Shareholder revolt forces Bond to hand chairmanship of annual meeting to former BP boss Tony Hayward
One of the most dramatic shareholder revolts in recent years was staged on Thursday when City veteran Sir John Bond was ousted from the board of Glencore Xstrata and replaced as chairman by Tony Hayward, the former BP boss whose reputation hit rock bottom during the Gulf of Mexico oil spill.
The humiliation of Bond marked an extraordinary comeback for Hayward, who was forced out of BP in July 2010 after mishandling the Deepwater Horizon spill and had looked destined for a long period in the corporate wilderness.
But in a dramatic scene at the start of the first annual meeting of the newly formed FTSE 100 commodity trading and mining house, Hayward was promoted from senior independent director to interim chairman and Bond was left scrambling to repair the damage to his reputation caused by the negotiations to sell Xstrata to Glencore.
The once-disgraced BP boss is now temporarily chairing a FTSE 100 boardroom that has been stripped of four other non-executive directors – all formerly of Xstrata – who were also ousted on Thursday. Investors had been angered at the way Xstrata had been sold with huge additional pay awards – initially of as much as £240m – designed to retain the services of 73 of the mining group's managers.
At BP, Hayward infuriated Americans when he said "I want my life back" in the aftermath of the explosion and oil spill that killed 11 people. It also caused pollution across the Gulf of Mexico and left the company with a compensation bill of at least $40bn.
Hayward had begun his rehabilitation at cash shell Vallares, now spun into the Kurdish oil company Genel, which he runs. He took on the non-executive position at Glencore after it floated two years ago and began its courtship of Xstrata.
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| Sir John Bond was chairman of HSBC and Vodafone before joining Xstrata. |
Bond had been chairman of Xstrata and was to chair the enlarged company until a successor was found, but he stunned the first annual meeting of the new company by revealing he had failed to be elected by big institutional investors, which voted by proxy ahead of the meeting.
In scenes rarely witnessed at any company, Bond handed control of the session to Hayward as the meeting began, saying it was the "right thing for me to do". The scale of opposition later became clear: 80% of investors voted against him, a scale of rebellion that shareholder advisory group Manifest described as unprecedented.
The 71-year-old former HSBC banker later issued a statement in which he acknowledged that the retention payments for Xstrata managers had caused the revolt. "I recognise and respect the strong opposition among many to the retention arrangements which the board felt appropriate to ensure management stability," said Bond.
Three former Xstrata boardroom colleagues – Con Fauconnier, a former mining executive; Peter Hooley, the former finance director of Smith & Nephew; and Ian Strachan, the one-time boss of engineer BTR – were all also voted down. The other non-executive from Xstrata who had been due to sit on the board, former Treasury mandarin Sir Steve Robson, refused to allow his name to go forward for the vote.
Bond, one of the most senior figures in the City, admitted the takeover had been "complex and protracted, hence the anomalous situation today of my being up for re-election when I had anticipated departing with my successor in place".
He had taken on a number of high profile roles after retiring from HSBC in 2006, including chairing Vodafone until 2011. He then joined Xstrata, where his tenure was dominated by the controversial tie-up with Glencore. The deal was subject to a number of renegotiations beforefinally being approved in November.
His announcement that he would be not be elected came just hours after an early-morning notice to the stock exchange that Robson had resigned without standing for re-election to the new board. Robson was also on the board of Royal Bank of Scotland when it nearly collapsed.
Just four directors are left on the Glencore Xstrata board, a fact that immediately sparked anxiety that Ivan Glasenberg, the founder of Glencore, would wield too much control. One investor said: "It's a real mess, and unhelpful for building investor confidence."
Glasenberg had agreed to vote his 8% stake on the company in favour of all the members of the board.
Sarah Wilson, chief executive of Manifest, said the board might find it difficult to attract non-executive directors. And Anne Fraser, head of corporate governance at fund manager SWIP, one of the group's largest 10 shareholders, said: "What matters now is to secure the appointment of an independent chairman who commands the support of both external and internal shareholders."
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Article source : http://www.guardian.co.uk 
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