Glencore head considers taking company abroad

Glencore CEO Ivan Glasenberg in 2011, speaking at the company's listing ceremony at the Hong Kong Stock Exchange Keystone

Passage of the 1:12 initiative would be “a catastrophe” for commodities giant GlencoreXstrata and could lead the company to leave Switzerland, said the firm’s CEO, Ivan Glasenberg, in a Sunday interview with the SonntagsZeitung.

The initiative, proposed by the youth section of the centre-left Social Democrats, stipulates that the salary of a company’s highest paid employee cannot be more than 12 times that of its lowest paid employee.

The initiative is seen as a reaction to widening social inequality, as well as the recent banking scandals and the general feeling that many people in high positions earn high salaries without making a special effort.

“No one should earn less in a year than top managers in the same company earn in a month,” the proponents claim.

If Glencore were required to comply with the initiative, the company would lose its best talent, said Glasenberg.

“We have a lot of excellent people here in Baar, who earn much more than I do,” said the billionaire, who revealed that he earned $964,000 (CHF900,000) in 2012.

Because of its corporate structure, Glencore as a company does not pay Swiss taxes, Glasenberg said. But he stressed that in the past two years its partners and employees paid around CHF2 billion in taxes in Switzerland.

Glencore – which merged on May 2 with mining concern Xstrata – has also been accused by non-governmental organisations (NGO’s) of not paying taxes in Africa and Latin America, a claim Glasenberg denied.

“I don’t understand why people don’t recognise our contributions,” he said. “”We pay hundreds of millions in taxes and license fees in Africa.”

Glasenberg also stressed that Glencore has done much to help the African people. “We build schools, hospitals and water supplies. We invest in the infrastructure, create jobs, and improve the standard of living,” he said.

The 1:12 initiative would create “huge problems” for other global companies based in Switzerland, such as Nestlé, Novartis and Roche, in Glasenberg’s opinion.

“I can’t believe that Switzerland would cause such great harm to its economy,” he said. “And I say that not just as the head of a company, but as a Swiss citizen.”

Although Glasenberg, originally from South Africa, views Switzerland as “the best place to live” in the world, and recently obtained Swiss citizenship, he believes the Initiative – which will come to a vote in Autumn – could have the unfortunate effect of forcing Glencore to move away.

“There are enough countries that would be glad to have us,” he said.