Xstrata finance chief Reid to quit after completion of Glencore mega-merger

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.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Arts and Entertainment
Kara Tointon and Jeremy Piven star in Mr Selfridge
tvActress Kara Tointon on what to expect from Series 3
Voices
Winston Churchill, then prime minister, outside No 10 in June 1943
voicesA C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
News
i100
Sport
footballBrighton vs Arsenal match report
Arts and Entertainment
Benedict Cumberbatch has spoken about the lack of opportunities for black British actors in the UK
film
News
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Recruitment Genius: Outbound Sales Executive - OTE £25,000

£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Java Developer / J2EE Developer - Watford - £45,000 - £47,000

£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...

Ashdown Group: Marketing Product Manager - (Financial Services) - SW London

£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Day In a Page

Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project
Diana Krall: The jazz singer on being friends with Elton John, outer space and skiing in Dubai

Diana Krall interview

The jazz singer on being friends with Elton John, outer space and skiing in Dubai
Pinstriped for action: A glimpse of what the very rich man will be wearing this winter

Pinstriped for action

A glimpse of what the very rich man will be wearing this winter
Russell T Davies & Ben Cook: 'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'

Russell T Davies & Ben Cook: How we met

'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Bill Granger recipes: Our chef serves up his favourite Japanese dishes

Bill Granger's Japanese recipes

Stock up on mirin, soy and miso and you have the makings of everyday Japanese cuisine