Barrick Redefines Compensation, Introduces Most Shareholder-Friendly System in Canada
March 31, 2014 (Source: Marketwired) — Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) (Barrick or the “company”) today announced the details of a new executive compensation program that fundamentally aligns compensation practices with the long-term interests of shareholders based on the principle of pay-for-performance.
“We believe our new system features the most shareholder-friendly, long-term compensation program of any Canadian company today, as well as among our peers in the global mining industry,” said Brett Harvey, Barrick’s Lead Director and Chairman of the Compensation Committee. “Put simply, our management team will now be owners, receiving a significant portion of the compensation they earn in the form of common shares that cannot be sold, fully aligning the long-term interests of executives and shareholders.”
Over the course of 2013, Barrick’s Compensation Committee engaged extensively with shareholders representing more than 30 percent of Barrick’s outstanding common shares, to ensure that their views were reflected in the company’s approach going forward.
As part of Barrick’s new compensation approach, participating executives will be assessed on their collective performance, as measured against a transparent scorecard disclosed to shareholders in advance. The company’s long-term scorecard will assess participating executives on eight performance measures including return on invested capital, dividends to shareholders, capital project performance and free cash flow. Scores will be published to shareholders at the end of each year, ensuring transparency of the process. A majority of compensation awarded will be long-term in nature, in units that ultimately convert into Barrick common shares. These shares cannot be sold until a participating executive retires or leaves the company. Shares will be purchased on behalf of participating executives on the open market, resulting in no dilution to shareholders.
If earned, a smaller portion of total compensation will be awarded in the form of an annual bonus. Annual bonuses will be determined by the Compensation Committee based on its assessment of each executive’s individual performance in achieving short-term operating priorities and specific initiatives that fall within the executive’s sphere of accountability.
The company has also adopted new minimum share ownership requirements that are among the highest of any Canadian public company, including 10 times base salary for the Chief Executive Officer.
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Additionally, Barrick has implemented a new Clawback Policy for incentive compensation that goes beyond the yet-to-be implemented requirements of the U.S. Dodd-Frank Act.
Full details on the 2014 executive compensation program and 2013 compensation decisions are contained in Barrick’s Information Circular for the 2014 Annual and Special Meeting of Shareholders, available at www.barrick.com/agm.
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain information contained or incorporated by reference in this press release and Barrick’s Information Circular for the 2014 Annual and Special Meeting of Shareholders referenced herein, including any information as to our strategy, projects, plans or future financial or operating performance, or performance goals or compensation decisions relating to the 2014 executive compensation program constitutes “forward-looking statements”. All statements, other than statements of historical fact, are forward-looking statements. The words “expect”, “intend”, “may”, “will” and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the company, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: fluctuations in the spot and forward price of gold, copper or certain other commodities (such as silver, diesel fuel and electricity); changes in national and local government legislation, taxation, controls or regulations and/or changes in the administration of laws, policies and practices, expropriation or nationalization of property and political or economic developments in Canada, the United States and other jurisdictions in which the company does or may carry on business in the future; failure to comply with environmental and health and safety laws and regulations; timing of receipt of, or failure to comply with, necessary permits and approvals; diminishing quantities or grades of reserves; increased costs, delays, suspensions and technical challenges associated with the construction of capital projects; the impact of global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future cash flows; adverse changes in our credit rating; the impact of inflation; operating or technical difficulties in connection with mining or development activities; the speculative nature of mineral exploration and development; risk of loss due to acts of war, terrorism, sabotage and civil disturbances; fluctuations in the currency markets; changes in U.S. dollar interest rates; risks arising from holding derivative instruments; litigation; contests over title to properties, particularly title to undeveloped properties, or over access to water, power and other required infrastructure; business opportunities that may be presented to, or pursued by, us; our ability to successfully integrate acquisitions or complete divestitures; employee relations; availability and increased costs associated with mining inputs and labor; and the organization of our previously held African gold operations and properties under a separate listed company.
In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance, or inability to obtain insurance, to cover these risks). Many of these uncertainties and contingencies can affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements made in this press release are qualified by these cautionary statements. Specific reference is made to the most recent Form 40-F/Annual Information Form on file with the U.S. Securities Exchange Commission and Canadian provincial securities regulatory authorities for a discussion of some of the factors underlying forward-looking statements.
The company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.
Raj Shah has professional experience working for over a half a dozen years at financial firms such as Merrill Lynch and First Allied Securities Inc., ... <Read more about Raj Shah>