Barrick Gold to face the wrath of shareholders over pay hikes
Toronto-based mining giant’s board in hot water because of executive compensation plan
Barrick Gold Corp. is in for a showdown Tuesday at its annual meeting in Toronto amid investor blowback over its controversial executive pay scheme that includes a 35-per-cent salary hike for its board chairman.
The Canada Pension Plan Investment Board (CPPIB), the country’s largest pension fund manager, joined three other big pension funds Friday in saying it too will vote against the Toronto mining giant’s executive compensation plan awarding John Thornton $12.9 million.
The CPP Investment Board also said it plans to withhold support from Brett Harvey, one of Barrick’s board members and the chair of its compensation committee, which approved the 2014 pay hikes for Bar- rick’s top brass in a year when shares plunged 33 per cent and the miner lost $2.91 billion.
“We continue to be concerned with the company’s practice of granting outsized awards on a largely discretionary basis, which we believe is inconsistent with the governance principle of pay-for-performance,” said the CPPIB in a statement.
Just over a week ago, the Ontario Teachers’ Pension Plan Board and the British Columbia Investment Management Corp. said they would vote against the re-election of the entire board, citing lack of mining expertise and concerns over its remuneration decisions. The Netherlands-based PGGM Vermogensbeheer B.V., which is one of Europe’s biggest pension funds, said it will also vote against Barrick’s executive pay packages.
Barrick already overhauled its compensation system after investor outrage over Thornton’s $11.9-million signing bonus in 2013, when the for- mer Goldman Sachs president was hired to co-chair the board with company founder Peter Munk as he was being groomed as Munk’s even- tual successor. The company contends that under its new pay structure, compensation is aligned with performance and that its senior lead- ers’ personal wealth is directly tied to the company’s long-term success.
Together, the four pension funds own less than 1 per cent of Barrick stock, and although the so-called “say-on-pay” vote is non-binding, such vocal opposition is known to send a strong message to companies about investor dissatisfaction. A Barrick spokesperson said Thornton will address the investor audience at the Metro Toronto Convention Centre, and co-presidents Kelvin Dushnisky and Jim Gowans will do the management presentation. Munk, who retired last year just prior to a massive shakeup at headquarters, is also expected to attend.
About 150 protesters, including community leaders from Papua New Guinea and Northern Chile who live near Barrick mines, will hold a demonstration with a marching band and a massive art project outside the convention centre, protesting against alleged human rights and environmental abuses, they said in a release.