ABI condemns Xstrata's executive retention bonuses
Xstrata plans to hand more than £170 million to its top 73 managers
By CFOWorld staff | CFO UK | Published 13:02, 21 June 12
One of the UK’s largest shareholders on Thursday criticised miner Xstrata’s plans to pay executives large retention bonuses to persuade them to stay on after the planned merger with commodities trader Glencore.
The Association of British Insurers, an influential shareholders body for the insurance industry, issued its highest alert – a red top – over Xstrata’s pay plans.
"The ABI is always sceptical about the effectiveness of retention payments," it said in a statement.
"In this case we have raised further concerns around the significant retention awards being offered to Xstrata executives which are not linked in any way to performance."
Xstrata plans to hand more than £170 million to its top 73 managers on the grounds that their expertise is critical to future profit.
ABI members own about 17 percent of the British stock market.
Two of Xstrata's top 10 shareholders – Standard Life and Fidelity Worldwide Investment – have already voiced their opposition to the planned bonus payment calling it “unacceptable” and saying it “should be opposed”.
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