Glencore Names Hayward as Chairman

By Dow Jones Business News, 
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LONDON--Former BP PLC Chief Executive Tony Hayward, who in 2010 became a lightning rod for criticism over the British company's Deepwater Horizon oil-spill disaster, was Thursday unveiled as permanent chairman of commodities titan Glencore Xstrata PLC.

He had been acting as interim chairman since last May.

The appointment caps a remarkable comeback for Mr. Hayward, 56, who was excoriated for his handling of BP's biggest crisis to date but has since rebuilt his fortunes as co-founder and chief executive of Anglo-Turkish oil explorer Genel Energy PLC.

"Over the last 12 months, Tony has provided exemplary leadership of the board and proved himself to be the outstanding candidate to take on the role permanently," said Peter Grauer, chairman of Glencore's nomination committee.

What impact his new job will ultimately have on his position at the helm of Genel is unclear.

An executive at the Swiss-based trader, who spoke on the condition of anonymity, said its new chairman would be expected to "transition" out of his position as Genel CEO within a year.

But a person close to Genel said that "with the time and the money Tony's invested in the company, it's very important to him and he'll will be keen to ensure its ongoing success."

The person added that "further down the line," Mr. Hayward could take on a different role at Genel, but declined to give a time frame or say what the role might be.

It also remains to be seen how much oversight Mr. Hayward will have over Glencore's powerful Chief Executive Ivan Glasenberg. Glencore's minority shareholders are keen on having a strong board to represent their interests, given the high level of employee ownership at the company.

Mr. Glasenberg owns an 8.3% stake, according to the company's annual report, while he and other Glencore employees together own more than one-third of the company's shares.

Glencore's yearlong search for a new chairman had come down to three candidates in recent weeks, according to people familiar with the matter.

Mr. Hayward trumped former BG Group PLC CEO Frank Chapman, after Brazilian mining investor and ex- Vale SA boss Roger Agnelli ruled himself out of the running.

Investors reacted to Mr. Hayward's appointment with muted enthusiasm.

"It's not going to change the way the company has been run," said Nik Stanojevic, an analyst at investment firm Brewin Dolphin, which owns shares in Glencore.

The decision to appoint Mr. Hayward as chairman will be voted on at Glencore's next annual shareholder meeting, scheduled for May 20.

Shareholder advisory groups questioned whether an executive who presided over one of the worst accidents in corporate history was an appropriate custodian for a company such as Glencore, whose environmental record and commitment to transparency is closely scrutinized by activists.

The Deepwater Horizon disaster, the worst offshore oil spill in U.S. history, was caused by an explosion on a drilling rig leased by BP, which killed 11 workers.

Pension & Investment Research Consultants Ltd, or PIRC, said it would advise investors to vote against Mr. Hayward's nomination.

"There are concerns over his time as CEO of BP, arising from Deepwater Horizon, and possible time commitments due to ongoing legal proceedings in the U.S.," said a PIRC spokesman.

ShareAction, another U.K.-based advisory group, said it hoped Mr. Hayward would "actively engage" with investors.

"The company has also been subject to intense civil society criticism on a range of issues and we would expect Mr. Hayward to demonstrate his commitment to addressing them to reduce reputation risk for the company, " said Louise Rouse, a ShareAction director.

Write to Alexis Flynn at alexis.flynn@wsj.com, Selina Williams at selina.williams@wsj.com and Alex MacDonald at alex.macdonald@wsj.com

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  05-08-140415ET
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This article appears in: Energy , Commodities

Referenced Stocks: BP

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