Trader Fact Files: Ivan Glasenberg

Ivan Glasenberg is the Chief Executive Officer of Glencore, which is one of the world’s largest commodity trading and mining companies. He is also on the boards of mining companies Xstrata plc and Minara Resources Ltd.

Career

Glasenberg was already with Glencore around the very beginning of his career, just after getting his MBA in 1983. He began working in the coal department for Australia and Africa before managing the company’s offices in Hong Kong and Beijing from 1989 to 1990. The year after, he became the head of the company’s coal department and eventually made his way to the CEO position in 2002.

In 2005, BusinessWeek reported that Glasenberg was involved in the secretive commodities trading firm Marc Rich & Co. AG, owned by Marc Rich who is a billionaire commodities trader charged with tax evasion and illegal deals with Iran. At that time, Glasenberg was aware of the oil trading but had no idea whether or not an embargo was being broken.

In 2011, Glasenberg lost nearly 800 million GBP of his worth as Glencore share prices plummeted 13.2% to leave the company’s value at 4.7 billion GBP. In September of that year, he used his own dividends to buy a larger share of the company from his previous 15.8% stake by going long an additional $54 million worth of stock. With Glasenberg owning more a larger part of the company the following year, he became the 20th richest mining billionaire at an estimated net worth of $7.3 billion in 2012.

When Glencore and Xstrata completed one of the largest mining company mergers, Glasenberg became the CEO of the merged $88 billion entity. According to Bloomberg, his total annual cash compensation is nearly $1.5 million with other long-term compensation at $63,000 as of fiscal year 2015.

This year, Glencore reported its worst half-yearly profit and announced plans to reduce debt to $16.5 billion by the end of 2016. Glasenberg signed a $880 million deal to sell future output from Glencore’s operations in Australia to Evolution Mining in order to make up for losses in mining. However, this barely compensates for the $395 million loss that the company chalked up in hedging its coal production before the price rally.

Facts

Glasenberg was born in South Africa in 1957 to a Jewish family. His father was a luggage manufacturer and importer born in Lithuania while his mother was from South Africa. They resided in Johannesburg, in a small suburb of Illovo, Gauteng.

He a national junior champion in race walking during his early 20s and was already friends with Mick Davis, who became the CEO of Xstrata. To date, he runs and swims daily to stay fit. Glasenberg is married and has two children, with his family residing in Ruschlikon in Switzerland after he got his Swiss citizenship in 2011.

Glasenberg did national service as required for South African male youth, describing the year he spent as an army clerk as his “brain-dead” year. He graduated from the University of Witwatersrand in South Africa with degrees in commerce and accountancy. He worked with Nexia Levitt Kirson, which was a firm of chartered accountants, for five years. He took his MBA from the University of Southern California’s IBEAR program in 1983.

In one of his rare interviews to an old university magazine, Glasenberg shared that he was intrigued by commodities trading in Witwatersrand when he observed a man sourcing wax from South America and selling it to Japan.

Achievements

Glasenberg reportedly paid around 240 million GBP in taxes to Ruschlikon after Glencore was floated on the London Stock Exchange. This allowed residents of the village to enjoy a lower taxation rate by 7%, although this attracted a lot of criticism from those who believed that Glencore was into controversial business practices.

He debuted on the Forbes Billionaires List in 2011 when Glencore went public, bringing his net worth to $7.3 billion. He has since tumbled from 301st place to the 1,335th spot in 2015 as his net worth has been reduced by falling Glencore share prices. Early this year, Glasenberg admitted that he learned several lessons from this slump such as structuring the balance sheet for operating in a public market.

In 2016, Forbes estimated his net worth at $3.33 billion, placing him in 9th place of the BRW Rich List in Australia. Glasenberg is considered to be an extremely private person, with the Financial Times dubbing him as “one of the great enigmas of the corporate world.”

He is said to live a simple and by no means opulent lifestyle, living in a discreet modern villa near a Lindt chocolate factory in Zurich. With Glencore stock down nearly two-thirds in the past year, Glasenberg’s net worth is still safely around $3 billion even after the firm issued 1.3 billion new shares to keep prices afloat. Glasenberg bought a lot of these shares in order to hold on to his 8.6% stake in the company.

Still, compared to other mining companies such as Rio Tinto, BHP Billiton, and Anglo American who have changed leadership in the wake of the failed supercycle in commodities, Glasenberg has held on to his spot in Glencore. What differentiates Glasenberg is that he owns a sizeable stake in the company while his colleagues total to 30% in ownership, which essentially seals his seat at the helm.

Apart from that, analysts also noted that the tough-talking CEO hasn’t been one to refrain from admitting his mistakes. One such mistake is his gearing up of the company when Chinese manufacturers were ramping up demand for metals only to see the world’s second largest economy hit several road bumps in the past couple of years. Glasenberg is expected to steer Glencore into cutting dividends and reducing net debt from an earlier forecast of $27 billion.

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