Xstrata boss walks away with £14m – and use of company jet


Mick Davis, the chief executive of the coal miner Xstrata, is to leave with a £14.2m pay-off and continued use of the company's private jet, as its proposed merger with the commodities giant Glencore received the green light from a crucial regulator.

China's Ministry of Commerce has approved the £35bn deal, which means the long-running merger between the two FTSE 100 companies has cleared its final hurdle and should be completed next month. China's endorsement of mining's biggest merger is subject only to the enlarged group selling its assets in Peru's Las Bambas copper mine within three months, which Glencore has agreed to.

The two companies had been waiting for the Ministry of Commerce to rubber-stamp the deal and Glencore had said it expected to complete the takeover by 2 May if the Chinese gave it their blessing this week.

Mr Davis was to have led the merged company for six months before handing over to his opposite number at Glencore, Ivan Glasenberg, who will now take charge from the start.

The Xstrata chief's pay-off comprises £9.6m for the ending of his contract and £4.6m for half a year's work, including salary, bonus and pension allowance. Mr Davis has agreed to work as a consultant to the combined group until 30 June to help ensure an orderly handover. He will not get a monthly fee but will be entitled to 30 hours' private use of an Xstrata aircraft.

He will also take a sublease on Xstrata's luxury pad in central London until May 2017 at the same rent as the company is currently paying, although this includes a rent-free period until next March.

A source close to negotiations conceded that Mr Davis's arrangement over the jet would have "raised some smiles" around the City, but suggested that under existing contractual terms he would have probably enjoyed that access after leaving Xstrata anyway.

On Mr Davis being given a sub-lease on the office, the source added: "Glencore has no use for that London office, so it would have been a vacant office space liability on their balance sheet. To sub-let it to Mick is a sensible commercial arrangement."

Glencore had been hoping to avoid an exodus of staff from Xstrata but it emerged today that other senior executives are heading for the exit. Some of these will also stay on for six months to help with the handover.

Charlie Sartain, Xstrata's copper chief, Ian Pearce, its head of nickel, and Loutjie Smit, the interim boss of alloys, are all leaving with undisclosed pay-offs. Confirming previous speculation, Xstrata's finance director, Trevor Reid, is also stepping down, as is its head of strategy, Thras Moraitis. In March, it emerged that Mr Glasenberg is in line for the biggest windfall: his 1.09 billion shares are set to yield $173m (£113m) in dividend income after the group announced a 5 per cent increase in investor payouts to 15.75 cents a share for the year.

Shares in the merged company are expected to start trading on 3 May once the scheme of arrangement, approved by shareholders in both companies, is cleared by a UK court.

Glencore shares rose 4p to 325.1p while Xstrata gained 19.7p to 986p.

Arts and Entertainment
Eye of the beholder? 'Concrete lasagne' Preston bus station
architectureWhich monstrosities should be nominated for the Dead Prize?
Lizards, such as Iguanas (pictured), have a unique pattern of tissue growth
Anna Nicole Smith died of an accidental overdose in 2007
Life and Style
food + drink
Arts and Entertainment
'The Great British Bake Off' showcases food at its most sumptuous
tvReview: Bread-making skills of the Bake Off hopefuls put to the test
ebooksAn evocation of the conflict through the eyes of those who lived through it
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Quantitative Analyst (Financial Services, Graduate, SQL, VBA)

£45000 per annum: Harrington Starr: Quantitative Analyst (Financial Services, ...

Application Support Engineer (C++, .NET, VB, Perl, Bash, SQL)

Negotiable: Harrington Starr: Application Support Engineer (C++, .NET, VB, Per...

AIFMD Business Analyst / Consultant - Investment Management

£450 - £600 per day: Harrington Starr: AIFMD Business Analyst / Consultant - I...

Business Analyst Solvency II SME (Pillar 1, 2 & 3) Insurance

£450 - £600 per day: Harrington Starr: Business Analyst Solvency II SME (Pilla...

Day In a Page

Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape
eBay's enduring appeal: Online auction site is still the UK's most popular e-commerce retailer

eBay's enduring appeal

The online auction site is still the UK's most popular e-commerce site
Culture Minister Ed Vaizey: ‘lack of ethnic minority and black faces on TV is weird’

'Lack of ethnic minority and black faces on TV is weird'

Culture Minister Ed Vaizey calls for immediate action to address the problem
Artist Olafur Eliasson's latest large-scale works are inspired by the paintings of JMW Turner

Magic circles: Artist Olafur Eliasson

Eliasson's works will go alongside a new exhibition of JMW Turner at Tate Britain. He tells Jay Merrick why the paintings of his hero are ripe for reinvention
Josephine Dickinson: 'A cochlear implant helped me to discover a new world of sound'

Josephine Dickinson: 'How I discovered a new world of sound'

After going deaf as a child, musician and poet Josephine Dickinson made do with a hearing aid for five decades. Then she had a cochlear implant - and everything changed
Greggs Google fail: Was the bakery's response to its logo mishap a stroke of marketing genius?

Greggs gives lesson in crisis management

After a mishap with their logo, high street staple Greggs went viral this week. But, as Simon Usborne discovers, their social media response was anything but half baked
Matthew McConaughey has been singing the praises of bumbags (shame he doesn't know how to wear one)

Matthew McConaughey sings the praises of bumbags

Shame he doesn't know how to wear one. Harriet Walker explains the dos and don'ts of fanny packs
7 best quadcopters and drones

Flying fun: 7 best quadcopters and drones

From state of the art devices with stabilised cameras to mini gadgets that can soar around the home, we take some flying objects for a spin
Joey Barton: ‘I’ve been guilty of getting a bit irate’

Joey Barton: ‘I’ve been guilty of getting a bit irate’

The midfielder returned to the Premier League after two years last weekend. The controversial character had much to discuss after his first game back
Andy Murray: I quit while I’m ahead too often

Andy Murray: I quit while I’m ahead too often

British No 1 knows his consistency as well as his fitness needs working on as he prepares for the US Open after a ‘very, very up and down’ year
Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home