Executives at Teranga Gold Corp. are set to be paid US$31-million in severance and other benefits, after agreeing to a takeover deal from a competitor, an amount that one stakeholder claims is egregious and further evidence of poor governance in the Canadian mining sector.
In November, Britain’s Endeavour Mining Corp. reached a friendly deal to buy Toronto-based Teranga in an all-stock transaction worth about $2.44-billion.
Earlier in the year, Teranga calculated that “change of control” payments to five top executives who could lose their jobs in the event of an acquisition would total about US$10-million, consisting of about US$7-million in cash severance, plus the benefit of the early use of stock options.
But Teranga now says it will pay top executives more than three times that amount. The bump is largely because of the surge in price of the shares last year, as much of the compensation being paid to executives is in the form of equity awards.
Teranga shares were trading at about $7 when it made the earlier estimate, based on a year-end 2019 calculation.
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