Analysis

Marius Kloppers and BHP's priceless branding masterstroke

BHP Billiton chief executive, Marius Kloppers, advised the Big Australian’s remuneration committee that he does not want his bonus this year. It is no small sacrifice, given that Kloppers’ bonus last year -- US$4.7 million -- was more than twice his salary (US$2.1 million).

The sacrifice came last Friday, as BHP Billiton announced a $US3.3 billion write-down of American shale gas and Western Australian nickel assets.

Cynics might say that Kloppers hardly needs the extra cash after five years in the top job, but personal branding experts say that Kloppers’ move is the kind of personal and corporate branding that money cannot buy.

Kloppers’ announcement takes advantage of his impact on market confidence as the public face of the company, says Jill Kelly, a Brisbane-based personal branding consultant. “Personal brands are built on trust, and action is more important than talk in building trust,” Kelly says. “What people do in a highly visible time goes to their personal brand as a CEO.”

The message, Kelly says, is that Kloppers is committed to the organisation’s future. “He is committed to its future because he is putting the company’s priorities ahead of his own. That says ‘I am invested, at a personal level’, and those actions speak louder than words.”

However, Kloppers will have to follow up this high-profile move with further action that reinforces his commitment to the miner’s future success.

The CEO of Image Group International, Jon Michail, believes Kloppers’ move is a clever one, entirely consistent with the brand of the company. “The Big Australian makes the big decisions,” he says. “It is very courageous for them to be the first, at that level, to say they are stopping the bonuses.”

The decision fits well with Kloppers’ personal brand as a tough, decisive executive, Michail says. “It is an indication of his leadership. The chairman is Jac Nasser, and he is also known as tough.”

The remuneration committee and the board announced that they “respected” Kloppers’ decision. The CEO of BHP Billiton Petroleum, Mike Yeager, also sacrificed his right to a bonus in the wake of the write-down.

Michail says Kloppers’ move ticks a long list of personal and corporate branding benchmarks, by:

  • Increasing the visibility and presences of both Kloppers and BHP in a positive way. It is a story that the company has managed well.
  • Creating a stronger, more controlled image for himself and the company because they are seen to be on the front foot.
  • Establishing Kloppers as a leader, and differentiating himself from this peers by taking a courteous stand
  • Walking the talk – an essential to demonstrating leadership.

There is not much downside for Kloppers or BHP Billiton in the sacrifice of the CEO’s bonus, Michail thinks. Both are likely to benefit now and over the long-term as follows:

  • Positioning the company as a good corporate citizen.
  • Removing the CEO from accusations of greed.
  • Probably increasing Kloppers’ compensation in the long-term as his leadership and sacrifice are appreciated.
  • Demonstrating to the company’s employees that their CEO will be the first to make sacrifices to take the company through any difficult times ahead.
  • Reducing turnover and boosting morale by showing the leader is connected to the issues.
  • Improving productivity by inspiriting other executives and employees to put in more effort, like him, above and beyond the basics.

In short, a good return on investment.

*This piece was originally published by LeadingCompany.


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