Melbourne, Australia — 22 November 2012 – The resignation of Xstrata chairman Sir John Bond, and the already known news that its CEO, Mick Davis is to leave, has triggered fears that without retention salaries, key Xstrata staff will abandon the newly formed Glencore-Xstrata.
Miningmx reports that Sir John said yesterday that once the merger parties had seen through the remaining anti-trust hurdles left to the transaction “’ chiefly the approval of the European Commission and Chinese authorities “’ he would ask the board to begin the search for a new chairman.
Davis said the decision of shareholders to vote down salary retentions introduced unnecessary risks into the combined business. He was commenting on the possibility that key Xstrata staff would not be incentivised to stay at Glencore-Xstrata.
The departures of Sir John and Davis, with the prospect of more, has also alerted analysts as to how the new Glencore-Xstrata will tackle the question of corporate governance, especially the balance of the company’s board. Six of the 11 board representatives are from Xstrata.
Already, there have been comments among shareholders that corporate governance is a worry, even without any more Xstrata staff leaving.
Cited by BDLive, one large Xstrata shareholder, asset manager Knight Vinke, said at the meeting to vote on the merger of the two companies yesterday that it had no confidence in the "independence and robustness" of the board, and had voted against the deal.
“We are extremely concerned with regard to the ability of the board of the newly merged company to represent our interests,” said David Trenchard, vice-chairman of Knight Vinke. “Good governance must now take centre stage and we intend to broaden our discussions with fellow shareholders to ensure that this is the case.”
Source: Miningmx. For more information, click here.