Glencore began looking for a new boss after Tony Hayward announced that he would step down from his position at the Swiss mining company and commodity trader next year.
The decision, published in the group’s annual report on Thursday, signals a change of custody at the London-listed company, whose longtime CEO Evan Glasenberg will step down in June to continue the transition to a younger generation of executives.
Hayward, a former BP managing director, joined Glencore’s board of directors in 2011 and should have resigned under the UK’s corporate governance act.
However, major shareholders agreed to extend his tenure so that he can oversee the company’s succession and respond to multiple investigations into suspected bribery and corruption.
Glencore is facing investigations in Switzerland, Brazil, the United Kingdom and the United States as the Ministry of Justice is investigating possible corruption and money laundering in Nigeria, Venezuela and the Democratic Republic of the Congo.
“We have consulted with a number of our major shareholders on this matter and they support the second and final extension of my term of office as recommended by the board of directors to shareholders,” Hayward said in the company’s annual report released on Thursday. I will resign at the general assembly meeting next year at the latest. The search for my successor continues. ”
Glencore usually holds its annual meeting in April or May.
News of Hayward’s departure came when Glencore revealed the salary package of its new CEO, Gary Nagle, who currently runs the coal business.
He receives a starting salary of $ 1.8 million plus $ 50,000 in supposed benefits and can earn up to $ 10.4 million annually with a goal-based bonus. However, the maximum amount he will receive in a year is $ 6.4 million as 40 percent of his bonuses will be delayed for up to two years after their stoppage, according to the Glencore Bonus report.
Glencore has only had three senior executives since its inception in 1974, and Nagle, one of Glasenberg’s subjects, will be the first president to enter into traditional compensation arrangements where the majority of his salary comes from short and long-term incentive plans.
Because of his 9 percent contribution to the company, Glasenberg, who has headed the company since 2002, receives only a base salary of $ 1.5 million. Most of his salary comes from the dividend payment that Glencore has just restarted. These funds have averaged $ 152 million annually since the company went public in 2011.
In a recent report, analysts at Barclays Bank said rewarding the CEO through short and long-term bonus plans would give Glencore’s board “much more leverage in setting strategy”.
They said, “We believe the change in CEO of Glencore is likely to be a major turning point that will allow the company to move to a more traditional governance framework.”
Glasenberg said he has no plans to become the next president of the company and is casting a “shadow over his successor”. He also plans to keep his stake in Glencore.
In its annual report, Glencore also announced that it had appointed Daniel Silver, its chief compliance officer, last year.
Glencore, who recently appointed former Anglo-American CEO Cynthia Carroll to its board of directors as a non-executive director, isn’t the only major mining company looking for a new boss.
Rio Tinto is also seeking to appoint a new chairman to replace Simon Thompson, who will step down next year to protest the mining company’s destruction of a 46,000-year-old sacred site in Western Australia last year.