TORONTO/VANCOUVER (Reuters) - Outgoing Barrick Gold Corp (ABX.TO) (ABX.N) founder and Chairman Peter Munk gave a spirited defense of his replacement, John Thornton, on Wednesday days after his successor was lambasted by a rival gold company and investors criticized his pay package.
In a farewell speech to the company he founded 31 years ago, Munk told shareholders at Barrick's annual meeting in Toronto that he is certain that Thornton is "the right guy" to take over as chairman of the world's biggest gold company.
"John Thornton, in my opinion, was going to be the very best investment in my 32 year legacy," said Munk, 86, who founded Barrick in 1983 and built it into the world's top gold miner with an aggressive string of acquisitions.
"That includes Goldstrike, and that wasn't exactly a bad one," he added, referring to the Nevada mine that was one of his earliest acquisitions and helped to build Barrick into a top gold producer.
On Monday, the chairman of Newmont Mining Corp (NEM.N), Vincent Calarco, slammed Thornton, saying that while the Denver-based miner's team found recent talks with Barrick's management constructive, the same could not be said of discussions with Thornton.
Calarco's comments came after failed merger talks between Barrick and Newmont, with the world's two largest gold miners publicly accusing each other of scuppering a deal favored by some investors.
Munk did not directly discuss Calarco's comments but said he had been "hurt and confused" a year ago by shareholder outrage at Thornton's $11.9 million signing bonus.
Thornton, 60, a former second-in-command at Goldman Sachs Inc (GS.N) and regarded as an expert on China, was hand-picked by Munk as his successor, and named Barrick co-chair in June 2012.
Barrick has since revamped its executive pay plan, and more than 80 percent of shareholders who voted backed the plan on Wednesday, Chief Executive Jamie Sokalsky said. He also said all the directors proposed by Barrick for its board had been elected.
However, the Ontario Teachers Pension Plan, one of Canada's largest institutional fund managers, said it had voted against the executive pay plan as it said Barrick's compensation committee had not been prudent in its award to Thornton. Thornton earned $9.5 million in 2013.
British Columbia Investment Management Corp, another large Canadian institutional investor, also voted against the compensation scheme.
"While we recognize that many changes have been made to compensation going forward, we continue to be concerned with discretionary awards being made to the incoming chair," the fund said in an email.
The Canada Pension Plan Investment Board, which manages investments for Canada's national pension plan, also said it planned to vote against the plan.
Earlier on Wednesday, Barrick reported a steep drop in first-quarter earnings and cut its forecast for 2014 copper production but the results were slightly ahead of market expectations and the company's shares inched higher.
Barrick cut its copper production forecast to between 410 and 440 million pounds, from between 470 and 500 million pounds, blaming damage to the main conveyor at its Lumwana mine in Zambia. It does not expect the incident to materially affect its earnings.
A drop in metal prices and lower gold volumes hurt Barrick's profit during the quarter through March 31, with net earnings attributable to shareholders plummeting to $88 million, or 8 cents a share, from $847 million, or 85 cents, a year earlier.
Excluding currency losses and unusual items, adjusted earnings fell to $238 million, or 20 cents a share, from $923 million, or 92 cents, a year earlier. Analysts surveyed by Reuters expected it to earn 19 cents a share.
Barrick's shares were 3 Canadian cents higher at C$19.38 on the Toronto Stock Exchange. Other gold stocks were mixed.
Barrick, which has mines in the Americas, Australia and Africa, produced 1.6 million ounces of gold in the first quarter, down from 1.8 million ounces a year earlier. Barrick has sold several higher-cost mines over the past year.
Additional reporting by Ashutosh Pandey in Bangalore; Editing by Bernadette Baum and Andrew Hay