Glencore is proposing to change chief executive Gary Nagle's pay package so he can cash out long-term share awards more quickly if the UK-listed miner is taken over. The company is negotiating with shareholders to alter a change-of-control provision that could otherwise leave Nagle's shares unvested even if he leaves after a takeover. Under the plans, awards would vest if a rival buys Glencore and replaces him as CEO, though some shares would remain unsellable for years.
The move follows collapsed talks early this year between Rio Tinto and Glencore over a $260bn mega-merger. Nagle's remuneration is dominated by a “career shares award”; this year he received about $2mn in basic salary, with total pay of $7.5mn coming mainly from long-term incentives. The board set the award at 512.5 per cent of salary, 97.6 per cent of the maximum, and is proposing to lift the top of the 525 per cent range by slightly more than a tenth.
Glencore also plans a small fixed-pay rise for inflation; Nagle's $2mn fixed pay has been unchanged for three years. Rio Tinto has proposed a 56 per cent pay increase for chief executive Simon Trott, targeting nearly £10mn. Glencore shares have risen about 28 per cent this year as copper prices climb.
Source: Financial Times Companies · Summarized by HeadlinesBriefing