MELBOURNE (Reuters) - Rio Tinto (LON:RIO) Ltd will pay out part of a delayed bonus to former Chief Executive Sam Walsh after a dispute resolution process found that the payments should not be held up, both parties said on Thursday.
Rio Tinto's board and Walsh agreed to defer incentive payments from Walsh's time as chief executive in 2017 while regulators in the United Kingdom investigated payments to a consultant in relation to a Rio iron ore project in Guinea when Walsh was the head of Rio's iron ore group.
Rio sought to continue to defer payments owed to Walsh on Dec. 31, 2018, while investigation continued, though the two sides could not agree on a deferment.
The dispute resolution process determined that under the initial deferment deed Walsh's payments should not be held up any longer, Rio said in a statement.
"Payments will be made by Rio Tinto to Sam Walsh of all deferred incentive plan awards which would have been payable on 31 December 2018 together with associated dividends and interest," it said.
In a separate statement, Walsh said Rio will pay him A$6.8 million ($4.40 million) related to a portion of his long- and short-term incentive awards, plus interest. Two more payments are still to be made, one in December 2020 and another in May 2021.
The payments scandal related to $10.5 million in payments to a consultant linked to the Simandou iron ore project in West Africa when Walsh headed the iron ore division in 2011.
Rio became aware of emails relating to the payments and self reported to regulators in 2016 after which the UK's Serious Fraud Office opened up an investigation.
Sam Walsh helmed the iron ore giant from 2013 to 2016.