There have been surprise personnel changes at the top of the newly merged Glencore Xstrata commodities giant during its first annual general meeting in Zug on Thursday.This content was published on May 16, 2013 - 18:01
All former Xstrata directors were voted out, strengthening the control over the new company of CEO Ivan Glasenberg, who headed Glencore before the merger and is the largest shareholder.
First indications of the shake-up came with an early morning notice to the stock exchange announcing that director Steve Robson – who had been up for re-election - had resigned with immediate effect. He had been a non-executive director of Xstrata since 2002.
And at the meeting itself, former Xstrata chairman John Bond announced without explanation that he had not been re-elected to the board. It is reported that 80.85 per cent of shareholders voting against him. Bond, who had been expected to chair the meeting, therefore handed over control to Tony Hayward the senior independent director and deputy chairman of Glencore Xstrata.
Hayward is the former head of the British oil giant BP who resigned from the company in the wake of the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.
He will now take the chairman’s role until a permanent replacement is found.
Trimming the fat
Bond had been criticised for his handling of the merger talks between the two companies, in particular for his proposal for a “golden handcuffs” deal worth $223 million for top Xstrata managers. He had already announced that he would step down once the board of the enlarged company had appointed a new independent chairman.
Bond issued a statement after the vote saying that he respected “the strong opposition of many people” to his handling of bonuses for Xstrata executives.
Three other Xstrata executives also failed to be elected to the board.
Xstrata CEO Mick Davis and its chief financial officer Trevor Reid had already resigned back in 2012, long before the merger was completed earlier this month.
All but two of the top positions in the new company are now held by former Glencore executives.
The on-line version of the Financial Times said Bond’s exit would give Glasenberg “a free hand to dramatically reshape Glencore Xstrata”.
He had already announced that he would make savings mainly by closing Xstrata offices and reducing “management layers”.
The company said the nominations committee would meet later on Thursday “to seek candidates for its board in addition to continuing a search process for a new chairman”. It added that the board would consult with its “major external shareholders” in this matter.
Glencore describes itself as “one of the world’s leading integrated producers and marketers of commodities”. Its headquarters are in the Swiss town of Baar.
Its activities have repeatedly come under fire from both human rights and environmental activists.
A group of non-governmental organisations called a demonstration outside the building where the AGM was held. They paraded with banners accusing the group of exploitation.
Australian activist Ginny Gerlach, director of KAFDA, a group opposing Xstrata plans to build a coal export terminal on Balaclava Island in Queensland, became a shareholder in Xstrata and travelled to Switzerland to present the group’s message at the AGM.
Although the new management has since announced that the planned terminal would be shelved because of poor market conditions – namely the falling price of coal – Gerlach still wanted assurances that the plan will not be revived if coal prices recover.
She explained to swissinfo.ch that the area in question is the largest river system feeding into the Great Barrier Reef.
“The habitat, once touched, cannot be rebuilt. The wounds cannot be mended. Once you build a port in that area it is destroyed. We have endangered species [including dolphin and turtle species] that we need to protect in that area,” she said.
“If Glenstrata wanted to develop a coal mine in the Swiss Alps the Swiss government would step up and fight, so they have the same obligation to maintain the same sort of standards in other countries. Big corporations are not tuned into the impact they have on communities so we are taking the community message to Glenstrata. Hopefully they will have the courtesy to listen to us.”
For its part, Xstrata has said it takes its responsibility for the environment “very seriously”.
“We will manage our mining operations with consideration for the local flora, fauna and waterways, and implement leading management practices and standards to minimise and manage any potential impacts from dust, noise and vibration, and to manage our greenhouse footprint.”
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