Glencore begins the changing of the old guard
Departure of trader's head of copper signals break-up of 'billionaire boys' club'
The impending retirement of Glencore's copper kingpin Telis Mistakidis marks the start of a generational shift at the top of the world's most powerful commodity trader.
While some senior executives have left the Swiss-based group since its 2011 stock market flotation, none of the inner circle surrounding the company's workaholic boss Ivan Glasenberg have left — until now.
The departure later this year of 56-year-old Mr Mistakidis signals the break-up of the so-called billionaire boys' club, which built risk-hungry Glencore into the commodity industry's dominant and most talked-about company, according to analysts, bankers and investors.
The leadership changes come as Glencore faces a string of legal challenges, including a US Department of Justice investigation into possible corruption and bribery that has put its business model under the microscope.
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"He's decided to retire and pass on the baton to the next generation," Mr Glasenberg said. "None of us expect to stay here forever," he added.
But analysts have questioned the management changes.
"It's one of those where you don't know whether this is being done to appease the regulators, and has been done with their consultation, or if they're just trying it out hoping to get them off their backs," said Ben Davis, an analyst at Liberum.
Others say Glencore, which has an appetite for risk that few of its peers can stomach, is doing what it always does and moving quickly to get in front of a problem.
"They're trying to be on the front foot, they're the most reactive company in our sector," one banker said. "When things happen they react very quickly."
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These investigations have weighed on Glencore's share price, which is down 29 per cent this year.
Glencore grew out of Marc Rich & Co, whose eponymous founder was regarded as the godfather of modern commodity trading. Since 2002, when Mr Glasenberg took the helm, it has been run by a tight-knit group of traders who have been at the company since the 1990s.
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Mr Glasenberg also made them fantastically wealthy after Glencore's $60bn flotation in 2011. Mr Mistakidis and Mr Maté have retained equity stakes worth about £1.2bn each.
"The management has been here a long time since the float, even though people thought since 2011 that a lot of the senior executives would leave," said Mr Glasenberg. "They haven't . . . and there comes a time when the next generation needs to take over."
Some think the management changes announced by Glencore last week also reflect its evolution from a commodity trader to a company that makes most of its money by extracting raw materials from the earth.
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"What you're seeing is a change in Glencore's structure that mirrors its evolution from a private trading company to one of the world's largest mining companies," said Paul Gait, analyst at Bernstein Research.
"If anything, the turbulence of the last year has forced investors to ask more questions about the company, about management procedures; whereas before people were focused on the dollars and cents and tonnes out of the ground. Now there's an increased awareness that these kinds of things have become just as important," added Mr Gait.
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