Skip to main content
Open this photo in gallery:

Agnico Eagle Mines CEO Sean Boyd in the gold mining company's Toronto head office on Dec 19, 2019.J.P. MOCZULSKI/The Globe and Mail

Shareholders rebuked Agnico Eagle Mines Ltd. AEM-T for the second straight year for its executive pay practices, as its advisory “say on pay” resolution failed at the company’s annual meeting Friday.

Only 25 per cent of shareholders voted for the resolution, with the remainder opposed. Last year, the company had the worst say-on-pay vote result in Canada, with only 24 per cent of shareholders approving of its approach to compensation.

Executive chairman Sean Boyd said the company was “disappointed” with the result and Agnico Eagle will continue to make changes in its executive pay programs based on conversations with “many” shareholders this spring.

“Based on feedback in these recent meetings, we have committed to additional changes which will improve on the changes that we already made,” Mr. Boyd said at the meeting. “I’m confident based on the changes that we made coming into this meeting after last year’s meeting, and the commitments that we made during our discussions with our shareholders after the last few weeks, that we have this right and it’s time to move on.”

By flunking for a second year in a row, Agnico Eagle is the rare Canadian company to lose two consecutive votes. Wealth management company CI Financial Inc. failed in 2021 and 2022, the only firm last year to have lost two years in a row.

This year, two major proxy advisers recommended Agnico Eagle shareholders vote “no” once again in the non-binding ballot. Institutional Shareholder Services, one of the two advisers along with Glass, Lewis & Co., said Agnico Eagle’s compensation committee “has failed to adequately address pay-for-performance concerns, and significant problematic pay practices have been identified.”

In the proxy circular for the annual meeting held Friday, the company disclosed for the first time that it paid one-time bonuses to top executives to reward them for completing Agnico Eagle’s February, 2022, merger with Kirkland Lake Gold Ltd., including paying $10-million to Mr. Boyd, its former chief executive officer. That pushed Mr. Boyd’s total pay above $20-million, higher than the CEO pay of any other metals miner on the S&P/TSX 60.

The special merger bonuses, ISS said, “were made without considering rigorous performance criteria.” Since they were made in cash, they weren’t tied to the company’s long-term performance, ISS argued.

The company laid out an extensive explanation for the bonuses in the proxy statement to shareholders, citing “the transformational nature of the merger,” which cemented “the company’s position as a ‘super senior’ in the gold mining industry.” The company also bumped up its estimate of cost savings from the merger to US$425-million over the first 10 years from a previous forecast of US$320-million.

In defence of its pay, the company cited additional cost savings from the combination of three top executive roles into two, and the elimination of other senior positions. Agnico Eagle’s compensation policy changes also included making share awards in December, rather than earlier in the year, to avoid the problem that occurs when the shares fall during the year, as well as eliminating stock options for executives and toughening its terms for severance after future mergers.

The proxy advisers also recommended that shareholders vote against Robert Gemmell, the chair of the company’s compensation committee and a retired investment banker from Citigroup’s Canadian operations.

Mr. Boyd announced Friday morning that all directors received a majority vote of shareholders and were re-elected. However, the voting results filed with regulators late Friday night did not include any numbers for Mr. Gemmell, and said “the eleven candidates presented as nominees to the board of directors at the meeting were duly elected.” The company’s proxy statement had included Mr. Gemmell as one of 12 nominees.

Shareholders withheld large percentages of votes from the two other members of the compensation committee: 19.91 per cent from Martine A. Celej, a senior portfolio manager with RBC Dominion Securities Inc., and 12.59 per cent from Peter Grosskopf, the CEO of Sprott Capital Partners.

Major institutional investors often disclose their votes, either before or after a company’s annual general meeting. While a number of Canadian pension plans owning Agnico Eagle shares haven’t yet revealed their 2023 vote, Canada Pension Plan Investment Board voted “no” on say on pay and withheld its votes from Mr. Gemmell.

As of Dec. 31, CPPIB held 4,175,582 shares of Agnico Eagle, representing 0.85 per cent of shares outstanding, according to S&P Capital IQ.

Follow David Milstead on Twitter: @davidmilsteadOpens in a new window

Report an error

Editorial code of conduct

Tickers mentioned in this story

Your Globe

Build your personal news feed

Follow the author of this article:

Check Following for new articles