Seven major Canadian pension funds and one international fund have launched a formal protest against what they say is an “unprecedented” signing bonus of $11.9-million (U.S.) to Barrick Gold Corp. co-chairman John Thornton.
The group -- including the Caisse de dépôt et placement du Québec, the Ontario Municipal Employees Retirement System (OMERS), Ontario Teachers’ Pension Plan and the Canada Pension Plan Investment Board -- says $11.9-million for a signing bonus for a co-chairman of the board is “to our knowledge unprecedented in Canada and is in addition to other compensation for the year for a total package of $17 million in 2012.”
It adds that such compensation is “inconsistent with the governance principle of pay-for-performance and is therefore disproportionate and sets a troubling precedent in Canadian capital markets.”
All eight members – including Hermes Equity Ownership Services, representing assets on behalf of more than 30 major institutional funds worldwide – said in a news release Friday they plan to vote at the annual meeting against both an advisory resolution on executive compensation and the election of the members of the Barrick board’s compensation committee.
They have also sent a letter expressing their concern in a letter to Barrick chairman Peter Munk.
The institutional investors say they collectively manage assets of $916-billion.
At a time when it is failing to reach its financial and operating targets, Barrick said in its recent circular that Mr. Thornton’s signing bonus was “an inducement for Mr. Thornton to assume the Co-Chairman position and make a substantial commitment of his time to Barrick.”
Mr. Thornton was appointed in June 2012.
The circular says that six executives at the company were paid a total of $47.4-million, with one who is departing getting an additional $12-million. Barrick also raised the target size for executive bonuses.
Company founder Peter Munk received $4.3-million, up from $3.7-million in 2011.
Former Prime Minister Brian Mulroney, a director, was paid close to $2.5-million for his role as a global affairs adviser and for “acting as an ambassador.”
There was no immediate comment from Barrick on the issue.
