Is Glencore a little less attractive now?

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Glencore has released its interim results this morning and provided some much needed cheer for the markets. Profits are up by 57%, even in the face of volatile trading conditions, and the outlook for commodities, it says, is rosy.

All very good. Yet under the potential risks to its business, the firm has highlighted that its "ability to attract, retain and compensate key employees may be impacted by its transition to a public company".

Glencore is, of course, now renowned for paying vast sums to its senior management. After its flotation, five directors instantly became billionaires, and it seems unlikely they're going to cash in their stakes any time soon.

Similarly, its compensation structure is heavily weighted towards locking in key staff. Remuneration costs for directors last year was $146m, yet a massive $6.1bn was allocated to long-term incentive profit-share schemes.

Should an employee leave, it would be 12 months before the first tranche of these schemes could vest at all, but then payment would be staggered over five years. Retention, perhaps, isn't much of a concern.

What about attracting staff? Glencore isn't known for its effusive recruitment sprees; the last significant hires announced were Steven Chiang to head its Asian distillates desk in Singapore and Paul Smith as head of investor relations.

Nonetheless, specialist commodities headhunters scoff at the idea that Glencore would struggle to attract talent.

"The trend is that traders from investment banks are moving towards commodity trading houses, who can pay bigger cash bonuses and provide greater job security," says one head of a commodities search firm. "Glencore certainly isn't excepted from that."

Glencore's characteristic generosity (or ability to lock people in) was is still in evidence. In its interim report it revealed it had issued "phantom" shares to key employees "in lieu of interests in Glencore's existing equity ownership schemes".

These amount to over 24m shares worth around $206m at the time of issuance and will vest at the end of 2013.

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