Barrick Gold Corp cuts executive chairman John Thornton’s pay by 76% after investor criticism

Barrick Gold Corp.awarded Executive Chairman John Thornton US$3.08 million as a whole compensation, 76 percent under this past year, after he threw in the towel his bonus within the wake of investor criticism of pay packages at the world’s largest gold producer.

Thornton, 62, received a salary of US$2.5 million, US$204,090 in other compensation along with a pension value of US$375,000, the Toronto-based miner said Thursday in a regulatory filing. Thornton forfeited US$3.4 million of incentives for the year, the organization said. The compensation compares with US$12.9 million in 2014, which included US$9.5 million of incentive pay.

Thornton “elected to forfeit all of the incentive compensation earned for 2015 in order to better reflect the experience of our shareholders last year,” Barrick said in the filing.

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Under Scrutiny

Barrick’s compensation and governance received scrutiny after the company revealed in 2013 that Thornton, a former Goldman Sachs Group Inc. president, received an US$11.9 million signing bonus. The organization has overhauled the actual way it determines senior executives’ pay, though last year it still drew the ire of three of Canada’s largest pension funds on executive pay and company governance.

Last month, Thornton said the company has responded by changing the actual way it pays executives.

“When we said last year we’ll fix this, we’ll repair it,” Thornton said within an interview in New York at the end of February. “In fact we’ve fixed it.”

According towards the filing, Barrick President Kelvin Dushnisky was awarded US$4.35 million in compensation for 2015, including a salary of US$938,400, share-based awards of US$1.58 million and US$1.41 million in incentive compensation. The entire is down 3.1 percent from 2014, when Dushnisky was awarded US$4.48 million for sharing a co-president role with James Gowans.

‘Interesting’ Timing

Barrick has been working to reduce its debt, which swelled up to US$15.8 billion in 2013, after the company expanded its footprint with the $7.3 billion purchase in 2011 of copper producer Equinox Minerals Ltd. Since 2013, Barrick has cut assets, jobs and costs and adopted a decentralized managerial model more akin to a tech firm than the usual miner. Debt was down to US$10 billion as of Dec. 31 and the company is seeking to halve that within the “medium term.”

It’s “interesting” Thornton’s pay was lowered each year when the company improved its performance, said Ken Hoffman, a senior industry analyst at Bloomberg Intelligence.

“He’s kind of saved the core of the company,” Hoffman said Thursday in an interview on Bloomberg TV Canada. “He’s reduced your debt load tremendously, he’s done some deals to be able to sort-of reshape the corporation, and it’s been year to date the single-best performing major.”

–With assistance from Danielle Bochove.

Bloomberg News