S. Data is provided for 65 mining company CEOs. In total 290 North American mine sites are represented in the 2010 update (110 in Canada and 180 in the United States).

The survey indicates that salaried mine site staff in western Canada are generally better paid than their eastern Canadian counterparts. Results also show that salaried mine staff in coal, industrial and other minerals operations are generally paid more than the other commodity groups while base metal mining in general, sees smaller paycheques across the board.

For Canadian mine site staff, over 80% of salaried positions are eligible for some form of short-term incentive plan, an increase of 21% since 2002 (59%). The average such bonus paid (across all mine site salaried staff positions) was 14%, compared to 15% in 2009, 17% in 2008, 16% in 2007 and 13% in 2006.

The report notes that while short-term incentive plans have traditionally been reserved for senior mine site based positions, more salaried staff positions are receiving this type of compensation. “This indicates a change in the compensation philosophies of Canadian-based mining companies to ensure the competitiveness of their plans,” says Boggio.