Glencore Xstrata rallies investors' support for new pay policy

http://www.theguardian.com/business/2014/mar/18/glencore-xstrata-shareholders-pay-policy-support

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Glencore Xstrata has tried to rally shareholders behind its pay policy after last year's uproar at its annual general meeting.

Glencore suffered one of Britain's biggest shareholder revolts last year when its chairman Sir John Bond was ousted from the board at the annual general meeting. Investors were angry about pay worth up to £240m awarded to Xstrata managers to retain them after Glencore's takeover of the miner.

In Glencore's annual report, John Mack, chairman of the remuneration committee, said: "We were disappointed in only receiving a 78% vote in favour of the 2012 directors' remuneration report at the 2013 AGM. Our understanding, however, is that this was largely a reflection of the controversy around some of the retention terms agreed by the Xstrata board rather than being a reflection on board level pay at the company itself.

"We have sought to ensure that our remuneration policy and its implementation are attractive to shareholders in reflecting good governance, complete simplicity and welcome restraint. We trust that you will support the associated votes at the 2014 AGM."

After a board clearout, Ivan Glasenberg is the only executive director left.

Glasenberg was paid a salary of £925,000 last year and, as usual, he took no bonus. This year he will be paid the same salary again and he has turned down the chance to earn four times that amount in bonus and long-term shares.

Mack said Glasenberg's pay was "one of the most modest packages of any FTSE100 CEO".

However, Glasenberg, a Swiss citizen, owns 1.1bn shares in the company – worth £3.4bn at today's share price – and collected $170m in dividends in 2013 and is due for $182m for last year. The company said his large holding put his interests in line with those of other investors without the prospect of a bonus.

Glencore paid Tony Hayward, the former boss of BP, £474,000 as acting chairman after he took over from Bond at last year's annual meeting. The company has said it intends to have a long-term chairman in place by May, when its annual meeting takes place in Zug, Switzerland.

Hayward said 26 employees were killed at work last year.

"Any fatality is totally unacceptable and one of the board's main objectives is to bring about lasting improvements to our safety culture. We are overseeing the formulation and implementation of enhanced safety processes, and receive updates at every board meeting on the progress being made," he said in the annual report.