Governance - Xstrata

126 | Governance
Remuneration report continued
respectively, are provided to the Group under a secondment
agreement entered into between the Group and XSL on 19 March
2002. Mick Davis and Trevor Reid were both seconded to the Group
for a fixed term of two years, with XSL and the Group subsequently
renewing for further two-year fixed periods.
The employment of Mick Davis and Trevor Reid may be terminated
by at least 12 months’ notice being given by XSL or the director
concerned or by a payment in lieu of notice by XSL. On termination
of their employment by XSL in breach, or on a change of control, or
if Mick Davis or Trevor Reid resigns in circumstances where they
cannot in good faith be expected to continue in employment, each
director is entitled to be paid a sum equal to 100% of his annual
salary plus retirement benefits and other benefits and his previous
year’s bonus (plus any accrued basic salary and expenses) and to
have all entitlements under his retirement benefit plans paid in
accordance with the plan rules. As both Mick Davis and Trevor Reid
participate in money purchase arrangements, it is not expected that
any significant additional liability would arise in respect of retirement
plan entitlements beyond that already accrued in the Group’s
accounts. For the purposes of calculating termination payments,
annual bonus is capped at 300% of annual salary (which is in any
event the maximum allowable under the Bonus Plan). The terms of
Mick Davis's and Trevor Reid’s contracts are considered to be in line
with those operated by other global businesses listed in London.
In addition, each of the executive directors is eligible to participate
in the Bonus Plan which provides that deferred amounts up to an
aggregate ceiling of 200% of salary remain payable in the event of
cessation of employment by reason of death, injury, ill health or
disability (in which case they are payable immediately) or retirement
(in which case they are payable on the normal vesting date). No
deferred amounts are payable in the event of cessation by dismissal
for cause. In the case of termination by reason of death, injury, ill
health or disability before the date the bonus is awarded for a
financial year, or if the Remuneration Committee in its discretion so
resolves, a proportion of the annual bonus pool may still be awarded
subject to the normal discretion of the Remuneration Committee.
Executive directors are entitled to any outstanding LTIP awards on
cessation of employment by reason of death, injury, ill health or
disability (in which case they vest immediately in full) or retirement
(in which case they are payable on the normal vesting date to the
extent they vest for performance at that time).
Santiago Zaldumbide provides his services to the Group under a
professional services agreement entered into between him and
Asturiana on 23 July 2007, pursuant to which Santiago Zaldumbide
agreed to act as Chairman and Chief Executive Officer of Xstrata Zinc.
This agreement continues indefinitely unless terminated by one of the
parties on at least six months’ written notice. The annual gross fee
payable to Santiago Zaldumbide for the year ended 31 December 2010
was €1,000,000. This annual fee is subject to review in line with the
other executive directors. Santiago Zaldumbide receives no retirement
benefits under the terms of his professional services agreement but is
eligible to participate in the Bonus Plan and the LTIP.
On termination of his professional services agreement, other than
on his voluntary termination or termination for gross negligence,
Santiago Zaldumbide is entitled to be paid a sum equal to 100% of
his annual salary and other benefits and his previous year’s bonus
(plus any accrued basic salary and expenses). Pursuant to a letter of
appointment dated 18 March 2002 and subject to the continuing
existence of his agreement with Asturiana, Santiago Zaldumbide is
engaged as a director of Xstrata. Santiago Zaldumbide receives no
additional remuneration for his position as director of Xstrata and is
not entitled to any compensation in respect of the termination of his
office as a director of Xstrata.
Non-executive directors
Willy Strothotte is engaged by the Group as a non-executive director
and Chairman on the terms of a letter of appointment. He will retire
from the Board and from the Remuneration Committee at the end
of the AGM on 4 May 2011.
David Rough is engaged by the Group as the Senior Independent
Director and Deputy Chairman on the terms of a letter of
appointment. The appointment may be terminated by six months’
notice by David Rough. The Group may terminate David Rough’s
appointment at any time and on such termination David Rough will
not be entitled to any compensation for loss of office. The term of
his appointment may be renewed by the Board. However, in
accordance with the UK Corporate Governance Code, all directors
will retire at the forthcoming AGM and all directors, other than Willy
Strothotte, will offer themselves for re-election.
Ivan Glasenberg, Dr. Con Fauconnier, Peter Hooley, Sir Steve Robson,
Ian Strachan and Claude Lamoureux are each engaged by the Group
as a non-executive director on the terms of a letter of appointment.
Each appointment may be terminated by six months’ notice by the
non-executive director.
Dr. Con Fauconnier’s appointment commenced on 5 May 2010.
Paul Hazen retired as a non-executive director of the Board at the
Annual General Meeting (AGM) in May 2010.
The Group may terminate each non-executive director’s appointment
at any time and on such termination the non-executive director will
not be entitled to any compensation for loss of office. Each term of
his appointment may be renewed by the Board.
There is no arrangement under which a director has agreed to waive
future emoluments nor have there been any such waivers during the
financial year.
There are no outstanding loans or guarantees granted or provided
by any member of the Group to or for the benefit of any of the
non-executive directors.
No significant awards have been made in the financial year to any
past director.