So Tom Albanese has been sacked (sorry, err, he “resigned”) as the CEO of Rio Tinto. He was only paid $7m in 2011 for his efforts at Rio Tinto so I guess there were warning clouds there. But after all, what did he really get wrong? Turning down BHP-Billiton’s 2008 3 share offer might have been seen as a slight error. This then valued Rio Tinto at $150 per share compared to the $64 the shares are now valued at. But grumpy shareholders who get pissed-off with this should recognize that mistakes will happen. They can also take pride in the fact that Albanese’s rejection saved BHP-Billiton from the most catastrophic investment in its long history of making dud investments and that would have reflected badly on BHP-Billiton’s Marius Kloppers. There are real people here whose feelings do matter.
And it would be taking much too short-term a view to blame Albanese for the $35b in write-downs Rio Tinto has been forced to make since its dud acquisition of Alcan and most recently on its Riversdale assets. I mean what is $35b? It’s a dollar sign, two digits and an un-capitalized letter of the English alphabet.
Albanese and Kloppers deserve every cent they get. Indeed give them more and crown them with birthday honors. If it wasn’t for the wise investment decisions made in our innovative private sector the Australian economy would indeed be up s**t creek without the proverbial paddle. The crazy public sector decision to squander $27b on a National Broadband Network comes to mind. (1060)