Glencore plc

Baar, Switzerland

1 November 2021

AGM vote shareholder consultation update

The Directors' Remuneration Policy (Resolution 15) was approved by a 74.2% vote in favour at the Company's AGM held on the 29^th April 2021. Pursuant to provision 4 of the UK Corporate Governance Code, this is an update statement outlining the context and actions taken by the Remuneration Committee since the AGM in response to the vote against of 25.8%. The Company understands those who voted against the Policy expressed concerns primarily regarding the pay quantum for a new CEO versus predecessor levels and peers (and based on the Company's relative market capitalisation at that time), and the performance orientation of the new Restricted Share Plan.
 

Prior to negotiating the new CEO's remuneration, the Remuneration Committee in 2020/2021 spent significant time considering the most appropriate approach to the new CEO's pay given the unconventional nature of the former CEO's compensation, including his personal decision to waive salary increases and not participate in variable incentive schemes. The new Policy was developed following extensive consultation with major shareholders and investor bodies in 2020 and guided by a need to support the Company's future needs as a major global miner and the world's largest commodity trading company. Accordingly, the key priorities for the Policy review process were to ensure that:
 

·      executive remuneration arrangements are fit-for-purpose, especially in the context of the
 Company's long-term strategic needs under the next generation of leadership;
 

·      executive remuneration levels are fair, competitive, and allow Glencore to attract, retain, and   motivate qualified and experienced executive talent globally; and
 

·   incentive plan outcomes are closely aligned to the shareholder experience rewarding   consistent shareholder value creation and will support the principle of long-term share       

        ownership. 

 

The new Policy reflects a more conventional, competitive, and fit-for-purpose remuneration structure for the new CEO:
 

·      a total remuneration package that is positioned competitively but not excessively versus   the FTSE30 and a peer group that represents the internationality, complexity, and scale of   our operations, as well as in the context of Glencore's continued growth;
 

·   an appropriate mix of rewards for short- and long-term performance, including a   maximum bonus eligibility of 250% with a mandatory three-year deferral of 50% of any       bonus earned, as well as a maximum long-term incentive eligibility of 225% of salary;
 

·  a Restricted Share Plan that rewards sustainable value creation and commercial   effectiveness, rather than short-term share price volatility primarily driven by commodity   price cycles; and  
 

·     one of the longest LTIP time horizons in the FTSE to reinforce our ownership ethos, as the CEO is unable to realise value from restricted shares until the later of five years from the date of award or two years post-departure.
 

Actions taken since the AGM and next steps

Under the leadership of the new Board Chairman, we have undertaken a consultation process with a majority of shareholders by votes, including the largest shareholders who voted against this resolution. In this consultation, it was noted that Glencore's market value had increased significantly since the original benchmarking was undertaken, both relative to sector peers and the FTSE 100 index with the Company positioned in the top half of the FTSE30. There was an acknowledgement by shareholders that the Company had sought to implement a fit for purpose remuneration policy. While a small group of shareholders have questions regarding restricted share plans, no shareholder called for the current arrangements to be replaced. Instead, the Company was asked for transparent disclosure of the first 6 months' operation of the Policy in its 2021 annual report.
 

Ms. Cynthia Carroll, who brings extensive knowledge of the UK governance context and the resources and global mining industry, was appointed as Remuneration Committee Chair in October 2021. At the same time, Mercer Ltd. has been appointed as the independent adviser to the Remuneration Committee. The Company appreciates the support it continues to receive from its shareholders and will draw from these fresh perspectives as it looks forward to continued engagement with its shareholders. Our aim is to ensure an approach to executive remuneration that provides a dynamic framework accommodating the evolving demands of a changing business environment and remaining responsive to the priorities of our shareholders and other stakeholders.

For further information please contact:

www.glencore.com  

Glencore LEI: 2138002658CPO9NBH955

Notes for Editors

Glencore is one of the world's largest global diversified natural resource companies and a major producer and marketer of more than 60 responsibly-sourced commodities that advance everyday life. The Group's operations comprise around 150 mining and metallurgical sites and oil production assets.

With a strong footprint in over 35 countries in both established and emerging regions for natural resources, Glencore's industrial activities are supported by a global network of more than 30 marketing offices. Glencore's customers are industrial consumers, such as those in the automotive, steel, power generation, battery manufacturing and oil sectors. We also provide financing, logistics and other services to producers and consumers of commodities. Glencore's companies employ around 135,000 people, including contractors.

Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the International Council on Mining and Metals. We are an active participant in the Extractive Industries Transparency Initiative. Our ambition is to be a net zero total emissions company by 2050.

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Disclaimer
The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities. In this document, "Glencore", "Glencore group" and "Group" are used for convenience only where references are made to Glencore plc and its subsidiaries in general. These collective expressions are used for ease of reference only and do not imply any other relationship between the companies.  Likewise, the words "we", "us" and "our" are also used to refer collectively to members of the Group or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.