Ian Madsen is a senior policy analyst with the Frontier Centre for Public Policy.
The Goldcorp Inc. merger with Newmont Mining Corp. has many people bemoaning the loss of yet another large, independent Canadian company to an opportunistic acquirer.
With the consequent loss of many Goldcorp executive and other head office jobs, the real tragedy is that too many Canadian companies have aimless, dysfunctional, or outright bad managers who rarely face the ramifications of their poor decisions.
Its not just left-leaning people who are frustrated with those at the top receiving enormous salaries, bonuses, performance incentives, stock options and other emoluments. So do professional, institutional and ordinary shareholders.
Numerous studies have shown that there can even be an inverse relationship between executive compensation and share price or total stock performance. A major landmark study by MSCI in 2016, for example, covered 800 U.S. companies in the 2006 to 2015 period.
Goldcorp’s performance is just one stinker among many. Its share price hit $54.91 on Sept. 4, 2011, then has headed mostly downhill ever since. As recently as Feb. 12, 2017, it was at $22.76. The current offer, by ravenous Newmont Mining of Denver, subject to changing share prices and other developments, is for about C$15.26 per share of Goldcorp, not much above its 52-week low of $11.
For the rest of this article: https://troymedia.com/2019/03/19/shareholders-hurt-underperfoming-companies/