Wednesday newspaper round-up: Xstrata, BP, Yahoo,

8th Feb 2012 06:22

Mick Davis has been put on notice to waive his £11m bonus for the completion of Xstrata's $86bn (£54bn) merger with Glencore. A top five shareholder has told the company that Mr Davis should "be very careful about what his pay rations look for doing a deal he personally benefits from", whatever his contractual entitlement. The warning, in the wake of the furore over the bonus for Royal Bank of Scotland boss Stephen Hester, comes amid a growing backlash from Xstrata's leading investors about Glencore's so-called "merger of equals". The deal hands Glencore shareholders 55% of the newly titled Glencore Xstrata International (GXI) despite Xstrata assets making up 64% of the new company, The Telegraph reports.The chief executive of BP has vowed that the company will defend itself "vigorously" if a court case over the Gulf of Mexico oil spill goes ahead.Bob Dudley hinted, though, that an out-of-court settlement was still possible. The prospect of paying out mammoth fines and damages relating to the disaster cast a shadow over the company's annual results and strategy update yesterday. It increased its dividend for the first time since reintroducing shareholder payments a year ago, but only by one cent. The company needs to conserve cash to settle its spill costs, which in the worst-case scenario would top $60 bn (£38bn). Analysts believe that BP would enrage American politicians if it announced a big dividend rise before the bill was settled. The trial, in New Orleans, is due to start on February 27 and will determine how much in fines and additional damages the company has to pay, The Times says. Yahoo! chairman Roy Bostock and three other directors are to step down in a boardroom clear-out as the embattled US internet company attempts to win back investor support. The latest board upheaval comes amid a strategic impasse at the group and follows the departure just a month ago of founder Jerry Yang. He quit as a director shortly after the appointment of new chief executive Scott Thompson, the president of online payments service PayPal, who is joining after the acrimonious departure last year of his predecessor Carol Bartz. Mr Bostock announced the latest shake-up on Tuesday night in a letter to shareholders that has raised fresh questions over the progress of Yahoo!'s talks to sell its large majority stakes in China's Alibaba Group and Yahoo! Japan, according to The Telegraph. Stephen Hester disclosed that his radical overhaul of Royal Bank of Scotland has so far cost £38bn as he issued a rallying cry to staff urging them to "prove the critics wrong". Breaking his silence after the furore over his near £1m bonus and Fred Goodwin's knighthood, Mr Hester emailed employees admitting that such political and media attention "makes the job harder". Mr Hester waived his bonus last week following a wave of political and public anger. Two days later, his predecessor Mr Goodwin was stripped of his knighthood for his role in the bank's collapse, which left it in need of a £45bn bailout. "We can't control the outside world - whether the economic environment or the political one," Mr Hester said. "That's not unique to us. But if ever something has been proven over our last three years of history, it's this - we can successfully overcome great obstacles, The Telegraph writes.Back in 2008, the Baltic Dry index was an early warning sign of trouble ahead for the global economy. David Blanchflower was a big fan, and used to cite the Baltic Dry when he was trying, unsuccessfully, to persuade his fellow members of the Bank of England's monetary policy committee to cut interest rates in the months before the collapse of Lehman Brothers. In recent days, the Baltic Dry has fallen to a 25-year-low prompting concern that history is about to repeat itself. Even so, the 2.9% fall in German industrial production in December suggests that the Baltic Dry might have collapsed due to both increased supply of shipping and weak demand. Germany is the world's biggest exporter and the hefty slump in output at the tail end of 2011 coincided with the intensification of the crisis in the euro zone. The Baltic Dry needs to be handled with a degree of caution, but it does provide information about trade flows that is both timely - the data is collected daily - and unaffected by speculation. It is worth keeping an eye on, The Guardian says.AB