Commodity trading - Being offered shares of the company
I know that it's a tricky question and that it will be difficult to have accurate answers as it's covered by a kind of confidentiality but I would be concerned with any elements or vague answers. I know that companies such as Vitol, Trafigura and Glencore offered shares of the company to their loyal employees.
- As a whole, how long do you need to wait before being offered some shares of a company - is it more like 3-5 years or 10-15 years ?
- Does it represent a marginal contribution to the earnings of an employee or is it substantial ?
- What are the companies that provide the same access to their capital ? Are there some companies in the soft also ?
Glencore is now a public company so completely different. 3 is probably too short unless you are coming in at a senior level. Then it really depends on what kind of contribution you are making.
Judging by what I have read about Vitol, and what everyone knows happened at Glencore, can be quite substantial.
ED&F Man has shareholders in senior management. Cargill carved out 10% or 15% for management. I think maybe same thing at LDC.
I hear the best way to get shares at Cargill is to lurk around Aspen or St. Barts and try to impregnate any midwestern gals with the last name MacMillan or Cargill. Once you have the bag secured, you are on a one way trip to 10mm of dividends from now until the US agricultural market implodes
Have you read "World for Sale" or anything around those terms? These scenarios were ways of the past majority of the firms you listed makes billions in annual revenues now are global powerhouses...to be clear "senior management" does not give away equity just like Zuckerberg aint any more either. I know Vitol profit sharing was for basically most sr management or biggest traders before, ppl who made firm 100s of millions over multiple years. Now its near impossible.
Thanks for your answer.
I haven't heard of "World for sale" but thanks to this discussion it's a reading I am considering now.
Yes, definitely largest trading houses are now integrated companies with assets.
Ok, so merely impossible to obtain shares at Vitol.
not true
The trading house i was at (ABCD) paid half of your bonus in shares that were deferred and vested over a few years. You also could buy more if you wanted to, but no one would ever do that
When you’re young and starting out you fantasize about getting paid equity and cashing out big at an IPO. i had those delusions when i joined to, but it’s always better to get paid in cash
The reality was that the shares were overvalued by 30%, all the senior guys wanted to cash out, and they were stagnant/lower for the 7 years i was there.
i always sold when i could and invested in public equities.
Many thanks for all these insightful answers. I think I have been skewed by Glencore's IPO and hearsay from its managers having made lots of money thanks to it.
From your answers, I understand that in the ags you can be offered shares but it's seldom interesting because of the valuation of it. And in the energy space the access to the shares would be very restrictive. The economic structures of these trade houses is always fascinating.
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