Wednesday 6 June 2012

Big Bucks for Big Mick!

The long running Xstrata / Glencore saga was in the news again a few days ago for the size of the financial package that Mick Davis (Xstrata CEO) is being offered . He has been offered bonuses worth £30 million just to stay when the two companies merge! Other senior managers at the company are also being offered attractive financial packages to encourage them to stay. You can read about it in this report from the Metro newspaper:

This issue fits nicely with bullet point 5 on the impact of mergers on stakeholders (remember …………the Xstrata shareholders have already made protests at the perceived undervaluing of Xstrata). If you were to use this example in an essay you could contrast the impact of the merger on one group of stakeholders (the 172 senior managers in Glencore/Xstratsa being offered retention deals) to the response of the shareholders who feel ripped off. In these times of recession it is becoming more common for shareholders to speak out when executive pay appears excessive, particularly if company performance does not seem to justify high rewards.

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