Xstrata's chief financial officer, Trevor Reid, is quitting the mining giant with a £5.45m pay-off after announcing his resignation just two weeks after it finally sealed its £56bn mega-merger with commodities trader Glencore.
Mr Reid, who helped transform the mining minnow into a FTSE 100 powerhouse during his 10-year stint as the right-hand man of chief executive Mick Davis, missed out on pocketing up to £11m more after investors rejected a proposed £140m package of retention bonuses for senior management to encourage them to stay on at the combined company for two years.
It is understood that Glencore's chief financial officer, Steven Kalmin, will take up the job instead. Mr Kalmin joined Glencore's coal unit in 1999 and was promoted to his current position in 2005.
Mr Reid, who also owns 647,365 Xstrata shares, valued at £6.6m at last night's closing price, said: "The next phase of Xstrata's evolution is now well under way and following shareholder approval for the merger with Glencore, I have decided to step down on completion of the transaction."
His departure comes at a tough time for the mining industry, which is being squeezed by a combination of falling prices and high labour and machinery costs, as the recession hits demand following a period of rapid expansion.
Mr Davis has also said he will quit the company after the merger, meaning that the key architects of Xstrata will both be leaving the group at some point next year.
Neither has said what they will do next, although Anglo American was quick to scotch rumours in October that Mr Davis would become its new chief executive, after Cynthia Carroll said she would quit the top job at the mining group.
Mr Reid's resignation also raises concerns among some investors that there could be further departures of senior Xstrata management following the shareholders' vote against the retention payments.
The payouts were so controversial that Xstrata chairman Sir John Bond dramatically fell on his sword as soon as investors approved the deal last month.
Mr Reid has been a key architect of the present day Xstrata, working alongside Mr Davis to transform the company from a $500m (£310.6m) ferrochrome and zinc business into a diversified mining group with a market value of $50bn in the space of a decade.
They did this by embarking on an acquisition spree which included 40 takeovers valued at more than $35bn – before crowning things with the Glencore deal.
Mr Reid, 51, will stay in his job until the deal clears the remaining regulatory hurdles, which is expected in the first few months of next year. He will work as a consultant for up to six months after Glencore Xstrata is formed, but will not take up the role of chief financial officer.
Xstrata and Glencore declined to comment on a likely replacement for Mr Reid.
He is entitled to his £5.45m termination package as part of his employment contract which provides for a payment of one-year's salary, bonus and other benefits if he ends his contract following a change of control at the company.
Shares in Xstrata fell by 8p to 1,025.5p, while Glencore's declined by 2.15p to end the day at 341.3p.Reuse content