The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. Editor John Cumming MSc (Geol) is one of the country’s most well respected mining journalists. jcumming@northernminer.com
Businessman and Bay Street veteran Peter Crossgrove, the one-time Placer Dome CEO and long-time Barrick Gold director, published his memoirs last year, and it makes for some lively and insightful reading, especially in light of Barrick’s newly revamped executive compensation program.
In his book titled “Boardroom games: You’re fired! When core values, respect and meaningful business practices are compromised for money and prestige,” Crossgrove is blunt in his criticism of the Barrick board, from which he was booted a couple of years ago to make way for Goldman Sachs’ John Thornton, who will become full Barrick chairman at the April 30 annual meeting, as founder Peter Munk retires.
“What do I think Barrick has to do to recover?” writes Crossgrove in 2013. “First of all, I would say they should find at least three directors who know the operating side of the business and form a technical committee . . . I suggest the chair, vice-chair and board members’ salaries be cut by 70%. They should only allow the chief operating officer the use of the corporate jet and get rid of the advisory board, which is a large expense and should be deleted . . . in 22 years I can only recall one meeting with the advisory board, whom I believe meet one day a year and are paid $100,000 per year.”
He noted that while Barrick’s stock had lost more than half its value in the prior year, “the directors have increased their pay from approximately $120,000 per year to over $220,000 annually. I have made this statement repeatedly because none have any mining or geological experience.” (Of course, long-time director Brett Harvey is a mining engineer, but Crossgrove notes he’s busy running Pittsburgh-based major CONSOL Energy.)
Crossgrove adds that “Peter Munk goes to Switzerland in the winter and likes to go to Montenegro in the summer. Even though he’s on the phone every day, there’s no doubt about it — it’s just not the same as being present. Peter doesn’t visit the mines . . . nobody else really visits the mines . . . they don’t even show up for openings.
“Most of the directors of Barrick have never been to a mine, and if they did, they wouldn’t know what the hell they were looking at.”
Fast-forward to March 31, and Barrick has introduced its new executive compensation program, prompted by the shareholder revolt last year over the increasingly rich and growing pay packages for Barrick execs, even as the company’s share price nosedived.
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