London, England — 27 June 2012 – Xstrata CEO Mick Davis may have to step down in an effort to rescue the mining group’s deal with commodity giant Glencore in the wake of a furious row over pay, a leading shareholder has warned.
Investors in Xstrata will be unable to vote in support of the £170 million retention package planned to keep Davis and other executives in their posts, said David Cumming, head of equities at Standard Life. The deal needs at least 50% of the vote to go in favour of the pay plan, reports MINING.com.
“The problem is that anyone voting in favour of this plan is voting to kill the ‘Shareholder Spring’ stone dead and, to be honest, will destroy any credibility they have in the governance arena, so I don’t think there’s going to be many supporters,” he told the BBC’s Today show. “On that basis the deal is in jeopardy.”
To save it, he added, “they’re almost going to have to hand over to Glencore, make it a takeover rather than a merger, and that might involve Mick Davis actually standing down.”
Xstrata declined to comment.
Source: MINING.com. For more information, click here.