Glencore chief is unashamed about unacceptable bonuses « Mining Blog

Glencore chief is unashamed about unacceptable bonuses

11. June 2012,

The head of the world’s biggest commodities’ trading firm – and one of the globe’s most powerful mining companies – has “gone public” on an issue which is always sure to rile shareholders at large.

Glencore CE, Ivan Glasenberg, last week defended bumper executive pay, telling investors they had to pay for “entrepreneurial spirit”.

Glasenberg made the comment at an industry dinner, in advance of the company’s plan to take over UK mining company,Xstrata in a $30-billion purchase.

Some Xstrata shareholders have already called proposed retention payments for Xstrata’s top managers “excessive”, “unacceptable” and “depressing” -“stoking fears the backlash could threaten the all-share deal” as Reuters commented on June 8.

Glencore owns almost 34% of Xstrata and the deal to combine the two groups into a mining and trading powerhouse is expected to be voted through next month.

A week after Xstrata announced it would pay retention deals to 73 of its key employees, totalling more than £170-million, Glasenberg claims that shareholders needed to pay for managers that deliver returns, acting like shareholders rather than caretakers.

“[For a chief executive who does not own shares], to get him to have this entrepreneurial culture, to work like one of us, to chase every deal like we do, we are going to have to pay him,” Glasenberg said.

Glasenberg himself earns a modest salary compared to industry peers, but he also owns almost 16% of Glencore and made almost $110-million from last year’s final dividends alone.

Xstrata’s Mick Davis, meanwhile, is one of the best paid executives in the FTSE 100, taking home £5.4-million last year in salary, cash bonus and benefits – excluding long-term incentives, deferred bonuses and retirement benefits.

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