Xstrata boss lands £4.6m

MINING giant Xstrata faces a shareholder backlash after paying chief executive Mick Davis a £3.6m bonus and revealing it wants to rewrite its incentive scheme to boost boardroom awards.

Xstrata's annual report today shows Davis bagged a total pay packet of £4.6m in 2004, more than double the previous year's, despite his failure to land Australian bid target WMC.

On top of a base salary of £900,000 and a housing allowance, Davis got his full bonus of £1.8m and a special bonus of £1.8m in recognition of the 'transformation of Xstrata's portfolio and repositioning in the mining sector'.

Xstrata's shares rose 66% last year and outperformed its peers. A spokeswoman said £1 invested in Xstrata when Davis joined in 2001 is now worth £2.80, against £2.12 for the mining sector as a whole, £1.21 for oil giant BP and £1.34 for Tesco.

Davis and finance director Trevor Reid are also cutting their 18-month contracts to one-year rolling deals. Xstrata revealed it wants to beef up the bonus structure to allow Davis 300% of his salary from this year if the full range of performance targets, such as return on capital, are met.