Extended contracts for Rio management welcomed by Investec

23rd Oct 2014 09:07

Investec hailed Thursday's announcement by mining group Rio Tinto that it has decided to extend the tenure of its chief executive officer (CEO) and chief financial officer (CFO), saying it provides certainty for shareholders.CEO Sam Walsh and CFO Chris Lynch, who both joined early last year, will be put on open-ended contracts with no-end date from 2015.Investec said: "Sam was brought in to 'steady the ship' and return the company to its long-term values and he has done an excellent job in this regard, supported by Chris. In the current challenging commodity price environment we see no better a captain."The broker added: "The announcement also provides some certainty around leadership, taking pressure off of the lieutenants that were the CEOs-in-waiting (assuming such alpha-males are happy to continue the lieutenant role)."It also said that Walsh is "no push-over" and so presents a "formidable barrier" against a potential takeover.Rio's shares were down 1.6% at 3,039p by 10:12.