City Veteran Sir John Bond Voted Off Board Of Glencore Xstrata

City veteran Sir John Bond has suffered the humiliation of being voted off the board of Glencore Xstrata at the £50bn commodity trading giant's annual general meeting in Zug, Switzerland.

Bond had been expected to chair the first AGM of the newly merged company, but handed control of the session to Tony Hayward, the former BP boss who is the senior independent director at the mining and commodity company.

For Hayward it was an unexpected return to the top of a FTSE 100 company following his departure from BP in July 2010 in the wake of the Gulf of Mexico oil spill, which has left the company with a mounting compensation bill. Hayward now looks likely to become interim chairman, although as chair of the nominations committee was supposed to be leading the search for a new chairman for the enlarged company.

Bond was a long-standing HSBC banker who retired in 2006 but took on a number of boardroom roles, including chairing telecoms company Vodafone before leaving that board to chair Xstrata in 2011. But he was criticised for his handling of the long-running merger talks between Xstrata and Glencore, particularly £240m of retention payments for 72 top Xstrata managers which, even after they were reduced, were voted down by shareholders of Xstrata.

Bond had originally been slated to chair the enlarged company but after the controversial deal was finally approved by Xstrata investors in November, Bond had said he "would instruct the board to commence an orderly process to appoint a new independent chairman of Glencore Xstrata. Upon the satisfactory conclusion of the search process, overseen by the Glencore Xstrata board nominations committee, I will step down."

His sudden announcement that he would be not be elected came just hours after an early morning notice to the stock exchange that a former Xstrata board member Sir Steve Robson had resigned without standing for re-election to the new board. A former Treasury mandarin, Robson has also sat on the board of Royal Bank of Scotland.

At the annual meeting Hayward went through procedures to withdraw the resolution regarding the election of Robson but all other resolutions were put to the vote.

From the outset the deal caused controversy and when it was eventually put to shareholders, a number of different scenarios were voted on because of the board's insistence that retention packages were needed for top managers. The vote on incentives for Xstrata executives was defeated while a second resolution asking investors to back a takeover without the pay scheme won 78.88% of votes, only just past the 75% threshold for the deal to be approved.

Xstrata's chief executive, Mick Davies, was originally going to stay on for six months with the enlarged company but is quitting now the deal is complete. He will lose perks such as 30 hours in Xstrata's corporate jet until the end of June and subletting Xstrata's Mayfair head office until March 2017. He has around £75m in shares and options.

Powered by article was written by Jill Treanor, for on Thursday 16th May 2013 12.42 Europe/London © Guardian News and Media Limited 2010


image: © C.P.Storm

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