Vale’s board is divided over the future of leadership

Vale’s board meeting the day before had ended in a dead end, with members divided over whether or not to renew Eduardo Bartolomeo’s mandate as CEO, after the government had shown dissatisfaction with the management of the mining company and had given signals that he would try to influence the choice. a new executive.

Of the 13 members of the board, six voted in favor of reappointing Eduardo Bartolomeo, whose term as CEO expires on May 26, another six voted in favor of opening a succession process and a final vote opted for l abstention, according to two sources with knowledge of the matter, who spoke on condition of anonymity.

“There was a six-six tie in the board of directors and there is no date for a new resolution. Independents and Japanese (councillors who are part of the block in which the partner Mitsui is part) are in favor (of Bartolomeo) . What do we have? Now it’s a dead end,” one of the sources said.

The source added that resolving this impasse will be challenging.

The abstention vote was cast by Luis Henrique Guimarães, appointed by Cosan – a major Vale shareholder – to the board and considered behind the scenes as one of Vale’s presidential candidates. Guimarães was CEO of Cosan, where he remains as an advisor.

The day before, Vale had reported in a statement that the extraordinary meeting ended “inconclusively” and that the board of directors will meet again “in the next few days” to seek a definition on the succession or renewal process of its president, Eduardo Bartholomew. .

The company’s shares rose more than 3.50% on Friday afternoon, while Ibovespa gained 0.6% around 3.20pm.

Vale’s board has exclusive jurisdiction to decide on the choice of the company’s president. However, behind the scenes, the federal government has been looking for ways to influence the choice.

At the beginning of the year, President Luiz Inácio Lula da Silva tried to put his former Finance Minister Guido Mantega at the helm of Vale, as Reuters published at the time with a source close to the matter, and the Minister of Mines and Energia, Alexandre Silveira, has publicly defended his qualifications to hold a position in the company.

Late last month, however, Silveira withdrew and denied that the president had discussed succession to Vale and said that Lula would “never” be willing to interfere in a publicly traded company.

Lula, in turn, publicly criticized Vale’s performance in the repair and compensation works for the collapse of the Samarco dam – Vale’s joint venture with BHP – and of Vale itself, in 2015 and 2019 respectively.

But, behind the scenes, it is said that Lula would like a president who talks more with the government.

According to Folha de S.Paulo, Bartolomeo’s replacement obtained the support of the two directors appointed by Previ (the pension fund of the Bank of Brazil), Daniel Stieler and João Luiz Fukunaga, and the one appointed by Bradesco, Fernando Jorge Buso Gomes.

THE CEO’S TRAJECTORY

Bartolomeo first assumed the presidency of Vale on an interim basis in 2019, leaving his post as the company’s Base Metals director in Canada following the departure of then-president Fabio Schvartsman, who led the company after the collapse of Brumadinho dam (MG)., in January of that year.

Bartolomeo was then definitively elected by the board of directors as CEO, from a list prepared by the international executive search firm Spencer Stuart, in accordance with the company’s governance.

Bartolomeo’s mandate was based on the search for greater safety in the company’s plants, with a plan to dismantle the dams at greatest risk, as well as damage repair work.

From an operational point of view, Bartolomeo’s management has sought to enhance the quality of iron ore compared to volumes, exploiting the Vale product with a higher content than that of competitors, as well as investing in initiatives to create higher value-added materials.

Bartolomeo also managed to carry out a separation of Vale’s base metals unit, in a bid to unlock value given the prospects for growth in demand for raw materials for electric car batteries with electrification.

Source: Terra

Rose

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