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BHP Billiton makes senior management changes

The Anglo-Australian mining company reveals salary details of Andrew Mackenzie.

BHP Billiton has said that Mike Yeager, the head of petroleum, Alberto Calderon, chief executive of the aluminium and nickel division, and Marcus Randolph, head of ferrous and coal, would all be departing their roles.

The company, however, said that Calderon would remain as an adviser to the new CEO Andrew Mackenzie until the first half of 2014. Yeager would be retiring in July, while Randolph’s role had been made redundant.

The changes, which are designed to remove a layer of management at BHP, will take effect from 10 May 2013.

BHP Billiton said its aim of shuffling senior management is to bring key businesses closer to head office.

Under the new structure, BHP will have five divisional heads viz: petroleum and potash, copper, iron ore, coal aluminium manganese and nickel and coal. The new heads will report directly to Mackenzie and will be part of the group management committee.

The biggest change was the decision to place Tim Cutt, the current head of diamonds and speciality products, in charge of the new petroleum and potash division, according to industry analysts.

Dean Dalla Valle will now oversee all BHP’s coal assets.

Mackenzie, in a statement, said: “With the company’s focus having shifted to an even greater emphasis on operation excellence, the removal of a layer of management brings the operations closer to the CEO. All of this will be critical in driving our productivity agenda.”

BHP Billiton revealed that Mackenzie will receive a base salary of $1.7m per year, which is 25 per cent of his predecessor pay, while his pension contribution has been cut to 25 per cent of base salary, from 40 per cent. The maximum amount Mackenzie could earn in a year under the terms of his package is $12.6m.

BHP chairman Jac Nasser said that, while the current chief executive remuneration package had served the company well, some downward rebasing was appropriate at this time and was supported by Mackenzie, reported the Financial Times.

Shares of BHP were declined by 3.1 per cent to A$31.50 today morning in Sydney.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.