The chair of Barrick Gold says he has heard investor concerns about executive compensation at the gold miner "loud and clear," and vows change.
John Thornton told attendees of the company's annual general meeting in Toronto on Monday that as much as three-quarters of investors voted in favour of a non-binding motion to change the way the company compensates its executives.
Thornton saw his own compensation rise to almost $13 million last year, up from $9.5 million the year previously — more than a third — despite overseeing the company during a time when the stock lost about a third of its value.
"We have heard you loud and clear," Thornton said.
The company had become the focus of a recent campaign, led by the Canada Pension Plan Investment Board, to change the metrics by which the company decides on executive compensation. The company said it had already overhauled its evaluation metrics, but supporters of the resolution maintained it didn't go far enough.
The way the company determines executive compensation "is structured in a way that does not align pay with performance" the British Columbia Investment Management Corp. said in a statement.
Despite passing easily, the motion was non-binding, which means the company isn't legally obligated to do anything.
Barrick faced a similar vote at both of its past two annual meetings, but those votes failed. At the one two years ago, Barrick founder Peter Munk defended the money Barrick paid Thornton to acquire him in the first place, saying that they had to pay him that much because other companies would have done so, to poach him away.
The vote comes a week after Canadian bank CIBC faced a similar shareholder revolt, with 57 per cent of shareholders voting against the company's exorbitant payouts to recently departed executives. That vote was also non-binding.
Richard Leblanc, a corporate governance expert at Toronto's York University, said he's happy to see big shareholders adopt "less of a Canadian, old-school, genteel mentality" and speak up.
"I think what CIBC and Barrick say is that investors are becoming less accepting and less tolerant," he said Leblanc. "This is long overdue in Canada."