Barrick CEO Jamie Sokalsky to step down in management overhaul – by Peter Koven (National Post – July 16, 2014)

The National Post is Canada’s second largest national paper.

Barrick Gold Corp. is making sweeping changes to its senior management structure, appointing two presidents and announcing that chief executive Jamie Sokalsky will step down.

Executives Kelvin Dushnisky and Jim Gowans will become co-presidents of the company, while Mr. Sokalsky will leave as of September 15. CFO Ammar Al-Joundi is being given new responsibilities as senior executive vice president, and human resources head Darian Rich will take on a new role as head of talent management.

The surprise shake-up appears to be chairman John Thornton’s first big imprint on the company since Peter Munk retired in April and he assumed the top job on his own. Prior to that, he and Mr. Munk were co-chairmen.

Toronto-based Barrick, the world’s biggest gold producer, said this new management structure will help the company meet the “distinct demands and challenges” of the mining industry in the 21st century.

“These structural changes put an even greater emphasis on operational excellence, and will accelerate our portfolio optimization and cost reduction initiatives, while fostering a partnership culture both inside the company and externally,” Mr. Thornton said in a statement.

“Internally, that means our people will be financially invested for the long-term in Barrick’s success, and personally committed to a culture of teamwork that balances individual and collective responsibility and accountability. Externally it means building enduring partnerships with the key stakeholders who are central to our success, including long-term investors, host governments, local communities and NGOs.”

Mr. Sokalsky’s departure was unexpected. Since taking over as CEO in mid-2012, he repaired Barrick’s balance sheet, cut costs, improved free cash flow and suspended the troubled Pascua-Lama project. He earned praise from investors and analysts for these measures, which helped Barrick weather the steep drop in the gold price last year.

“I’m fortunate to have worked with so many great people over my career at Barrick and I’m particularly proud of what we have been able to accomplish over the past two years with the support and dedication of the entire Barrick team,” Mr. Sokalsky said in the statement.

“It is now time for the next phase of the company’s development. I believe our new management structure will allow Barrick to address successfully the key challenges facing the mining industry today, and in turn, will position the company to deliver superior returns to its shareholders in the future.”

TD Securities analyst Greg Barnes said the shake-up is not a complete shock, as he expected Mr. Thornton to establish his own management team.

“The fact that a CEO has not been named suggests that [Mr. Thornton] will continue to be very active in the management of the company in a de facto CEO role,” Mr. Barnes said in a note.

The management changes comes less than three months after merger talks between Barrick and Newmont Mining Corp. broke down. Mr. Sokalsky would have also lost the CEO job if that deal closed, as Newmont CEO Gary Goldberg was poised to become CEO of the combined company.

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