Barrick Gold became just the second Canadian company to lose a say on pay vote, as shareholders rejected an executive compensation resolution at the company's annual general meeting in Toronto on Wednesday.
The rejection was viewed as a condemnation of Barrick’s
board of directors, which last year agreed to pay US$17-million to co-chairman
John Thornton, including a US$11.9-million signing bonus.
Last week, a group of seven institutional investors put out
a press release outlining their concern over the decision to award the bonus
payment to Thornton.
“This amount, for a
signing bonus for a co-chairman of the board is, to our knowledge,
unprecedented in Canada
and is in addition to other compensation for the year for a total package of $17
million in 2012,” the release stated. “This compensation is inconsistent with
the governance principle of pay-for-performance and is therefore
disproportionate and sets a troubling precedent in Canadian capital markets.”
Signatories to the release included Quebec’s Caisse de depot et placement, the B.C.
Investment Management Corporation and the Canadian Pension Plan Investment
Board.
The compensation vote is non-binding, but Barrick CEO Jamie
Sokalsky said that management would “carefully consider” the views of
shareholders. The percentage figures for the vote were not provided.
“I think it’s a bit more than symbolic,” Barry Allan, senior
mining analyst at Mackie Research Capital told the Financial Post. “It’s
certainly a statement about what is appropriate executive compensation as seen
by the Canadian marketplace, saying basically [the salary] is not really
performance driven which has been an endemic problem, particularly in the gold
mining industry.”
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