Barrick Gold Corp. had promised to usher in a new era of discipline in gold mining when it announced a blockbuster plan to take over U.S. rival Newmont Mining Corp. in a US$17.8-billion deal.
Now that it has dropped its major offensive, one of the industry’s chronic problems – excessive executive pay – has bubbled up again. This time, the target of investor wrath is Ian Telfer, chairman of Goldcorp Inc.
Mr. Telfer stands to pocket US$12-million in Goldcorp’s sale to Newmont – a deal that predated the Barrick-Newmont proposal and could have been scrapped because of it. That’s nearly three times what had been reported as his retirement package before last week. Following the steady deterioration in the company’s stock price over the past decade, it has Goldcorp investors spitting fire.
“Preposterous,” is how Mackenzie Investments portfolio manager Benoit Gervais described the payment.
The Shareholders Gold Council, formed by prominent institutional investors last year to agitate for more alignment of corporate performance and executive pay, blasted the windfall as “another showcase example of directors choosing cronyism over the interests of shareholders.”