SOUTHERN COPPER CORP (SCCO)
Sector: Materials
2026 Annual Meeting Analysis
SCCO · Meeting: May 29, 2026
Directors FOR
6
Directors AGAINST
2
Say on Pay
AGAINST
Auditor
AGAINST
Director Elections
Election of Eight Directors
Against Analysis
The proxy explicitly discloses that Mr. Contreras Lerdo de Tejada is the son-in-law of Chairman Germán Larrea Mota-Velasco, who controls the company through Grupo Mexico; this familial relationship to top management triggers a No vote under the policy's familial relationship rule, regardless of his operational qualifications or the strong stock performance.
The proxy explicitly discloses that Mr. Valenzuela Rionda is the nephew by marriage of Chairman Germán Larrea Mota-Velasco, the controlling shareholder; this familial relationship to the top executive triggers a No vote under the policy's familial relationship rule, and the board's designation of him as independent is questionable given this close family tie.
For Analysis
Director since 1999 with strong relevant industry experience; SCCO's 3-year price return of 177.9% outpaces the ^GSPC (S&P 500) by +106.4 percentage points, far exceeding the 65pp threshold needed to trigger an against vote, so no TSR concern applies.
Director since 2018 with deep finance and mining expertise; serves on the Audit Committee and is designated an Audit Committee Financial Expert; no TSR trigger fires given SCCO's strong outperformance of the ^GSPC (S&P 500).
Director since 2024, within the 24-month exemption window, so the TSR trigger does not apply; brings extensive financial and corporate governance experience from senior roles in banking and advisory.
Director since 2010 with broad financial and executive experience; no TSR trigger fires given SCCO's strong outperformance of the ^GSPC (S&P 500) over the 3-year measurement period.
Director since 2004 with a PhD in Finance from Wharton and designated Audit Committee Financial Expert; no TSR trigger fires given SCCO's substantial outperformance of the ^GSPC (S&P 500).
Director since 2004 with extensive executive and government experience; no TSR trigger fires given SCCO's strong outperformance of the ^GSPC (S&P 500) over the 3-year period.
Six of eight director nominees receive a FOR vote; SCCO's 3-year price return of 177.9% dramatically outperforms the ^GSPC (S&P 500) by +106.4 percentage points, so no TSR-based against votes are triggered. Two nominees — Leonardo Contreras Lerdo de Tejada (son-in-law of controlling chairman Germán Larrea) and Jose Pedro Valenzuela Rionda (nephew by marriage of the same chairman) — receive AGAINST votes due to close familial relationships with the company's top executive and controlling shareholder, a clear governance concern.
Say on Pay
✗ AGAINSTCEO
Oscar González Rocha
Total Comp
$1,298,630
Prior Support
99.41%%
The company explicitly states that it does not provide compensation tied to specific pre-determined individual or company performance criteria and that all cash incentive payments are fully discretionary without pre-established performance targets — meaning bonuses are effectively fixed pay dressed up as variable pay, which fails the policy's requirement that at least 50-60% of senior executive compensation be genuinely performance-based. The CEO's total compensation of $1,298,630 is modest relative to peers of a $160 billion market cap company, so pay level is not the concern; the fundamental problem is that the incentive structure has no meaningful performance conditions, undermining the entire purpose of variable pay. The prior year's 99.41% support reflects the controlled-company dynamic (Grupo Mexico owns 88.9% and votes in favor), not broad independent shareholder endorsement of the pay structure.
Auditor Ratification
✗ AGAINSTAuditor
Galaz, Yamazaki, Ruiz Urquiza S.C. (Deloitte Touche Tohmatsu Limited)
Tenure
N/A
Audit Fees
$1,712,447
Non-Audit Fees
$869,824
The non-audit fees (audit-related fees of $408,726 plus tax fees of $461,098, totaling $869,824) represent approximately 51% of the core audit fees of $1,712,447, which exceeds the 50% threshold in the voting policy; this level of non-audit work raises concerns about whether the auditor can remain fully independent from management. Auditor tenure is not disclosed in the proxy so no tenure trigger fires, but the non-audit fee ratio alone is sufficient to warrant an AGAINST vote.
Overall Assessment
SCCO's 2026 annual meeting features strong stock performance — a 177.9% 3-year return vastly outpacing the ^GSPC (S&P 500) — but two director nominees are flagged for familial ties to the controlling chairman, the auditor faces an AGAINST vote due to non-audit fees slightly exceeding 50% of audit fees, and the Say on Pay program earns an AGAINST because executive bonuses are entirely discretionary with no measurable performance conditions, making them effectively fixed compensation in variable clothing. The company's controlled-company status (Grupo Mexico holds 88.9%) means most of these votes are unlikely to change outcomes, but independent minority shareholders should register their concerns on governance structure.
Compensation Peer Group
1 companies disclosed in 2026 proxy filing