Barrick Gold could have avoided say-on-pay public backlash – by Theresa Tedesco (National Post – April 24, 2013)

The National Post is Canada’s second largest national paper.

Public revolts by shareholders are uncommon in Canada and no major company has ever suffered the ignominy of losing a say-on-pay vote. That could change Wednesday.

Barrick Gold Corp., once the largest gold miner in the world, is headed for a showdown with a prominent group of shareholders over executive compensation. Seven of Canada’s largest pension funds are fuming over a US$11.9-million signing bonus the Toronto-based company awarded former Wall Street investment banker John Thornton to join the company as co-chairman last year. Juxtaposed against the 54% plunge in value for Barrick’s stock price during the past year, Thornton’s eye-popping bonus “is outrageous,”says Richard Leblanc, a governance expert and associate professor at York University in Toronto.

A group of seven major institutional shareholders have threatened to demonstrate their displeasure by voting against an advisory resolution on executive pay and withholding votes in the election of directors who comprise Barrick’s five-member compensation committee during the company’s annual shareholders meeting Wednesday in Toronto.

The group of seven, which collectively manages assets worth more than $900-billion, fired off a letter to Barrick founder and chairman Peter Munk, outlining their grievances against the “inducement,” arguing it is “inconsistent with the governance principle of pay-for-performance,” while setting a “troubling precedent in Canadian capital markets.”

If the agitators, which include Canada Pension Plan Investment Board, Ontario Teachers’ Pension Plan, Alberta Investment Management corp., British Columbia Investment Management Corp., Caisse de depot et placement du Quebec, Ontario Municipal Employees Retirement System, and Public Sector Pension Investment Board, make good on their threat, it would be the first time a Canadian company failed to win a say-on-pay vote.

These ballots may not be necessarily binding, but say-on-pay votes are having significant moral suasion with boards, which are aware of the reputation damage and liability risks involved. Investors are speaking out earlier by voicing their discontent and corporate directors are meeting with shareholder groups long before a company publishes its annual proxy circular to avoid a public backlash. It’s no coincidence that more than 53% of Canadian companies with a say-on-pay vote received a 95% or higher approval while most of the remaining 47% received approval ratings of 80% or higher.

For the rest of this article, click here: http://business.financialpost.com/2013/04/23/barrick-gold-executive-compensation-wednesday/