Mining groups Glencore and Xstrata are considering changing the retention packages in their merger deal after shareholders balked at the millions offered to executives to stay.
Shareholders from both companies are due to vote on Glencore’s takeover of Xstrata in mid-July but several investors have raised concerns at the packages, particularly after a spate of pay revolts in what has been dubbed the “Shareholder Spring”.
Xstrata chief executive Mick Davis was due to get almost £30 million over three years to keep him at the helm. In total, 73 key executives were due to get more than £170m in retention deals.
“Shareholders have been vocal… and there is also a silent majority. We are all working to get the right outcome,” said one source.
The retention packages under the current deal structure were due to be paid mostly in cash and were not tied to future performance. Shareholders have demanded changes including tying the retention to performance or paying more of it in shares. Under the current structure of the deal, shareholders cannot vote for the deal without approving the retention deal.
The two companies have not made any decisions yet, sources said. But any decisions would likely have to be taken this week in order to keep on track for shareholder votes on 11 July for Glencore and 12 July for Xstrata.
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