Skip Ribbon Commands
Skip to main content

Compensation

As a global company, Vale knows that attracting the best professionals, retaining talent, motivating and engaging leaders in strategic positions, especially Statutory members of the Executive Board, members of the Board of Directors, Advisory Committees and the Fiscal Council, is a critical challenge for the company’s success at all times. Therefore, the market is always a reference within a global perspective, as well as the vision of aligning the organization's long-term success with the management’s compensation policies and practices. Vale considers the compensation policies and practices adopted by the main mining companies and other large global companies in similar industries and sectors, among other elements, such as its long-term strategy.

The annual compensation proposal is prepared based on these market principles, also taking the responsibilities of each member, their skills and the value of their services into account. The Company also considers market practices, their alignment with short- and long-term strategies, shareholder returns and the sustainability of its businesses.

Compensation proposals and policies are prepared with the support from the People, Compensation and Governance Committee (“CPRG”), which is composed of five members, four of whom are members of the Board of Directors, and one is an external specialist.

One of the core pillars of designing the compensation proposal is the establishment of targets linked to the Company's sustainable performance and to the returns to its investors.

Short-term variable compensation

Short-term variable compensation is based on performance goals of different natures, which are an important management tool and have been increasingly relevant to the evolution and implementation of the Company’s main strategic plans. It is associated with economic and financial, health and safety, sustainability and strategic goals.

Long-term variable compensation

Long-term variable compensation programs are comprised of Matching (program in the Restricted Shares modality) and VSP - Vale Shares Plan (program in the Performance Shares modality) and are applicable only to the company's leadership levels, excluding Board of Directors, Fiscal Council and Advisory Committees, that would not be entitled to any type of variable compensation.

Vale's long-term compensation is associated with the performance of the common share, thus is directly related to the return given to shareholders. In the case of VSP, compensation is calculated as a direct function of Vale's Total Shareholder Return (TSR) indicator, which takes into account stock price fluctuations and dividends (or interest on equity) paid to shareholders over the plan period.

It is worth noting that, in 2019, the maintenance of share ownership was implemented, in which the executive must accumulate and hold on their Vale shares in the amount equivalent to at least thirty-six (36) honorary fees to the CEO and twenty-four (24) honorary fees for the Executive Directors. Shares may be accumulated through the share-based variable compensation programs offered by the Company throughout their terms.

Vale Shares Plan (VSP)

This represents a variable long-term compensation amount, linked to the Company's performance against other large mining and similar companies, and focuses management efforts on the creation of value and wealth for Vale, aligning executives and shareholders’ interests and reinforcing the culture of sustainable performance.

The VSP payment metric consists on the Total Shareholder Return (TSR) relative to the peer group, taking into consideration the businesses and regions where Vale operates and the influence of Brazilian market fluctuations.

If Vale comes first in the ranking (P100 percentile), the value is increased by 50%; if Vale is at P25 (first quartile) or below, there is no payment; and for Vale's intermediate positions in the companies ranking (between P25 and P100), it is paid according to the performance, which may vary between 10% and 150% of the value, as follows:

Gráfico Remuneração Diretoria Gráfico Remuneração Diretoria

In addition to the TSR metric, the Company included, in 2020, the performance metric related to ESG - Environmental, Social and Governance: it includes (i) Health & Safety, with the indicator of High Potential Recordable Injuries (N2), that is, incidents that can generate fatalities and/or high potential injuries, with the objective of zeroing N2 incidents by 2025, according to the curve presented to the market in 2020; and (ii) Sustainability, with metrics based on Vale's 2030 commitments , applicable to the entire Company, at a global level, such as greenhouse gas reduction and Dow Jones Sustainability Index (DJSI) performance.

Additionally, as approved at the 2021 Annual Meeting of Shareholders, the award at the end of the cycle, conditioned to the achievement of the performance factor, from the 2021 cycle onwards will be made through the delivery of Common Shares issued by the Company, after the end of the cycle. In addition to the regular award, in 2021 the additional payment related to virtual dividends was also included, conditioned to the distribution of dividends or interest on capital by the Company.

Historical summary

The evolutions and improvements strengthen the ownership feeling and the executive engagement, in addition to aligning their actions with the shareholders’ interests.

