Shareholders in Xstrata prompted the resignation of the miner's chairman on Tuesday as they voted through a $31 billion take-over by trader Glencore but twice snubbed a controversial pay plan to retain key managers. Xstrata Chairman John Bond, formerly chairman of HSBC and Vodafone, would have been chairman of the new Glencore Xstrata.
Bond had been under fire for months over a 140 million pound ($223 million) "golden handcuffs" package for managers the Xstrata board said were key to operations, and over what some investors felt was an insufficient fight for better terms from Glencore, Xstrata's top shareholder. It took an unprecedented, activist stance from the Gulf state of Qatar, an unexpected kingmaker and second-largest shareholder in Xstrata, to force Glencore to improve the offer - just hours before a September shareholder vote, later cancelled.
At the shareholder meeting in the lakeside Swiss town of Zug activist investor Knight Vinke, also a top 25 Xstrata shareholder, accused the board of "governance failings" and said it had no confidence in its independence and robustness. Bond defended both the board and the retention plan. "Right now, there is $20 billion of your money invested in 20 projects and extensions," he told investors gathered for the votes. "It is the Xstrata management team that is responsible for making sure these investments are made safely, soundly and profitably."
But hours later he resigned, citing shareholder votes that had opposed every one of the Xstrata board's recommendations. "Following an overwhelming vote in favour from Glencore's shareholders, almost 79 percent of Xstrata's voting shareholders gave their support to the take-over - but without the pay deal.