Glencore Xstrata Chairman John Bond Voted Out at First AGMJesse Riseborough
Glencore Xstrata Plc Chairman John Bond was voted out by shareholders at the first annual general meeting of the world’s biggest exporter of power-station coal.
Bond told the meeting today in Zug, Switzerland he didn’t have enough votes to be re-elected and handed over the meeting to Tony Hayward, a fellow board member. Hayward, the former BP Plc chief executive officer, will be appointed interim chairman, according to a person familiar with the plan, who asked not to be named as the information isn’t public.
Bond said in November he wouldn’t take on the role of chairman as planned and would leave after the board created from Glencore’s takeover of Xstrata Plc found a replacement.
Glencore completed a $29 billion acquisition of Xstrata this month to create the world’s fourth-biggest miner, with a market value of about $67 billion. The resignation of Bond, 71, and director Steve Robson, who also announced he was quitting today, adds to a list of Xstrata executives who departed in recent months as the completion of the takeover neared.
Shareholders also vote today to elect Ian Strachan, Con Fauconnier and Peter Hooley to the board. CEO Ivan Glasenberg must vote for all directors under conditions of the takeover. Glencore management own 25 percent of the company.
Glencore was little changed at 333.85 pence by 11:00 a.m. in London trading.
Robson will step down immediately and a resolution to vote on his election to the board at the meeting has been withdrawn, the Baar, Switzerland-based company said in a statement. Robson was a non-executive director of Xstrata Plc from 2002 and among three members of the Glencore Xstrata nominations committee, along with Bond.
Mick Davis, the 55-year-old former CEO of Xstrata, said last month he won’t serve six months in the role at the new company before handing over to Glasenberg as previously announced.
Senior Xstrata executives including Charlie Sartain, head of copper, nickel chief Ian Pearce and Loutjie Smit, interim CEO of Xstrata alloys, have also departed. Strategy and corporate affairs head Thras Moraitis and chief legal counsel Benny Levene will leave after acting as consultants for six months.
Xstrata Chief Financial Officer Trevor Reid said in December he won’t stay on at the combined company.
Bond announced his intention to resign after investors defied the Xstrata board’s recommendation to approve a 144 million-pound ($219 million) package of retention bonuses for about 70 Xstrata managers.
The proposed payments were criticized for being offered without any performance criteria. Xstrata in June amended the package, making all bonuses payable in shares and linking payments to the executives to cost-saving targets.
Bond was chairman of Vodafone Group Plc from 2006 until
2011. He had held the same post at HSBC Holdings Plc after joining the lender more than 40 years earlier.
Glencore Xstrata has interests in about 35 coal mines in Colombia, Africa and Australia, accounting for about 10 percent of global seaborne supplies of the fuel. It is the fourth-biggest producer of mined copper and third-largest in nickel, and employs about 190,000 people in more than 50 countries across its industrial and trading divisions.
Glasenberg told analysts this month he expects to generate synergies “well above” the stated target of $500 million a year. He plans to close Xstrata’s Zug and London offices, and plans regional centers in Sydney, Johannesburg, Toronto, Stamford and Singapore.
The group may save $150 million a year by eliminating Xstrata’s London office, Credit Suisse Group AG analysts said this month. They estimate possible cost savings of $1 billion a year by 2015.
The company has retained two former Xstrata executives as division heads among its 14 senior managers.
“We expect Glencore senior management to dominate the new board and we expect them to impose Glencore’s leaner corporate structure,” Liam Fitzpatrick, Michael Shillaker and James Gurry, analysts at Credit Suisse, wrote in a report this month. The new company may cut duplication and management costs by $200 million to $300 million a year at its copper, coal and zinc units, they said.