Investors vote on lofty gold exec pay

TORONTO • The past week was an uncomfortable one for Canada’s largest gold miners, as their lofty executive pay was thrust into the spotlight. But when investors had their say, the results were mixed.

Agnico Eagle Mines Ltd. and Goldcorp Inc. both got overwhelming shareholder approval for the “say-on-pay” resolutions at their annual meetings. This was no small feat given that Glass Lewis & Co., an influential proxy advisory firm, urged investors to vote against both of them.

Barrick Gold Corp. and Yamana Gold Inc. were not so fortunate, as both of their pay plans got rejected in lopsided votes. A whopping 73 per cent of shareholder votes went against Barrick’s plan, while Yamana’s was rejected on 63 per cent of the votes cast.

Eldorado Gold Corp., another gold miner that paid executives handsomely last year, does not hold a “say-onpay” vote. But investors still voiced displeasure at Thursday’s annual meeting, as the four directors on the compensation committee received far fewer votes than the rest of the board.

The results of “say-on-pay” votes are non-binding, but they provide a useful barometer for how shareholders feel about compensation. That can be a tricky issue for mining companies, especially when metal prices are down.

Gold prices have been awful for the past two years, and the equities have performed badly. So it was not surprising when shareholders objected to the pay received by Barrick chairman John Thornton (US$12.9 million) and Yamana chief executive Peter Marrone (US$11.3 million). They both got pay hikes last year, even though the stock prices of their companies plummeted. Eldorado CEO Paul Wright’s pay more than doubled to $13.8 million, though his share price rose as well.

The two CEOs who took pay cuts are the ones whose compensation did not face major objections. Goldcorp CEO Chuck Jeannes took a 14 per cent pay cut in 2014 (though he still took home US$8.5 million) while Agnico CEO Sean Boyd’s pay fell 20 per cent (to US$7.5 million).

Boyd said he wasn’t surprised that shareholders backed Agnico’s compensation plan, given that the stock went up last year and his pay went down.

“I haven’t had an issue around compensation at any shareholder meeting in 18 years,” he said in an interview at Friday’s annual meeting. “We always take a measured approach (to pay.)”

The executives who did get criticized by investors offered olive branches. Both Thornton and Marrone promised to review their compensation plans, and Marrone waived some performance share units.

Marrone also said it is important to remember there is more to compensation than stock performance.

“It should be based on operational performance and the measures of a company’s long term success,” he said. “(But) that share price does matter.”