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Barrick Gold Corp. publicly announced the pending retirement of chairman Peter Munk on Friday, after a week in which bankers faced a tepid response to the company’s $3-billion (U.S.) share sale.
Barrick said Friday that it expected to update investors before year-end on various initiatives to renew its board, following discussions this year between directors and institutional shareholders regarding compensation practices and governance. The initiatives include “succession in the chairman role at the company, consistent with Mr. Munk’s desire to retire as chairman,” Barrick said.
The message that Mr. Munk would announce his retirement by year-end had been quietly conveyed by some bankers working on Barrick’s big share sale over the past week, according to sources familiar with the situation. Some investors had indicated they wanted more clarity on the board revamp before agreeing to buy any stock.
One asset manager, speaking on condition of anonymity, said he was told by a banker advising Barrick on Monday that an announcement on Mr. Munk’s future would come by year-end. Another fund manager said he was told by a banker working on the share sale on Friday, Nov. 1 – the day after the offering was unveiled – that Mr. Munk’s announcement was forthcoming. He was then told on the following Monday that no such announcement was imminent and that instead, guidance would come soon.
A third person familiar with the situation said that Barrick had for some time internally laid out a succession plan for Mr. Munk as well as that of another long-term board member, former prime minister Brian Mulroney. This person also said that at least one large investor was given notice prior to the official announcement.
Barrick’s public disclosure was less specific. In March, Mr. Munk signalled that he was seeking a successor but gave no details about when he would go.
Last week, when Barrick announced third-quarter profit of $172-million, the company signalled that board changes would be announced by year end, but there was no specific reference to Mr. Munk. It was in an amended prospectus for the share offering, made public on Friday, that the company mentioned Mr. Munk by name and added guidance about the timing of his departure.
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