Anglo American axes bumper pay plan ahead of vote
Anglo American has shelved plans to give its top executives a bumper payday if it completes its planned $50bn (£38bn) megamerger with Canada’s Teck, in a dramatic climbdown ahead of a shareholder vote on Tuesday.
The FTSE 100 mining behemoth had sought investor approval for a motion to pay chief executive Duncan Wanblad a £8.5m bonus if its deal for Teck Resources passes regulatory and financial hurdles. Other executives’ pay packets were also set for an uplift.
Shareholders of both Anglo and Teck had been poised to vote on a range of resolutions at special meetings in London and Vancouver this week. Anglo argued that the revised remuneration packages were needed to retain its key staff “through a period of significant change”, when senior management would be required to operate at “exceptional performance”.
But the motion on pay was abandoned on Monday, the London-listed mining giant confirmed, after a string of shareholders and proxies came out in opposition to the proposals. In November, Institutional Shareholder Services – a UK-based group acting as the main proxy adviser for Anglo shares – recommended its clients approve the deal in the round but object to the pay resolution.
Anglo American fails to get pay packet past investors
Asset manager Legal & General also confirmed it planned to oppose the revamped long-term incentive plan (LTIP), saying it broke its remuneration policies.
Writing in an update to investors earlier this month, the pensions and insurance giant said: “While we understand the rationale for incentivising management to ensure the merger’s successful completion, which we support, we sought assurances and a clear indication of direction of future performance-based incentive plans, that would have enabled us to support these LTIP amendments.
“The company was not able to provide these assurances, and we will therefore be voting against resolution 2.”
In an update on Monday, Anglo said it had dropped the proposal after engaging “extensively with shareholders”.
“Anglo American strongly believes that the proposed amendment represents the most practical way to support the merger process and the principles and objectives set out in the circular,” it added.
“But, having reflected carefully on shareholders’ concerns, has therefore decided to withdraw resolution 2 from the agenda of the general meeting.”
The group announced the climbdown less than 48 hours before both sets of investors were due formally to endorse the deal to create one of the largest copper and iron ore producers in the world. The two mining giants – which will be called Anglo Teck once the deal is wrapped up – announced the tie-up in September, which is the first transaction between majors worth more than $20bn in over a decade.
As part of the deal, Anglo American top brass confirmed their intention to retain the company’s primary listing in London, but said they would shift their headquarters from the UK capital to Toronto.
The megamerger also follows a period of dramatic upheaval at the mining giant, which has been forced to unveil a major strategic overhaul after fending off a protracted set of hostile takeover bids from Australian rival BHP. It is in the process of offloading its celebrated diamonds business De Beers having already spun off its platinum arm, Valterra, in a bid to focus on copper and iron ore.