Exxaro CEO Sipho Nkosi joked on the sidelines of his company's AGM this week that shareholders seemed to want him to pay back the R3.2-million bonus he was paid last year. During the AGM, Nkosi was grilled over his pay package in light of shareholders having to stomach a R5.8-billion writedown on the coal company's Mayoko project in the Democratic Republic of Congo.Nkosi, one of South Africa's highest-regarded businessmen, may have misjudged his influence when he decided to deal with the Congolese government to build the Mayoko iron ore mine - one of the most ambitious mining projects in that country. Although Nkosi managed to push through a mining convention agreement, promises from the Congolese government to sign a port and rail agreement were never kept.story_article_left1Exxaro's woes in the DRC have emphasised that despite governance reforms, it is still risky for investors to put money into a country ranked 152nd out of 175 on the corruption perceptions index. The DRC is also ranked 184th out of 189 countries on the World Bank's ease of doing business index. It takes 610 days on average for a company to resolve a contract dispute in court there.Shareholder activist Theo Botha, speaking on the sidelines of Exxaro's AGM, said he suspected that "the Congolese authorities were trying to give Nkosi and his team the shakedown in order for them to agree to get the other two agreements in place. I am guessing, when the Exxaro team did not want to agree to this, that is where the trouble came in."Exxaro chairman Len Konar said meetings were held with Congolese officials at the highest level - including the minister of minerals - who assured Exxaro it would receive the necessary port and rail agreements to move iron ore from the mine to a port for export when the first agreement was signed in January last year.With the promises in place, Exxaro went ahead and began shelling out large amounts on the project, which have reached R3-billion.But by July last year, Exxaro's board began to realise there were problems with the project. Nkosi told shareholders at the AGM: "We had the assurance from the [Congolese] government that the agreements would be in place by May [2014]. We made all our submissions by March. By around July-August, the board pulled the plug and we decided that no more money would be spent on the project."Nkosi said Exxaro was competing with two other projects for rail line capacity and wanted first-mover advantage. He also said there were a number of long-lead items that needed to be ordered.The project has had a devastating impact on Exxaro's financials: it went from a R6.2-billion profit in 2013 to a loss of R884-million in 2014 because of the massive writedown.And in its latest annual report, Exxaro highlighted "fraud and corruption" as one of its top 20 risks.But Konar defended paying out a large bonus to Nkosi under these circumstances, saying it was largely related to Exxaro's 2013 performance.mini_story_image_vright1"The CEO undergoes a performance assessment twice a year, and it's based on aspects such as delivery, leadership, transformation, safety and governance."Konar said Nkosi had done all he could. He had ensured the mining agreement was signed and the port and rail access agreements were in place. "The CEO cannot be penalised for [what happened afterwards]."Later, during a coffee break to calculate votes on resolutions, Nkosi joked to a colleague that it looks like shareholders want him to pay back his bonus.But the "advisory vote" on remuneration policy sailed through - 12.2% of shareholders voted against the policy, 87.8% in favour.All the resolutions put to shareholders were overwhelmingly approved. This suggests that investors who have seen their investment fall 41% in the past year - partly because of the DRC contract problems, as well as the wider pressure on commodity companies - still have faith in Nkosi's company.Nkosi, who set up Eyesizwe Coal in 1998 and from there negotiated deals that led to the formation of Exxaro, is set to retire from the company at the end of March next year.As part of his last year as CEO, he is behind a $472-million (about R5.7-billion) deal with Total Coal South Africa for its Dorstfontein and Forzando coal projects.This is not yet a done deal. Last week, Minister of Mineral Resources Ngoako Ramatlhodi said he must first be satisfied that Exxaro's acquisition of Total 's coal unit would benefit local communities before he would grant a mining licence.Ramatlhodi is in dispute with mining companies over whether they have complied with the 26% black ownership requirement for a mining licence in South Africa...