In key news on Australian stocks, BHP Group Limited (AU:BHP) is reportedly slashing its employee incentives worldwide as the miner missed its internal performance targets. According to the Australian Financial Review (AFR), the management highlighted the shortfall in cost, production, safety, and gender equity goals in multiple divisions. BHP shares were down 1.13% as of writing.
BHP is a multinational mining company with a diverse portfolio of commodities such as iron ore, coal, copper, nickel, and various other minerals.
BHP Trims Incentives
BHP will reduce the short-term incentives offered to all its employees for 2023-24 by 20%. Meanwhile, the company’s workers at the Queensland coal division will face a 30% reduction due to two downgrades in sales guidance and a fatality at the Saraji mine in the Bowen Basin.
These short-term incentives account for 15% of employees’ total salaries, and reducing them will result in significant cost savings for BHP.
As reported by the AFR, some BHP employees are not happy with the reduction in incentives. They blamed hiring freezes in certain divisions as an obstacle to achieving targets. They also felt that the internal goals were unrealistic.
BHP’s Impairment Worries
In the first half of FY24, BHP’s performance was impacted by an exceptional loss of $5.6 billion due to impairments related to Western Australia Nickel and charges linked to the Samarco dam failure. BHP reported after-tax profits of $927 million, marking a huge decline of 86%.
In its Q3 update, BHP stated that it is exploring options for its nickel business to preserve cash and revive its operations. Additionally, the company maintained its annual production targets for multiple commodities.
Is BHP Currently a Good Buy?
According to TipRanks’ consensus, BHP stock has been assigned a Moderate Buy rating, backed by seven Buy recommendations and nine Holds. The BHP share price target is AU$43.01, slightly below the current trading price by 3%.
