Xstrata has given its backing to the latest merger offer from Glencore , but for the first time it is allowing its shareholders to vote against a controversial multimillion pounds retention package without blocking the merger. Through a novel structure, the board of the miner on Monday gave shareholders the opportunity to vote for the deal with or without a retention package for Xstrata's most senior executives and managers. The payouts have deeply divided the miner's shareholders since they were announced earlier this year. The board of the mining company, nonetheless, recommended shareholders only back the deal with the inclusion of the £140m retention package. Sir John Bond, Xstrata's chairman, said that "without the ability to retain key Xstrata managers to run the combined group's mining operations ... the independent non-executive directors believe that the value proposition of the combined entity is at risk." But he added in a statement that in the light of feedback from shareholders, the directors had decided to "decouple" the vote on the merger from the vote on the pay arrangements, allowing investors to "vote in line with their convictions." The recommendation is the latest twist of a seven-month saga to create a natural resources group that will put under the same umbrella production and trading of commodities from copper to wheat with operations from Chile to Australia. The $80bn combination, which still faces numerous obstacles, including a shareholder vote later this year and antitrust reviews from Europe to China, is the largest merger and acquisition deal so far this year. The deal will bring hefty fees to a dozen investment banks facing one of the worst mergers and acquisitions markets in years. Christopher LaFemina, mining analyst at Jefferies in London, said he expected the merger to be completed, "especially in light of these important changes to the deal structure." The London equity market appeared to share the view, with shares of Xstrata rallying in early trade as investors bought into the combination. Ivan Glasenberg, Glencore chief executive, last month upped his offer for Xstrata to 3.05 Glencore shares for each of the miner, up from 2.8 shares, after shareholders led by Qatar's sovereign wealth fund said they would oppose the original terms. But Mr Glasenberg said he wanted to take the helm of the combined company after six months, displacing Mick Davis, Xstrata's boss, and provoking concerns among some investors, including Qatar Holding, the second largest, about an exodus of Xstrata staff on his departure. Other shareholders, such as BlackRock, the third-largest in Xstrata, have remained dead-set on principle against the retention payments, to which Xstrata in May added performance thresholds. The new voting structure means that the deal will no longer collapse should investors fail to support the payouts as was the case in a previous version of the merger's plan. Shareholders are likely to vote on the deal in November. Mr Glasenberg, who will become chief executive of Glencore Xstrata next year, said in a statement that the trading house was "in favour of the proposed retention arrangements," adding: "The amended proposed voting structure should allow Xstrata shareholders to fully express their own views." Xstrata on Monday confirmed that Mr Davis would leave the combined group after six months and would no longer participate in the so-called management incentive arrangements, under which he was set to receive about £29m. Glencore is being advised by Citigroup and Morgan Stanley, while Deutsche Bank, JPMorgan, Goldman Sachs and Nomura are advising Xstrata. Lazard is advising Qatar Holding.