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BHP freezes pay for chief and top executives

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BHP Billiton has implemented a pay freeze for its chief executive and senior management team, as the downturn across the mining sector continues to bite.

The world's biggest miner said in its annual report on Thursday that the base salary and total target pay packages of Andrew Mackenzie, BHP chief executive, and other executives would be unchanged for 2015.

Read MoreIron ore could drop another $10

Mr Mackenzie earned US$8 million in 2014, his first full year in the job – roughly half of what his predecessor Marius Kloppers earned in his final year as head of the Anglo-Australian miner.

"Last year, when Mr Mackenzie was appointed to the chief executive role, the board and committee believed that some downward rebasing of his remuneration package, relative to that of the former chief executive, was appropriate – a view supported by Mr Mackenzie," said BHP.

The company also said it would freeze fees for non-executive directors for a fourth consecutive year.

Mining companies have embarked on deep cost-cutting programs across their operations following a decade-long investment boom that resulted in poor returns for investors.

Earlier this week, BHP cut 700 jobs at a joint venture coal operation in Queensland in response to a prolonged slump in coal prices due to oversupply and faltering demand in China.

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Iron ore, which has been one of the company's strongest performing divisions in recent years, is also coming under pressure with prices having fallen by more than 40 per cent since the start of the year.

Investors are pushing miners to consolidate their operations, cut capital expenditure and implement cost saving measures such as job reductions and wage freezes.

BHP's annual report showed Mr Mackenzie was paid a base salary of US$1.7 million in 2014 and US$5.7 billion in bonuses, which were based on meeting targets in a short- and long-term incentive plan. Additional benefit and pension payments were also included in his remuneration.

Read MoreBHP Billiton creates new metals and mining company

BHP is in the midst of a major corporate restructuring designed to simply the group and boost returns for investors.

It is bundling a swath of non-core assets into a separate diversified mining company, the "newco", which it initially proposed to list only on stock exchanges in Australia and South Africa. This week BHP bowed to investor demands and is now set to offer a UK listing for the spin-off company.