Four-fifths of Xstrata (XTA) shareholders assented to the miner's $68bn (£42.7bn) merger with commodity trader Glencore (GLEN) this week while the same proportion voted against hugely generous retention incentives designed to keep key Xstrata management.
Investors revolted en masse against a proposed £140m pay package to about 70 of the Anglo-Swiss miner's top-level operational staff. Sir John Bond, Xstrata's chairman, will resign once the merger is completed in response to the vote, while chief executive Mick Davis is scheduled to leave the company after six months.
Only regulatory antitrust approvals are needed from Europe, South Africa and China for the megadeal to go ahead. The tie-up is the largest ever in mining and has the potential to dramatically alter the mining industry by creating a new mining superpower able to compete with the likes of BHP Billiton, Rio Tinto and Vale of Brazil.
But can Glencore's Ivan Glasenberg, a commodity trader above all else, win over Xstrata's mining staff and successfully manage a business that will derive some 80 per cent of its earnings from mining operations rather than trading?
