There are more casualties coming out of the Glencore-Xstrata merger as the chairman of Xstrata and all former Xstrata directors were cast out of their position.
A shareholder vote at newly merged commodities group Glencore Xstrata removed Sir John Bond, former chairman of Xstrata and British blue chips HSBC and Vodafone, after 81 per cent voted to dethrone him.
Former BP boss Tony Hayward, who gained notoriety for his part in the Mexico oil spill, will replace Bond, according to Reuters.
Bond had attracted the ire of shareholders when he supported a magnanimous retention package for Xstrata executives as the takeover grew closer.
A former banking giant, Bond agreed to step down last November after drawing fire over the US$223 million ‘golden handcuffs’ package for the main Xstrata managers.
He announced he was not re-elected at the start of the new company’s first annual general meeting.
But his announcement was so short many did not realise he was leaving.
Hayward, already a director, is a temporary replacement until a permanent one can be found. He will run the nominations committee.
Yesterday, Glencore Xstrata announced the resignation of Sir Steve Robson, saying the resolution to re-elect him will be withdrawn at the Annual General Meeting.
With the sudden departures at the top, Glencore can now restructure the US$68 billion group as it commences a three-month evaluation phase after its merger with Xstrata.
It also questions the belief the deal was a merger of equals and brings up issues about whether new directors can be strong enough to counterbalance Glencore’s aggressive chief executive and largest shareholder, Ivan Glasenberg.
Shareholders are not convinced of Glencore’s process to find suitable replacements for director roles and the top job.
“What matters now is to secure the appointment of an independent chairman who commands the support of both external and internal shareholders. The chairman would then be well placed to lead a refreshment of the board,” Anne Fraser, head of corporate governance at SWIP, one of the group’s largest 10 shareholders said.
Glencore drew fire in 2011, when it was listed, for selecting Hong Kong’s former legionnaire Simon Murray as chairman. Analysts and investors doubted whether he could curb Glasenburg and become a representative for minority shareholders.
Bond took over Murray’s job after the merger.
Investors and analysts are surprised by Bond’s ousting, especially as his departure was already in the offing.
“The time to do this would have been before the meeting, to give people time to respond,” analyst Paul Gait at Sanford Bernstein said.
“It does speak of an organisation for whom this is a relatively new process.”
Another analyst said Bond’s ousting showed investors were still devastated that Xstrata’s board could not secure the best price. That role fell on top shareholder Qatar.
Shareholders also ousted three other Xstrata directors Con Fauconnier, Peter Hooley and Ian Strachan.