Matching

Matching Program is one of the long-term variable compensation programs; although it is voluntary for eligible leaders, participation and retention of shares is mandatory for Statutory Officers. To comply with the program, the Statutory Officers must use their own resources to acquire common shares issued by the company (through the purchase in the market or the use of shares that the executive already owns, detached from current cycles) and keep them in their possession for at least the three-year cycle, observing the Stock Ownership Guidelines (SOG) or Mandate of Share Ownership. After the three-year cycle, the executives who are still in the Company and own these shares receive the program award, of at least the same number of shares originally acquired.

Ilustração em Remuneração Ilustração em Remuneração

Compensation of the Named and Non-Named Board of Executive Officers

Compensation of the Executive Officers

Vale's Executive Compensation has been constantly improved. In recent years, the Company has been actively listening to investors and has carried out foreign market research and data and performance metrics analysis to advance its compensation practices, contributing to the strategy execution, competitiveness, alignment with shareholders’ interests and Vale’s cultural transformation.

Gráfico Remuneração Diretoria Gráfico Remuneração Diretoria

Fixed Compensation

Base fee: this is the monthly fixed fee, which aims to attract and retain executives with experience and capacity compatible with the scope and responsibility of the position assigned to them in the Company’s management. These components are not associated with Vale’s performance.

Direct and Indirect Benefits: Executives are entitled to a benefits package compatible with market practices, which includes medical, hospital and dental care, supplementary pension plans and life insurance. The benefits, in addition to being in line with market practices, are intended to support executives and their dependents in key areas, such as healthcare and housing.

Direct and Indirect Benefits: Executives are entitled to a benefits package compatible with market practices, which includes medical, hospital and dental care, supplementary pension plans and life insurance. The benefits, in addition to being in line with market practices, are intended to support executives and their dependents in key areas, such as healthcare and housing.

Participation in Committees: Executives are not entitled to compensation for participation in executive committees.

Compensation of the Non-Named Executive Officers

These are employees of the Company with an employment relationship and may be responsible for global corporate functions or business units, or for regional or local corporate functions, or for areas or operating systems in the Company's various businesses.

Fixed Compensation

Base fee: They are entitled to receive a monthly fixed amount, defined on the basis of the Company structure of positions, which is aligned to the market practices and the purpose of which, according to the employment agreement signed with each executive, is to remunerate the services provided within the scope of responsibility assigned to each one in the different activities of the Company.

Direct and Indirect Benefits: They are entitled to a package of benefits compatible with market practices including Medical-Hospital-Dental Care, Complementary Pension (Valia) and Life Insurance. The benefits, in addition to being aligned with market practices, are intended to support executives and their dependents in key areas, such as health care and housing.

Participation in Committees: They are not entitled to compensation for participation in committees.

Variable Compensation

Profit sharing: Refers to Short Term Variable Compensation (annual), based on the Company’s results and defined through indicators and targets, derived from the strategic planning and annual budget approved by the Board of Directors.

Vale Shares Program ('VSP'): The rules and conditions of the VSP offered to these stakeholders are the same as those applied to the Named Executive Officers.

Matching: The rules and conditions of Matching offered to these stakeholders are the same as those applied to the Statutory Officers except for the voluntary rule (for non-statutory leaders, participation in the program is voluntary).

It should be noted that the Stock Ownership Guidelines (SOG) rule does not apply to this group.


Compensation of the Board of Directors, Advisory Committees and Fiscal Council

Compensation elements for the Board of Directors, Board Committees and Fiscal Council

Board of Directors (BOD): Members receive a fixed monthly compensation, while the only alternate member receives the fixed compensation when there is participation in a meeting of the Board of Directors, replacing the member elected by the employees.

Board Committees and Consulting Committees of the BOD: The compensation considers exclusively the payment of a monthly installment (fee) within the scope of responsibility attributed to each Committee and Advisory Committee of the Company.

Fiscal Council: Fees for sitting members are equivalent to 10% of the Statutory Officers’ average fixed compensation.

