Barrick volte-face on CEO raises questions
By Euan Rocha and Julie Gordon
TORONTO (Reuters) - Barrick's surprising ouster of Chief Executive Aaron Regent on Wednesday raised more questions than it answered for anxious investors, who are left wondering why the world's top gold miner would axe its CEO just a month after singing his praises.
"I must congratulate you, Aaron, because indeed this company is firing on all cylinders," Barrick founder Peter Munk told shareholders at the company's May 2 annual meeting. "We do share your sense of accomplishment and achievement."
Yet Barrick abruptly replaced Regent with Chief Financial Officer Jamie Sokalsky. It said it is disappointed that its stock has virtually stagnated since Regent took the helm three years ago.
"Gold stocks haven't done anything for years. It has nothing to do with Aaron Regent, it has to do with the fact that people don't want to own gold stocks," said Barry Schwartz a portfolio manager with Baskin Financial Services in Toronto.
"I'm sure there's more to the story than what's being told to us. Obviously there was disagreement between the CEO and the board, and he's gone," said Schwartz. "It's a tough business to be a CEO of a gold-mining company over the last few years, but that's life in the big city."
Barrick declined to comment further on the reasons for the management shake-up.
With a ringing endorsement just a few weeks ago, most investors are very puzzled by Barrick's move, even more so because Regent and other executives received annual performance incentives above target, according to a recent information circular to investors. Continued...