The top five directors in Glencore will collectively pocket about $410 million (£270 million) in dividends after the commodities trading giant - and its impending merger partner Xstrata - both revealed tumbling profits for 2012.
Glencore chief executive Ivan Glasenberg is in line for the biggest windfall, with his 1.09bn shares set to yield $173 million in dividend income after the group announced a 5% increase in investor payouts to 15.75 cents a share for the year.
His payout comes against a backdrop of rising costs and falling prices across the commodities industry, as miners suffer from overcapacity at a time of weak demand.
Glencore today reported a 25% drop in profits to $3.1 billion, while its merger partner, Xstrata, unveiled an even bigger 37% decline, to $3.6 billion.
Including writedowns, the companies’ fortunes declined even further last year, with Xstrata’s profits falling by 79% to $1.2 billion after the miner took $2.6 billion of impairment charges, including writedowns on its stake in troubled South African platinum miner Lonmin and some of its other nickel and zinc assets.
Meanwhile, adding exceptional items to Glencore’s bottom line results leaves profits 75% lower than in 2011 at $1 billion. A $1.2 billion charge relating to impairment costs relating to its holding in Russian aluminium producer Rusal was the main reason for the decline.
Glencore said it hoped to complete the £56 billion mega-merger it has agreed with Xstrata by April 16. The completion date has been pushed back three times as the companies wait for the Chinese authorities to rule on the deal. The companies have received clearance from their own shareholders and the other regulators.
The other main beneficiaries of Glencore’s dividend increase are Daniel Mate Badenes and Telis Mistakidis, the co-heads of the copper division, who will get about $65 million apiece.
Meanwhile, coal director Tor Peterson will pocket about $57 million and head of oil trading Alex Beard will trouser around $50 million.
Glasenberg declined to give an update on how Glencore and Xstrata would look after the merger until the deal is completed.
However, he said opportunistic acquisitions were not off the agenda, adding that Glencore could stand to benefit as a new generation of bosses at major mining companies sold off their peripheral businesses.
“Those opportunities will be there — that is something new in industry,” he said.
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