LONDON Scottish Widows Investment Partnership, one of the 10 largest investors in Xstrata XTA.L, has come out in support of the miner's proposed $33 billion takeover by Glencore (GLEN.L) and a revamp in pay plans designed to retain top talent.
Anne Fraser, head of corporate governance at SWIP which owns 1.1 percent of Xstrata, said on Friday her company backed both the deal's rationale and the new remuneration package, which has sparked anger from some investors for its size and scope.
"We are supportive of the merger and the revised incentive arrangements. The merger will bring together two different but complementary businesses," she said.
"In this particular case, it is our view that it will be important to retain the skills required to manage the combined assets and deliver the promised cost savings."
News of SWIP's voting intentions will boost spirits among the management of both Glencore and Xstrata as they enter the home straight of a controversial merger process.
But while support for the tie-up may be growing, some investors remain staunchly opposed to the idea of rewarding executives just to stay in their posts.
A second Xstrata investor, also among the 10 largest shareholders, blasted SWIP's decision to vote in favor of the remuneration report.
"We are voting against the remuneration, and anyone who isn't voting against the remuneration really ought to shut down their corporate governance departments and tell people that they just don't do (corporate governance) anymore," the investor said, speaking anonymously in line with a policy on pre-vote comments.
Xstrata shareholders are due to vote on the takeover on November 20.
(Reporting by Sinead Cruise; Editing by Mark Potter)