A number of Glencore shareholders have failed in their bid to drill through the opacity surrounding senior executives' pay structures.
Royal London Asset Management, which owns a 0.57 per cent stake in the mining giant, spoke out yesterday about the lack of transparency regarding the remuneration of certain non-board directors.
It hoped to use the annual general meeting (AGM) to oust the chairman and change remuneration policy.
“We expect the payout is quite high, and we have no visibility in terms of what these executives are being incentivised on,” said Royal London's corporate governance manager Ashley Hamilton Claxton. “There is no visibility on what key executives are being incentivised to do.”
However, only 4.92 per cent of shareholders voted against the current chairman Tony Hayward, slightly shy of the five per cent which Claxton says may have forced the board to consider his position.
An even more meagre 1.8 per cent voted to scrap the remuneration policy, way below the 50 per cent it would have taken to force a rewrite.
Royal London, along with other small shareholders, held concerns that the finance director – despite attending most board meetings – was not a formal member of the board and so was not obliged to disclose his pay.
“All finance directors in the UK serve as formal members of the board, and have a formal vote and a formal say. So the fact that this financial director at Glencore is attending and participating but isn't actually a member is a concerning structure,” said Claxton.
Shareholders at the AGM also raised questions about the fatality rate at Glencore, following the death of 16 workers last year, and the company's environmental policy.
The company's biggest shareholders include Qatar Holding with nine per cent, chief executive Ivan Glasenberg with 8.42 per cent and Harris Associates with 4.94 per cent.
Earlier this week, London-listed Glencore approached US grains trader Bunge, interested in a possible takeover.
Bunge's chief executive has previously expressed support for the idea of a major tie-up.