There is no bonus or any variable remuneration

Compensation of Boards, Councils and Comittees

Check the fixed and variable compensations list:

For more information about Vale's compensation access our Reference Form 2022


Compensation Discussion and Analysis

The proposed 2022 total compensation of R$ 261,144,411 (two hundred and sixty-one million, one hundred and fourty-four thousand, four hundred and eleven reais), free of social charges, includes statutory members of the Executive Board, members of the Board of Directors, Fiscal Council and Advisory Committees. The proposal for 2022 was higher than the actual compensation for the year 2021 due to the compensation of the Executive Board, as detailed below:

  • LTIs: refer to share-based, Matching and VSP programs, which are provisioned monthly based on monthly partial results. The VSP result calculated for the closing of 2021 was low (25% for the 2018 cycle and zero for the 2019 and 2020 cycles), which generated a reversal of previous provisions and a negative accounting result for 2021. The impact of this result, when compared to the reach predicted in the target/fair value, was R$ 68 million.
  • Fixed compensation: the increase is mainly due to the entry of new executives into the Company's statutory Executive Board, impacting fixed fees and private pension.
  • Others: mainly comprised of annual bonuses, termination of office and other payments to the Executive Board, as well as the remuneration of Boards and Committees.

Compensation for administrators - amounts without social contributions (in Brazilian reais) Actual 2021 (accrual) Forecast 2022 (accrual)
Board of Directors 11,233,740 19,463,933
Advisory Committees* 9,944,679 2,700,000
Fiscal Council 1,572,553 1,603,936
Executive Board 163,744,175 237,376,542
Total 186,495,148 261,144,411

Fixed compensation

In 2021, total fixed compensation was 15% higher than in 2020 and 1% higher than in 2019, in line with the number of active executives in each of the years. In the same year, the average base fee per executive was 12% lower than in 2020 and 14% lower than in 2019, which reinforces the greater focus given by the Company on long-term variable compensation.

For 2022, the total fixed compensation forecast is higher than the compensation made in 2021 due to the greater number of executives and merit adjustments made in January (considering only a few executives and a percentage below inflation). However, the average base fee per executive is in line with that of 2021 (increase of 3%)

Annual Fixed Compensation (R$)
Executive Board (excluding social charges) 2019A (cash) 2020A (cash) 2021A (cash) 2022F (accrual)
Nº of members receiving compensation 6.91 6.35 8.61 10.00
Salary or pro-labore 24,913,436 22,404,890 26,723,539 32,078,723
Average salary or pro-labore 3,605,418 3,528,329 3,103,779 3,207,872
Direct and indirect benefits 8,130,546 6,730,674 6,638,797 7,862,528
Total 33,043,982 29,135,564 33,362,336 39,941,251

Variable compensation

In 2019, as part of the response to the tragedy in Brumadinho, the Board of Directors suspended the payment of short and long-term variable compensation to its executives.

In 2020, with the evolution of the reparation program and the progress of investigations, the Board resumed payments, retroactive to the year of suspension, for executives who were not involved in the investigations into the dam failure. Thus, payments suspended in 2019 were paid in 2020, cumulatively with the amounts due for payment this year. For analysis purposes, this item provides, in addition to the amounts actually paid each year, the amounts that would have been due for payment each year if the suspension had not occurred (variable “standardized” compensation). Additionally, in 2020, for the first time, the payment of the “virtual dividends” of the Matching program took place.

For 2022, in addition to the regular programs and the “virtual dividends” of the Matching Program, for the first time, the “virtual dividends” referring to the VSP Program are computed.

Vale's executive compensation mix has been adjusted in order to give more focus and relevance to long-term, share-based variable compensation programs. The objective is to increase the alignment with the practices of the international executive market and the interests of shareholders. The move is also an offshoot of the annual executive performance evaluation process.

Variable compensation has increased as a result of: (i) the adequacy of the executive compensation mix, with increasing focus on long-term, share-based variable installments; and (ii) inclusion of the payment of virtual dividends in the Matching and VSP Programs.

