GADFLY: Davis as next Rio Tinto head could be divisive
Mick Davis drew criticism when CEO of Xstrata and if made CEO at Rio Tinto will need to win the trust of investors, writes Chris Hughes
London — The short list for the next chairperson of Rio Tinto will incense the corporate governance crowd. At the top is Mick Davis, former CEO of Xstrata. His association with high boardroom pay makes him a divisive candidate. Davis drew criticism at Xstrata for remuneration well above industry norms. The attacks came to a head when he was offered a $45m retention plan to stay with the company after a proposed merger with Glencore in 2012. Shareholders later resoundingly vetoed the package, and embarrassed Xstrata’s board by pushing for more generous financial terms. The deal had to be re-cast as a takeover by Glencore. Now, five years later, Davis is in line to lead the board of one of the world’s biggest resources companies — a role that involves winning the trust of investors and providing both a support and a counterweight to executive ambition. He’s not the grandee-type usually associated with such a job. The Glencore-Xstrata debacle was ugly but it would be unfair to blame on...
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