Glencore’s Hayward “optimistic” shareholders will approve pay for incoming CEO, Gary Nagle

Tony Hayward, chairman, Glencore

GLENCORE chairman Tony Hayward said he was “optimistic” shareholders would approve a proposed pay package for incoming CEO, Gary Nagle, on April 29, the date of the group’s annual general meeting (AGM).

Proxy advisers Glass Lewis and Institutional Shareholder Services (ISS) last week recommended the rejection of the proposal in terms of which Nagel – who takes over from Ivan Glasenberg in July – would receive a maximum total compensation of $10.4m.

Nagle’s remuneration includes short-term incentives and the introduction of a restricted share plan (RSP), a form of long-term pay whereby shares are held by the employer for a certain period. Share rewards would account for 60% of the total.

Around 40% would be held back until two years post employment under the holding requirement, Glencore said in its annual report.

“We are disappointed that ISS and Glass Lewis have come out against it,” said Hayward in response to a question at a pre-AGM presentation today.

“We have spent an enormous amount of time over the last six months or so engaging with shareholders and we feel we came up with an overall package that was fair, balanced, and equitable with respect to our new CEO and shareholders,” he said.

ISS said the “… proposed pay package is considered excessive with a large proportion being non-performance-related, partly due to the introduction of an RSP. The package is driven by a salary of $1.8m which stands out as relatively high amongst peers”.

Hayward said the remuneration proposal had “… some very market-leading components which everyone has acknowledged”, including the holding period for the shares. “It has a lot of good things in it. We are not going to withdraw it from the AGM.”

Glencore should be judged on its ability to implement its new executive pay policy, he said. “If you don’t like how we are implementing the policy you can vote against it. Every year. I am optimistic we will see significant support for the proposal we have made.”

Shareholders and shareholder representatives peppered proceedings with questions about Glencore’s target to cut net emissions to zero by 2050. The group was also asked whether rising metal prices would encourage host governments to impose policies of nationalisation.

Glasenberg said nationalisation of mining assets was unlikely but that governments would start to demand higher rents as a result of the up-cycle. “We could see more people trying that,” he said, referencing comments earlier this week by Ian Rudd, the former prime minister of Australia.

“As was the case during the last resources boom, and the one before that, the super-profits earned by a handful of resource majors in this country are a giant rip-off of the Australian people,” Rudd was quoted to have said on Wednesday.