Xstrata, the mining group, recently confirmed a $33 billion bid from the trader Glencore after investor pressure meant that the company had to change the deal to make sure that the top managers did not sink the tie-up. Initially the company was insisting that it had to be sent to a shareholders vote, as the package was quite controversial. However, they backed off this insistence, and have let the deal go through.
Investors are going to be able to put their views across about the retention plan without making any threat to the merger, meaning that the deal is closer to its completion than it has been since it was first announced eight months ago.
Initially the company argued that its executives were going to be responsible for organising future profits, however board members recently stated that the changes to the bid, which put the Chief Executive of Glencore as the head of the company, meant that the executives were no longer responsible for this. This means that the plans are even more necessary in order to avoid the top executives leaving the company to go elsewhere.
There has been grumbling in the private and public sector from institutional shareholders such as Schroders, Legal & General and BlackRock about the various issues, and Xstrata has agreed to split these issues.
Some shareholders have complained that this is not enough of an attempt, and the 25th largest shareholder in the company, Threadneedle Investments have stated that they are firmly opposed to the deal, and have said that it is giving away the company very cheaply. Even though this company owns a very small part of the mining company, it is going to be a situation when it comes to voting, where every single vote counts, and so even small shareholders are having their opinions considered.