Reuters: Financial Services and Real Estate: UPDATE 1-Xstrata CEO to get $46 million retention package

Reuters: Financial Services and Real Estate Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 1-Xstrata CEO to get $46 million retention package May 31st 2012, 16:50 Thu May 31, 2012 12:50pm EDT * Glencore confirms $30 bln all-share bid for Xstrata in documents * Glencore shareholders to vote on July 11, Xstrata shareholders vote on July 12 * Xstrata, Glencore to pay almost $200 million for advice LONDON, May 31 (Reuters) - Xstrata Chief Executive Mick Davis has been offered a three-year retention package worth almost 30 million pounds ($46 million) to stay on at the helm once the miner joins forces with trader Glencore in one of the sector's largest ever deals. In a document sent out to shareholders and detailing the terms of the $30 billion all-share takeover bid by Glencore , Xstrata said retention deals for 73 of its key employees would total more than 170 million pounds. All managers and senior executives other than Davis will be offered two-year packages to stay on. The payments, particularly the sum offered to Davis, who is one of the best-paid chief executives in the FTSE 100, could irk some of Xstrata's more reticent shareholders, after more than a third of voting shareholders rejected pay plans at Xstrata's annual shareholder meeting earlier this month. But Xstrata told its shareholders the retention payments were "key" to the success of the merger. "These arrangements depend upon retaining the core senior management of Xstrata, given that more than 80 percent of the combined group's income will be derived from its operating assets, and are the reason why the retentions were provided for as part of the transaction." Shareholders cannot approve the deal without approving the pay packages, it said. Documents sent out to investors on Thursday, which also include Glencore's prospectus for the issue of new shares, confirmed Glencore's offer of 2.8 new shares for every Xstrata share held, to conclude its long-standing plan to create an integrated mining and trading powerhouse. At current prices, given Glencore is already Xstrata's single largest shareholder with an almost 34 percent stake, that all-share offer values the takeover bid at $30 billion. Glencore and Xstrata have long been expected to tie the knot, but the two sides will be paying as much as $200 million in fees to advisers, from banks to public relations consultants and lawyers. Banks will receive up to $130 million. Glencore is being advised by Citigroup, Morgan Stanley, Credit Suisse and BNP Paribas. Xstrata is being advised by Deutsche Bank, JP Morgan, Goldman Sachs and Nomura, with a role also for Barclays Capital. Both sides were advised by an independent consultant, former Citi banker Michael Klein, who shuttled between executives to broker the deal. Link this Share this Digg this Email Reprints

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