A MEGA-merger to create a new trading and mining powerhouse was approved by Xstrata shareholders yesterday, but with a controversial “golden handcuffs” executive pay plan thrown out.
A total of 79 per cent of mining group Xstrata’s investors voted in favour of the £56 billion deal as long as an associated £227 million retention plan for its top managers was not included.
The snub prompted Xstrata’s current chairman Sir John Bond, who will be chairman of the combined entity, to announce he would step down once a replacement is found.
Xstrata chief executive Mick Davis said he regretted the decision of shareholders not to approve the lucrative retention payments.
He said: “Glencore Xstrata has the potential to become a very significant company in the resources world and Xstrata’s people will be a critical element of this success.”
Glencore shareholders had overwhelmingly backed the merger earlier in the day, with the deal still needing antitrust approval from European and Chinese regulators.
If it gets the nod as expected, it will be the largest merger in the resources sector since Rio Tinto’s acquisition of Alcan in 2007.
The Xstrata/Glencore combination, which will be among the biggest 20 businesses on the London stock market, will have operations in 33 countries.