Change of control triggered by £57bn deal allows share options to be cashed out quickly, while banks advising on merger could collect $150m
Mick Davis, chief executive of Xstrata, can expect to cash in shares and options worth about £6m following the long-anticipated tie-up with Glencore.
However, Davis has been quick to try to head off protest over a separate cash payment equal to a year's pay, bonus and benefits, due to a contract "change of control" clause.
He said he would not collect the payout as he was staying on as chief executive of the enlarged group.
A regular in the Guardian's survey of executive pay, Davis has a salary of $2m (£1.2m), a housing allowance of $183,000, and other perks, including life cover, amounting to more than $300,000. This is before his bonuses, which in 2010 amounted to $6.3m, as well as private use of the company leased aircraft when it does not clash with company requirements.
The change of control contract allows long-term incentive plans (LTIPs) and options that he has been awarded to be cashed out quickly. Their value will depend on the Xstrata share price – but at £12 he has 209,042 shares from a plan awarded to him in 2010, and 204,856 shares in an LTIP awarded in 2011, as well as 696,809 options allowing purchases of shares, at £10.31, which will be worth about £6m. Options to buy shares at £1.82 – currently giving a paper profit of about £7m – and options to buy shares at £3.72 (a profit of about £12m) will be re-priced once the deal is completed.
Other large payouts can be expected for the high-ranking bankers advising on the deal. Thomson Reuters' Deals Insight estimated they would earn $149.2m in advisory fees between them. Some 18 are listed by the companies, based at banks such as JP Morgan Chase, Deutsche Bank, Citigroup and Morgan Stanley. Michael Klein, the banker who left Citigroup in 2008, is included as a "strategic consultant" to both companies.