* Bond ousted as chairman, fails to gain reelection at AGM
* Three Xstrata directors also voted out, one resigned
* BP's Hayward to be interim chairman
By Clara Ferreira-Marques and Emma Farge
LONDON/ZUG, Switzerland, May 16 A shareholder
coup at newly merged commodities group Glencore Xstrata
ousted its chairman and all former Xstrata directors on
Thursday, replacing him with former BP boss Tony Hayward,
excoriated for his role in the Gulf of Mexico oil spill.
The move returns Hayward to the limelight at one of London's
largest firms, while Sir John Bond, the former chairman of
Xstrata and British blue chips HSBC and Vodafone, suffered the
ignominy of an 81 percent vote to unseat him.
Bond, who had drawn fire from shareholders for backing a
generous retention package for Xstrata executives in the run-up
to the takeover, announced his failure to be re-elected at the
start of the new group's first annual general meeting, with a
comment so brief many people in the room did not realise he was
Hayward, already a director, will fill the role until a
replacement is found and will run the nominations committee, key
as Glencore rebuilds its board. He is not in the running to take
the job permanently.
The abrupt clean-up at the top hands Glencore a freer hand
to restructure the $68 billion group as it begins a three-month
evaluation period after the acquisition of Xstrata closed
earlier this month.
It also puts paid to any lingering notion that the deal was
a combination of equals and raises questions about whether new
directors can be strong enough to act as effective
counterweights to Glencore's pugnacious chief executive and
largest shareholder, Ivan Glasenberg.
"It was an odd transition, yes, but it was a takeover, so it
was never going to be gentle," said one industry analyst, who
declined to be named.
Glencore, though, was at pains on Thursday to assure
shareholders it would go through an orderly process to find
suitable candidates for director roles and the top job. It will
bring in external advisers, invited shareholder feedback and
said Hayward would return to his role as senior independent
director once a chairman was found.
Anne Fraser, Head of Corporate Governance at 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.
The chairman would then be well placed to lead a refreshment of
Glencore was criticised in 2011, at the time of its listing,
for its appointment of Hong Kong veteran and colourful former
legionnaire Simon Murray as chairman. Analysts and investors
questioned whether he could keep Glasenberg in check and
represent minority shareholders.
Murray was replaced by Bond after the Xstrata takeover.
Corporate governance has been a growing concern in a
London-listed mining sector tainted by shareholder and boardroom
tussles like those at ENRC and Bumi.
Investors and analysts had expected Glencore to put its
stamp on the combined miner and trader following the mining
industry's largest takeover, but Bond's ousting with immediate
effect was unexpected as he was already due to leave.
"The time to do this would have been before the meeting, to
give people time to respond," analyst Paul Gait at Sanford
Bernstein said. "It does speak of an organisation for whom this
is a relatively new process."
The scale of opposition to Bond's nomination was evidence of
what one analyst described as the disgruntlement of investors
still reeling from the failure of Xstrata's board to secure the
best price. That role fell to top shareholder Qatar.
Shareholders also voted against the re-election of three
other Xstrata directors - Con Fauconnier, Peter Hooley and Ian
Strachan. A fourth director, Steve Robson, resigned earlier.
Bond, a former banking heavyweight, had agreed last November
to stand down as chairman after criticism over the 140 million
pound ($223 million) "golden handcuffs" package for key Xstrata
"I recognise and respect the strong opposition among many to
the retention arrangements which the board felt appropriate to
ensure management stability," he said.
Glencore managers own almost 25 percent of the group, making
them the largest group of shareholders, but under the terms of
the merger Glasenberg could not oppose Xstrata directors.
Thursday marked the end of an era for veteran Bond, but for
Hayward, who was ousted from BP after a series of gaffes during
the Deepwater Horizon oil spill in 2010, the appointment at
Glencore, albeit temporary, furthers his comeback since his
appointment to the Glencore board in 2011.
A new chairman is expected to be appointed by the end of the
year, a second source with knowledge of the matter said.