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Peter Munk, a Hungarian refugee whose ambitions led him to build hotels in the South Pacific and create stereos for Frank Sinatra, said goodbye to Barrick Gold Corp., the company he founded three decades ago and turned into the world’s biggest gold producer.
The 86-year-old Canadian businessman stepped down as the company’s chairman on Wednesday, a bittersweet moment for Mr. Munk, who has described Barrick as his life and the one thing that keeps him up at night.
“You can take, maybe, Munk out of Barrick. You can’t take Barrick out of Munk,” he said at the company’s annual meeting of shareholders in Toronto.
Mr. Munk knew nothing about gold mining when he took a stake in a small mine near Wawa, Ont., in 1983. He spent the next 30 years buying out rivals and building Barrick into a gold giant.
He has been succeeded by former Goldman Sachs executive John Thornton, who he says shares his vision of transforming Barrick into a Canadian-based mining titan with production in all types of metals.
Mr. Thornton has been waiting in the wings for more than a year, first serving as a board adviser and then as Barrick’s co-chairman. He becomes executive chairman at a critical time in Barrick’s history.
The company is on the mend after it borrowed billions to buy Equinox Minerals and grossly miscalculated the costs to build its Pascua Lama project in the Andes. To deal with depressed gold prices, the miner has divested more than $1-billion (U.S.) of non-core assets, shrunk its production and changed its strategy of growth in favour of discipline.
Shareholder anger over Barrick’s performance and its decision to award Mr. Thornton with an $11.9-million signing bonus prompted the miner to overhaul its executive compensation plans as well as its board.
In a victory for Barrick, shareholders voted on Wednesday for the company’s new pay arrangements and its slate of four new independent directors.
But concerns linger. Three of the eight Canadian pension funds that rejected Mr. Thornton’s pay last year voted against the new plan on Wednesday, citing continued concerns about the executive chairman’s compensation. One of the funds, the Ontario Teachers’ Pension Plan, withheld votes for members of Barrick’s compensation committee.
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