Variable Compensation (R$)
Executive Board (excluding social charges) 2019A (cash) 2020A (cash) 2021A (cash) 2022F (accrual)
Annual Bonus 0 36,629,008 35,350,518 35,955,926
Share-based compensation (VSP) 25,676,497 16,097,816 23,586,492 73,398,044
Share-based compensation (Matching) 0 29,894,388 61,464,613 64,544,020
Others 2,758,621 131,591 12,686,182 14,652,113
Total 28,435,118 82,752,803 133,087,805 188,550,103
Variable Compensation (R$)
Executive Board (excluding social charges) 2019A (cash) 2020A (cash) 2021A (cash) 2022F (accrual)
Annual Bonus 17,580,362 19,048,646 35,350,518 35,955,926
Share-based compensation (VSP) 25,676,497 16,097,816 23,586,492 73,398,044
Share-based compensation (Matching) 7,614,066 22,280,322 61,464,613 64,544,020
Others 2,758,621 131,591 12,686,182 14,652,113
Total 53,629,546 57,558,375 133,087,805 188,550,103

The increase seen in the last two years (2021 and 2022), in addition to reflecting the greater weight of share-based variable compensation in the compensation mix, also results from the increase in the price of the dividend / JCP distributed by the Company to its shareholders in 2021 and the inclusion of virtual dividends in the VSP Program, in addition to the increase in the number of executives.

Below the average variable compensation, considering only the variable compensation programs (Annual Bonus, Matching and VSP Programs) and the number of executives in each year:

Variable Compensation (R$)
Executive Board (excluding social charges) 2019A (cash) 2020A (cash) 2021A (cash) 2022F (accrual)
Nº of members 6.91 6.35 8.61 10.00
Variable Compensation (average) 3,715,846 13,011,215 13,983,928 17,389,799
Variable Compensation (average) Normalized 7,361,928 9,043,588 13,983,928 17,389,799

Evolution of Executive Variable Compensation

Increase in line with the adjustment of the executive compensation mix, focusing on long-term variable installments.

For further information and details about Vale's compensation practices, click here.

Annual bonus targets

2021 Bonus Panel composition

Collective targets
Executive Officers
Target Description CEO CFO S&EO Others
1. Economic / financial EBITDA less sustaining investment (adjusted) totals 20% of the executives' bonus panel and 25% of the CEO's bonus panel. This indicator considers the budgeted EBITDA amount adjusted to: price, exchange rate, other exceptions/considerations evaluated as external, and Sustaining Investment adjusted to exchange rates and other mapped exceptions. Its objective is to measure Vale's results, without being impacted by the aforementioned factors. 25% 20% - 20%
2. Health Reduce the number of employees and third parties exposed to harmful agents, through the implementation of controls in risk scenarios that eliminate exposure or reduce it to acceptable levels. Includes fatality-related penalty. 5% 5% 10% 5%
3. Safety Reduce the absolute number of recordable injuries with potentially critical or catastrophic severity (N2). Includes fatality-related penalty (N1). 10% 10% 15% 10%
4. Risk management Reduce catastrophic risk scenarios that have been mapped out. 10% 10% 20% 10%
5. Sustainability Strengthen the strategy and public commitments of Vale's 2030 Agenda, through the Environmental indicators, related to Climate Change, and Social, related to the Implementation of the Social Action Model: (i) climate change - Reducing greenhouse gas emissions, and (ii) social – evolve in the implementation of the social action model. 10% 10% 10% 10%
6. People The three themes addressed under this target are: Diversity (increase the number of women at Vale and in leadership positions), Talent and Performance Management, and Succession. This indicator reflects Vale's priorities in relation to the theme of People and is an important vector in developing and promoting leadership aimed at sustaining a healthy and diverse pipeline, in addition to promoting a more inclusive environment. 10% 10% 10% 10%
7. Adherence to the VPS roadmap Strengthen Vale's organizational culture through the development of people, operational discipline, and compliance with established routines. The target aimed at Adherence to the VPS Roadmap became part of the bonus panel in 2021, in line with strategic objectives and with the aim of developing the maturity of Vale's Management Model. VPS is one of the levers used in attaining the Company's Purpose. 10% 10% 15% 10%
8. Productivity In addition to the above targets, Vale faces the challenge of optimizing its workforce by 2023. It has therefore included the Productivity indicator in the 2021 bonus panel in order to accelerate initiatives in automation, process innovation, centralization of functions, teleworking, and other areas. - 5% - 5%
  • Collective targets may have a global scope or be adjusted for each member of the Executive Board, taking their performance at the Company into consideration, with the exception of the People goal.
  • The results of all targets are converted into points, using a scale which establishes:
    • 0.50 of a point as the minimum result for eligibility to receive the annual bonus;
    • 1.00 point as an expected result for the year;
    • 1.50 points as the maximum result eligible for the annual bonus payment.

