Miner Xstrata sought to win over waverers to the merits of its $39 billion takeover by commodities trader Glencore, telling shareholders to back the "fair and reasonable" offer even as investors flexed their muscles by expressing opposition to its pay plan, Reuters reported. The structure of the deal, which requires at least 75 percent of shareholders excluding Glencore to approve it, means opposition from investors representing just over 16.5 percent of Xstrata's total shareholding would be enough to derail it. Industry analysts believe the deal will ultimately succeed but Xstrata nevertheless faced a taste of opposition from a subdued crowd of investors, as 36.5 percent of those voting rejected its pay plan, up from a hefty 31.7 percent no vote last year. Including shares withheld, 39 percent failed to back the plan. Mick Davis, Xstrata's chief executive, is one of the best paid top executives in the FTSE 100, taking home $5.4 million pounds last year in salary, cash bonus and benefits - excluding long-term incentives, deferred bonuses and retirement benefits that could more than triple that if he hits set targets. Davis has agreed to forgo a "change of control package" that would normally have been triggered by the takeover, but he is still expected to get a hefty shares package to ensure he stays on after the deal, a potential flashpoint for opponents to the merger. The package is expected to be detailed in a circular to shareholders due later this month. Xstrata, one of the world's largest thermal coal exporters and the fourth-largest copper miner, earlier reported a "strong" financial performance from the start of the year, despite a drop in first-quarter copper output as it replaces ageing operations. Investors have kept a close eye on miners' major projects as costs soar and timetables stretch, but Xstrata said all major projects were making good progress and remained on schedule, with its flagship greenfield Koniambo ferronickel production in New Caledonia on track for the second half of 2012. Some Xstrata investors have said the miner's growth profile, which includes Koniambo, but also Peruvian copper projects and a zinc-lead-silver mine in Australia, should mean a higher offer from Glencore, which agreed in February to pay 2.8 new Glencore shares for every Xstrata share owned. -- SPA
