(Bloomberg) — Barrick Gold Corp. Executive Chairman John Thornton wants his executives to have skin in the game. To do that, he’s rolling out a Wall Street-style partnership to give them significant stakes in the world’s largest gold producer.
Barrick this month named its inaugural 35 partners, a group that includes mine managers as well as the most senior officers at its Toronto headquarters, according an internal memo obtained by Bloomberg.
Partners will receive long-term incentive-based pay in the form of restricted stock that can’t be sold until retirement or departure. The shares will comprise more than 50 percent of total compensation for the six most senior executives in the partnership if targets are met, and after five years all the partners will be required to hold stock worth multiples their base salaries, according to Andy Lloyd, a Barrick spokesman.
A partnership model is something more typically associated with financial services, according to Steve Chan, a consultant who advises on corporate pay. Its adoption by Thornton, a one-time senior banker at Goldman Sachs Group Inc., is indicative of his intentions to return Barrick to its entrepreneurial roots after becoming weighed down by debt amid falling gold prices.
“We are restoring both the model and the mindset of partnership,” the company said in the memo, which was signed by six of its most senior executives. “Like Barrick’s founders, today’s leaders will rise and fall together as owners of the business.”
Since Thornton replaced founder Peter Munk as chairman in April, Barrick has sold some of its least profitable mines and overhauled its management. Chief Executive Officer Jamie Sokalsky left in September, while Chief Financial Officer Ammar Al-Joundi departed last month and was replaced by Shaun Usmar, a former Xstrata Plc executive.
Barrick started revising its compensation policies after Canada’s biggest pension funds said in 2013 that awarding Thornton an $11.9 million signing bonus set a “troubling precedent.”
For the rest of this article, click here: http://www.bloomberg.com/news/articles/2015-03-26/barrick-gold-mints-35-partners-as-it-seeks-revitalization