Results of the 2021 Goals Panel

Results in relation to targets for Operational Risk Management, Sustainability, People, Productivity and Adherence to the VPS Roadmap exceeded the established expectations, while Health targets were fully achieved in most business areas. These results are essential in the Company advancing with its ambitions, in particular, the ambition to become an industry reference in safety.

Global EBITDA-Current Investment (adjusted) was below expectations for the year, impacted by lower volumes and higher unit and freight costs. This impact was partially offset by higher overall premiums, commercial initiatives in pellets, and lower execution in Current Investments.

Results for Safety targets were below expectations, with fatalities occurring throughout the year penalized across all departments, with the exception of Base Metals.

Collective targets
Executive Officers
Target CEO CFO Ferrous Base Metals S&EO Legal & Tax Others
Economic / financial 25% 20% 20% 20% N/A 20% 20%
Health 5% 5% 5% 5% 10% 5% 5%
Safety 10% 10% 10% 10% 15% 10% 10%
Risk management 10% 10% 10% 10% 20% 10% 10%
Sustainability 10% 10% 10% 10% 10% 10% 10%
People 10% 10% 10% 10% 10% 10% 10%
Adherence to the VPS roadmap 10% 10% 10% 10% 15% 10% 10%
Productivity N/A 5% 5% 5% N/A 5% 5%
Specific targets
Individual Targets 20% 20% 20% 20% 20% 20% 20%

Less than 0.50 points

Between 0.50 and 0.99 points

Between 1.00 and 1.50 points

2022 Annual Bonus Panel

In 2022, the company intends to continue encouraging mutual collaboration based on the key behavior “Responsibility for the Whole”, through a model constituted with greater weight in collective goals. In addition, the focus and relevance are maintained on the critical objectives related to Safety, Risk and Sustainability, defined after Brumadinho, so that Vale pursues its ambition to become a reference company in Safety.

As a financial goal, in addition to maintaining “(adjusted) EBITDA” on its dashboard, the “Fixed Expenditure” indicator was included, to further reinforce Vale's direction in creating and sharing value.

In order to continue advancing in the implementation of the Vale Management Model – VPS, this goal remains on the panel, aiming at greater stability, safety and reliability of our assets and leveraging the desired cultural transformation.

Finally, and in line with the Diversity, Equity and Inclusion strategy, we remain committed to fostering a diverse pipeline at Vale, increasing the total number of women and the number of black people in leadership positions.

Collective targets
Executive Vice-Presidencies
Target Description CEO CFO S&EO Others
1. Economic / financial EBITDA (adjusted): aims to encourage the reaching and surpassing of EBITDA. 25% 25% - 25%
Fixed Expenses: aims to reach the budget for absolute fixed expenses based on responsibility. 10% 10% - 10%
2. Safety Its objective is to contribute to the continuous improvement of health and safety management, through the identification and reduction of the number of accidents involving potential fatalities. Includes penalties related to fatalities. 10% 10% 20% 10%
3. Risk management The objective of this target is to contribute to the continuous improvement of health and safety management through the identification and reduction of catastrophic risk scenarios. 10% 10% 20% 10%
4. Sustainability, Diversity, Equality, and Inclusion These objectives include: (i) developing safety management in communities, reducing exposure to the event risks; (ii) foster a diverse pipeline at Vale, increasing the total number of female and Black employees occupying leadership positions. 10% 10% 15% 10%
5. Vale Management Model - VPS This target is aimed at advancing with the implementation of VPS, providing increased stability, safety, and reliability with our assets, and providing leverage for our cultural transformation. 10% 10% 20% 10%
Specific targets
Individual Targets Defined for each of the executives, according to their specific focus and the scope of their activities. Targets can either be specific to each executive officer, or they can be shared, for a greater sense of exchange and engagement between departments 25% 25% 25% 25%
Total 100% 100% 100% 100%

Policy

Executive Directors Compensation Policy

Read also

Ethics and Transparency image

Ethics and Transparency

All our relationships are based on ethical standards

Read more
Board of Directors and Leadership image

Board of Directors and Leadership

Meet our top leaders

Read more