Barrick Gold Investors Protest in Executive Pay Vote

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Barrick Gold Corp., the world’s largest gold producer, plans to re-examine its executive compensation after shareholders expressed disapproval of the company’s policies for a second time in three years.

More than 73 percent of Barrick’s shareholders voted against a nonbinding advisory resolution on executive pay, the company said Tuesday in a filing following a vote at Barrick’s annual general meeting in Toronto.

Executive Chairman John Thornton, a former Goldman Sachs Group Inc. president, said Barrick will assess feedback from investors and refine its compensation system, particularly as it relates to his own pay package.

“That’s obviously not where we want to be,” Thornton told shareholders at the meeting after preliminary results showed about three-quarters voted against the pay plan. “We’ve heard you loud and clear.”

Barrick’s compensation and governance have come under scrutiny in the past two years after the company revealed in 2013 that Thornton, then a co-chairman, received an $11.9 million signing bonus.

While the company has since overhauled the way it determines senior executives’ pay, three of Canada’s largest pension funds said this month that they would vote against Tuesday’s resolution after Thornton got a 36 percent increase in 2014 compensation to $12.9 million. Barrick’s shares have had four straight annual declines in Toronto, including a 33 percent drop last year.

Not Aligned

Barrick’s compensation program “is structured in a way that does not align pay with performance,” and the compensation committee hasn’t been responsive to shareholders’ concerns, British Columbia Investment Management Corp. said on its website. BCIMC also criticized the make-up of Barrick’s board, while Ontario Teachers’ Pension Plan complained about insufficient mining-industry expertise among the company’s directors.

Canada Pension Plan Investment Board, the country’s largest pension fund manager, said on Friday it was also planning to vote against the compensation plan. PGGM of the Netherlands said this month it hasn’t seen any improvement in corporate governance at Barrick since last year’s shareholders meeting.

CIBC Vote

The vote at Barrick is the second time in a week that a Canadian company has been rebuked by shareholders over executive compensation. Shareholders at Canadian Imperial Bank of Commerce voted against the bank’s executive compensation package last week.

Barrick paid Thornton $12.9 million in 2014, up from $9.46 million the previous year, the company said in a filing last month. The compensation included $7 million to be used to buy shares in the company that can’t be sold until his departure or retirement.

Thornton’s pay is twice as much as the next-best-paid executive in his industry, Peter Marrone, chairman and CEO of Toronto-based Yamana Gold Inc., according to Gregory Elders, an analyst at Bloomberg Intelligence.

Barrick defended Thornton’s pay in an April 15 filing, outlining, among other things, his achievements in 2014 and noting that the chairman owned nearly 1.4 million Barrick shares, half of which he bought with his own money.

Thornton is excluded from Barrick’s partnership compensation plan for its top executives and mine managers, whose pay will be tied to collective performance. The initial group of 35 partners, named last month, will receive their long-term incentive pay in the form of shares that can’t be sold until they leave the company and will also be required to hold stock worth multiples of their salaries.

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