The Association of British Insurers issued a “red top” warning against retention payments promised to directors at Xstrata if the merger goes through, adding in a rare public statement it was concerned that the payouts “are in no way linked to performance”.
But the ABI, whose members own almost a fifth of the British stock market, said it had no opinion on the wisdom of the miner’s merger deal, only the pay awards attached to it.
Xstrata plans to hand over some £170m to 73 managers if they stick with the firm following the tie-up with commodities giant Glencore.
Chief executive Mick Davis is in the spotlight for his £30m reward for remaining in charge for three years.
Shareholders in Xstrata are due to vote on the merger on 12 July, and must approve the pay awards if the deal is to succeed.
“The key issue for shareholders is to evaluate the business and investment case of this merger and determine whether the merger ratio is fair for Xstrata’s shareholders,” a spokesperson for Xstrata said in a statement.
“Central to this evaluation are the governance and management arrangements which are integral to delivery of the investment case and minimise risk to our shareholders.”