LONDON (Reuters) - Xstrata’s XTA.L veteran finance director has decided against remaining at the miner after its takeover by Glencore, becoming the first top manager to announce his departure since shareholders sealed the $31 billion (19 billion pounds) deal.
Former banker Trevor Reid is one of a handful of executives who built Xstrata into a $50 billion (31 billion pounds) diversified mining group over the past decade, and he had been due to stay on as chief financial officer after the merger with Glencore (GLEN.L), the world’s largest diversified commodities trader.
But his position has been in doubt since Mick Davis, the miner’s long-serving chief executive, was replaced at the helm of Glencore-Xstrata by Glencore’s current boss, Ivan Glasenberg.
While not unexpected given his close partnership with Davis, Reid’s departure could revive the debate over the risk of significant departures from Xstrata after investors voted down a controversial 140 million pound ($225 million) retention plan for its managers.
Under his two-year retention deal, Reid would have received almost 11 million pounds ($17.7 million) by 2014.
Reid is expected to be replaced by Glencore’s chief financial officer, Australian Steven Kalmin, who had been due to be Reid’s deputy, a source familiar with the matter said.
Reid, who will stay on as a consultant for six months to help with the integration, is the third of Xstrata’s top three figures to announce his departure.
Chairman John Bond said late last month he would step down, just hours after shareholders ignored his recommendations and twice voted against the pay plan he had supported.
Davis’ departure was announced in September, after Glencore’s Glasenberg became the nominated chief executive of the combined group following a deal that improved the terms of the takeover. Davis, one of the best-known names in the industry, announced he would leave after the deal was done.
Industry sources and analysts played down fears of an “exodus” at Xstrata on Tuesday.
“Glencore knows how to look after their own,” said one analyst who declined to be named, adding retention deals would likely be struck individually with key executives.
Departures could hurt Xstrata as it moves from a period of growth driven by deals into a period of growth driven by its own mines, with several large, complex projects coming through.
Several senior Xstrata executives have sold shares in recent days - taking advantage of a window of opportunity after what was virtually a year-long offer period - including zinc boss Santiago Zalumbide and copper chief Charlie Sartrain.
Reid was brought in by Davis at Xstrata’s inception in 2001. The two sketched out what would become Xstrata in the back of a taxi and started in a JP Morgan basement. With a tight-knit team of executives, they built the company from a $500 million ferrochrome and zinc business into a global, diversified miner.
“Eleven years ago, I persuaded Trevor to leave a successful banking career to embark upon the transformation of a struggling company in a precarious financial position with limited options,” Davis said.
“Xstrata’s evolution ... has exceeded even our initial ambitions and is a testament to Trevor’s skills and contribution as an executive director and CFO.”
At 1430 GMT, Xstrata shares were down 0.6 percent at 1,027.5 pence, while Glencore's were down 0.4 percent at 342 pence, both lagging a slightly firmer UK benchmark FTSE-100 index .FTSE
($1 = 0.6213 British pounds)
Reporting by Clara Ferreira-Marques; Editing by Paul Sandle and Mark POtter