Mining Executives

miningBuilding personal wealth from mining, oil and gas.

The keys to mining, oil & gas executives’ personal financial success

As market conditions in the mining, oil and gas industries challenge companies to achieve financial success, mining executives also face many challenges to achieve personal financial success.

Although most executives have high incomes which allow them a degree of lifestyle choice and freedom, many do not maximise their opportunities to accumulate the significant wealth that they could.

Executives face issues which are particular to the mining, oil and gas industry including the pressure to acquire company shares, dealing with these share option schemes and structuring them appropriately, and planning an investment exit strategy when leaving or retiring.

Personal challenges also get in the way of mining executives’ ability to accumulate wealth – a lack of time to focus on their own personal finances, a lack of financial investment knowledge and training, travelling or moving overseas for work, and a lack of strategic planning are common.

I don’t have enough time

The majority of mining executives want to use their time away from work to spend more time with their families or pursuing their hobbies.

I have no financial investment training

Earning higher than average incomes, mining executives know they must first reduce tax exposure and make the most of excess cash flow after their personal lifestyle commitments. As well as lack of time, many do not have the interest or knowledge about financial investments and structuring.

I am not strategic with my tax and investment planning

Earning a high income can be a good start to building wealth. But investing wisely and appropriate tax planning also make a huge difference in long-term wealth creation.

“When you are younger you tend to be more aggressive and speculative. But as you get older, you want to broaden your investments to ensure a smooth retirement.”

Former Mining Executive, Australian junior mining explorer

Holding Company Shares

Often mining executives are required to make a ‘financial commitment’ to the company to show shareholders the confidence and support they have in the company. Acquiring these company shares may build personal wealth, but it can also cause complex issues around asset structuring, especially when leaving the company.

Share Option Schemes

Share option schemes can be an effective way to provide incentives to company executives and staff.

There are, however, a number of complications associated with these including complex, long-term incentive triggers, taxation and ambitious exercise price targets. As a result, great care should be taken before factoring these options into any wealth accumulation strategies.

Moving internationally to work

As many mining companies are foreign or US-owned, many executives come to Australia from the US; and Australian executives move internationally to further their careers. This creates significant tax, superannuation and share option complexities which must be managed carefully to maximise future gains and wealth. Executives need advice on the tax implications of foreign investment holdings and what to do with their superannuation when they arrive in Australia as well as when they depart.

Whatever time I have left over after work is devoted to my wife and children. Often the last thing I want to deal with is my own financial stuff.

Former Executive Chairman – Off-Shore gas producer

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