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MONTREAL — Shareholder meetings are usually dull, scripted affairs. It’s rare that anything eventful happens in the hotel meeting halls where they are set.
Even when a proxy fight threatens to disturb these gatherings, a last-minute truce is often brokered to avoid a public spat and an embarrassing defeat. Remember Canadian Pacific Railway’s acrimonious battle with activist investor Bill Ackman? It got resolved in the wee hours of the night behind closed doors, not in front of cameras.
But Peter Munk is not one to cave in, and Barrick Gold, the gold producer he founded 30 years ago, is still standing its ground in its showdown with Canada’s most powerful pension fund managers over the $17-million (U.S.) compensation awarded to its new co-chair, John Thornton.
In a statement Tuesday afternoon, the company said: “The Barrick board takes the shareholder vote seriously and intends to carefully consider our shareholders’ perspectives regarding executive compensation matters,” it said. Translation: We hear you.
Those words, however, don’t mean Wednesday’s annual meeting will be uneventful. For once the trip to the Metro Toronto Convention Centre will be worthwhile for Barrick shareholders who want to see the outcome of an investor revolt that is as strong as it was surprising.
This rebellion has been remarkable in many respects. Canadian institutional shareholders tend to settle their disputes with companies discreetly. When the Caisse de dépot et placement du Québec fails to iron out its differences with a company, for instance, it waits until the vote is taken to reveal its protest-vote. The Caisse has made public its opposition before an annual meeting on only three occasions in the past decade, when it criticized Molson-Coors, Magna International and SNC-Lavalin for being overly generous with executives.
While institutional investors have joined forces in the past, never before has such a wide-ranging coalition of pension heavyweights been struck a mari usque ad mare, to quote the Canadian motto.
This says something about how egregious Mr. Thornton’s $17-million compensation is. At issue is the $11.9-million signing bonus payment for a director whose day job is teaching at a university in Beijing. Mr. Thornton, a former Goldman Sachs executive, also sits on a dozen of committees and boards, including those of HSBC Holdings and of Ford Motor Co., among other minor distractions.
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