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An influential proxy adviser urged shareholders to oppose Barrick Gold Corp.’s compensation plans, saying it has concerns about chairman John Thornton’s “exorbitant” pay package.
Barrick increased Mr. Thornton’s compensation 36 per cent to $12.9-million (U.S.) for last year, citing his plans to improve the miner’s performance by slashing debt and focusing on its gold assets in the Americas.
“It comes as a considerable surprise that the company has once again decided to reward Mr. Thornton with such a generous pay package,” Glass Lewis & Co. said in a note released ahead of the miner’s annual meeting April 28. “We … consider the ongoing compensation arrangement with its chairman to be excessive and extremely risky, particularly given the company’s track record of exorbitant pay packages for Mr. Thornton,” Glass Lewis said.
A key Barrick shareholder agreed Mr. Thornton’s compensation was inappropriate. “I don’t know why he couldn’t freeze his salary,” said Seymour Schulich, a prominent Canadian businessman who owns 15-million shares of Barrick.
“Do I think there was a lack of sensitivity there? Yes. Do I think you go and kill people because of it? No. Out of 12 things I think (Mr. Thornton) has done, 11 things are right,” he said.
Mr. Schulich, who made his fortune in mining, said the Barrick board should have been sensitive to the fact that Barrick did not have a good year, even if that was due to weak gold prices and fallout from decisions made before Mr. Thornton’s time.
Glass Lewis acknowledged the chairman’s accomplishments, such as Barrick’s narrower loss last year, but said, “We nonetheless question whether such significant compensation during a year of poor returns for shareholders is warranted.”
Stock of the world’s biggest gold producer is down about 17 per cent since Mr. Thornton became chairman last April.
The negative recommendation comes a year after shareholders praised Barrick for overhauling its executive-compensation practices and shaking up its board.
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