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TORONTO — Barrick Gold Corp. unveiled a new compensation package for executives Monday, a year after management faced heavy blowback for a generous signing bonus that made incoming chairman John Thornton one of the highest paid executives in Canada.
The world’s largest gold miner said it had scaled back Mr. Thornton’s pay for 2013 to US$9.5-million, compared with US$17-million the prior year. Mr. Thornton’s original pay package, which included a US$11.9-million signing bonus, caused a rare rejection last year by shareholders of the company’s executive compensation plan.
“We heard shareholders loud and clear,” said Brett Harvey, Barrick’s lead director, adding that he saw the new compensation model as one that others in the industry are “going to follow.”
The new “scorecard” system will see Barrick pay a large chunk of compensation in stock that executives will have to hold until they retire or leave the company. It will also base salary on a number of performance metrics, including delivering planned cash flow, achieving cost targets and meeting earnings expectations. As chairman, Mr. Thornton will not fall under the new scheme.
In addition to Mr. Thornton’s reduced pay package, Barrick said it awarded outgoing chairman and company founder Peter Munk $3.9-million in 2013, down from $4.2-million in 2012. Chief executive Jamie Sokalsky also saw his pay scaled back to US$7.7-million from US$11.4-million in 2012. The company said it has frozen base salaries for 2014.
Pawel Rajszel, analyst at Veritas Investment Research, said it is unclear whether the changes will be enough to appease Barrick’s investors, who were upset last year with what they saw as generous executive compensation for a company that has seen its stock fall by 58% in the past two years.
“The way Thornton’s role has been marketed by Barrick is he has all these Asian connections, … but the problem with that is, so far we don’t see any results, he said. “That could change, but investors might be asking questions again.”
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