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MWM

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Alias Born 03/31/2006

MWM

Re: None

Friday, 04/19/2013 2:58:35 PM

Friday, April 19, 2013 2:58:35 PM

Post# of 1133
ABX probably about time to buy...

Pension funds question Barrick pay deal as pressure builds

Fri Apr 19, 2013 2:00pm EDT
(adds details on Thornton; Glass Lewis comment)
By Euan Rocha, Julie Gordon and Allison Martell

(Reuters) - Barrick Gold Corp, already under pressure from setbacks at its largest development project and a slump in the price of gold, now faces a shareholder revolt over a "troubling" payment to a member of its board.

A group of Canada's top pension funds, small but significant shareholders in the world's largest gold miner, said on Friday it opposes Barrick's $11.9 million signing bonus for co-chairman John Thornton, the man tipped as the miner's next chairman.

"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," the group said in a statement.

Barrick has faced a raft of problems in the last few months, including a slumping gold price, and a partial halt to work at one of its main growth projects, Pascua-Lama, on the border of Argentina and Chile.

Shares of the company have fallen more than 37 percent this month and have more than halved in value over the last year.

The stock was down almost 1 percent on Friday, after the group of funds said it would vote against Barrick's advisory resolution on executive compensation and against the election of the members of the compensation committee at Barrick's annual meeting, on April 24 in Toronto when it will also report results.

Barrick declined comment on Friday, but in its proxy circular to shareholders ahead of next Wednesday's, Barrick said the advisory resolution on executive compensation is "not binding" on the board.

"The board and, in particular, the compensation committee will consider the outcome of the vote as part of its ongoing review of executive compensation," it added.

SHAREHOLDER REVOLT

Thornton, widely expected to succeed Barrick founder and Chairman Peter Munk, has been a director of the company since February, 2012 and is also on the boards of China Unicom (Hong Kong) Ltd, HSBC Holdings, and Ford Motor Co .

A former president at Goldman Sachs, he has also served on the boards of News Corp and Intel Corp , among others.

In a letter to shareholders released in March, Munk said it was time for Barrick to "consider a path to new leadership at our board level." He listed the qualifications Barrick was looking for, and singled out Thornton as his likely successor.

The pension funds are not alone in expressing concern about payments from Barrick. Earlier this month, proxy advisory firm Glass Lewis, advised its clients to vote against Barrick's executive compensation plan.

"We believe shareholders should question the nature of these payments and if it is the best use of the company's capital, particularly following the company's results for the year," Glass Lewis said in its April. 6 report.

Barrick reported a net loss of $665 million in 2012, due to a large writedown. Excluding items, the company reported profits of $3.83 billion, down from $4.67 billion, a year earlier.

The group of funds opposing the payments comprises Canada Pension Plan Investment Board, the Ontario Teachers' Pension Plan and Caisse de dépôt et placement du Québec, as well as Alberta Investment Management Corp; British Columbia Investment Management Corp; Hermes Equity Ownership Services; Ontario Municipal Employees Retirement System; and Public Sector Pension Investment Board.

The group represents about 3.46 percent of Barrick's ownership, or some 34.8 million shares outstanding, according to Thomson Reuters data and fund disclosures. That stake was worth around $640 million at Thursday's closing price of C$18.44. (Additional reporting by Andrea Hopkins; Editing by Janet Guttsman and Dan Grebler)




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