For a comparison, let’s take a different company boss – one whose predecessor had overseen a massive increase in cash flow and dividends, and whose main income streams – iron ore and copper sales – had largely been maintained during Covid-19.
Enter new Rio Tinto (RIO) boss Jakob Stausholm. He has a mandate to repair the major miner’s relations with the Indigenous land owners at its Pilbara iron ore operations, angry investors and fellow stakeholders in the Oyu Tolgoi underground expansion in Mongolia. Outgoing Rio boss Jean-Sebastien Jacques has left him with a bursting in-tray.
To help keep shareholders onside, Mr Stausholm has hefty dividends to hand out thanks to the strength in iron ore prices, although this has little impact on the Puutu Kunti Kurrama people and the Pinikura people (known collectively as the PKKP) and the government of Mongolia, which will likely not see dividends from its Oyu Tolgoi stake until the mid-2030s.
He has not laid out any major management philosophies yet, and a glance through his statements over the past two years he has served as finance chief shows the usual interest in free cash generation and capital expenditure, while Jean-Sebastian Jacques is usually more lyrical about Rio’s ambitions.
The insider appointment means Mr Stausholm will have a tougher time convincing the PKKP and other groups of Rio’s new approach, although this could mean greater internal changes given his need to prove he is not JSJ 2.0.
Mr Looney at BP has quickly proved he is not Bob Dudley minus 15 years. That will also be incoming Glencore (GLEN) boss Gary Nagle’s challenge, given his similar coal experience and background to long-term boss Ivan Glasenberg.
Another example – one more white man, because there unfortunately aren’t many other choices at the top of the extractives world – is Royal Dutch Shell (RDSB) boss Ben van Beurden. He is arguably in a tougher position than Messrs Looney and Stausholm, given the upcoming decision on how radically to change Shell’s spending and asset base in order to meet its net zero carbon emissions by 2050 goal.
According to Financial Times reporting, key managers from the clean energy team have left over disagreements on this strategy, with executives not keen on radical change. Resigning is an extreme reaction, so if our sister publication is right, Mr van Beurden has lost the locker room. The consequence is that Shell has to get this huge shift worked out in just a few weeks without key people, as it is to be announced in February.
I’m not advocating sympathy for these multimillionaire captains of industry, but if I had to pick a pair of shoes to stand in right now they would be the dressed-down-but-still-serious loafers of Mr Looney.
