Barrick faces heat from top Canadian pension funds

Fri Apr 19, 2013 5:15pm EDT
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By Euan Rocha and Julie Gordon and Allison Martell

TORONTO (Reuters) - Barrick Gold Corp (ABX.TO: Quote), 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 recent 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 rose 1.1 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 in Toronto, on April 24.

Barrick declined comment on Friday, but in its proxy circular to shareholders ahead of the meeting, 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.   Continued...