Trafigura proposes employee share clawbacks for confidentiality breaches, sources say

By Pratima Desai and Julian Luk

LONDON - Commodity trader Trafigura sent a letter last week to current and former employees proposing share clawbacks for breaches of confidentiality and its code of conduct, two sources with knowledge of the matter told Reuters.

Clawbacks are typically used by financial firms which require money already paid out to employees to be returned in the event of misconduct or poor performance.

Swiss-based Trafigura is owned by its employees.

Staff are allowed to retain accumulated shares when they leave. Trafigura will typically buy them back over a period of four to five years, one of the sources said.

"We regularly review our shareholder scheme and recently communicated a number of proposed administrative and other changes to shareholders," a Trafigura spokesperson said.

A source familiar with the matter said the letter sent last week by Chief Executive Jeremy Weir was partially a reaction to the global energy market finding out about hefty losses related to its Mongolian oil operations before Trafigura had made public disclosures.

"The letter refers to breaches of confidentiality and code of conduct and clawbacks. It could be (internal) fraud or any other misdemeanour and apply to any shares whether you still work there or not," the first source with knowledge said.

"If you are an ex-employee, it just means they won't pay you for your shares."

It is not clear if the letter detailed the misconduct that could trigger a share clawback, but the second source with knowledge of the matter said a series of departures from Trafigura in recent months could be one reason.

Some of those leaving include Trafigura's former head of nickel trading Socrates Oikonomou and chief operations officer and board member Mike Wainwright, which led to a wider revamp and the eventual exit of Kostas Bintas, former co-head of metals, last year.

Bintas has been hired by energy trader Mercuria, according to sources, for its metals divisions where the company is looking to expand its presence in energy transition materials such as copper, cobalt, nickel and aluminium.

"This (proposal) was not connected to any specific jurisdiction or issue, nor to any personnel changes. It’s simply part of good governance to regularly review remuneration schemes," a second source familiar with the matter said.

A unit of Trafigura agreed to pay a $55 million civil fine to settle U.S. Commodity Futures Trading Commission charges of fraud, manipulation and impending whistleblower communications.

(Reporting by Pratima Desai and Julian Luk; editing by Veronica Brown and Louise Heavens)