Shareholders of Barrick Gold. Corp. voted against an executive pay resolution at the company's annual meeting on Wednesday as the gold miner launched a plan to slash at least half a billion dollars in costs across its operations.
Barrick had come under fire for a $11.9-million signing bonus paid to co-chairman John Thornton that was part of a $17-million payment package he received last year.
The motion that was voted down asked shareholders to approve the way the company pays its executives.
The largely symbolic vote results followed a lengthy speech by founder Peter Munk who insisted that Thornton's pay was necessary for an executive that was being hunted by other organizations.
"We had to secure him ... because of the competitive environment," he told shareholders in the packed theatre at the Metro Toronto Convention Centre.
Munk said he believes in paying executives on their performance at the company, before insisting Thornton was an exception to his rule.
"It was hard to have someone paid on performance if he would not have been able to join to perform," he said of Thornton, who took the co-chairman job last year.
Munk also weighed the signing bonus against using that same money to invest in extra mining equipment, in this case six shovels for a mine.
"I promise you that John will do more for you than six more shovels," he said.
But shareholders weren't convinced, though it didn't come as much of a surprise. Last week, eight organizations, which include pension funds from across Canada and elsewhere, said they would vote against both the executive compensation resolution.
Board to 'carefully consider' vote
Chief executive Jamie Sokalsky said the board would "carefully consider our shareholders' perspectives." He did not provide any further details on the vote.
Executive pay is one of many concerns plaguing the company, which has been hit hard by falling gold prices and delays as its Pascua-Lama project in Chile. Shares of the company, which fell to a 20-year low last week, were trading up $1 to $19.01 on the Toronto Stock Exchange on Wednesday afternoon.
The annual meeting was attended by more investors than usual and a heavier police presence, a factor Munk pointed out in his speech.
"Bad times bring out more people," he said.
Sokalsky told the annual meeting that Barrick was determined to be disciplined and focus on producing returns for investors.
"This has been a tough year for Barrick and our shareholders. It seems as if our company has been under siege by several disappointments and setbacks," he said.
"I feel your disappointment, and I give you my commitment that we will do everything we can to ensure Barrick remains a strong and prosperous company, and improve our share price."
Barrick reported $923 million US or 92 cents per share of adjusted earnings in the first quarter, down from $1.1 billion or $1.10 per share in the comparable period last year but better than analyst estimates.
Net income before adjustments, reported in U.S. dollars, was $847 million or 85 cents per share, down from $1.04 billion or $1.04 per share in the first quarter of 2012. Those results beat the consensus estimate of 85 cents per share or $852 million of adjusted earnings and 81 cents per share or $865 million of net income.
Barrick said the main reason for the lower profit was lower gold and copper prices and reduced volumes sold during the quarter.