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Barrick CEO Mark Bristow stands to earn as much as US$18-million at the company this year.

HENRY NICHOLLS/Reuters

Barrick Gold Corp. shareholders sent a message to the company in 2013 by opposing a US$17-million pay package for new recruit John Thornton. Now, the gold miner may end up paying its new chief executive officer even more.

Mark Bristow took over as Barrick’s CEO as it completed its recent acquisition of Randgold Resources Ltd., where he was CEO. He stands to earn as much as US$18-million at Barrick this year, subject to performance measures being met.

In a regulatory document, Barrick disclosed that Mr. Bristow’s compensation will include a salary of US$1.8-million and a cash bonus of up to three times his salary that could be worth US$5.4-million. In addition, he would receive stock units up to six times his salary that could be worth US$10.8-million. The bonus and stock compensation will be paid based on performance. Mr. Bristow’s salary at Barrick will be identical to what he made at Randgold. His cash bonus range is similar, but Barrick’s stock-awards plan is more generous.

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“It feels large,” said Benoit Gervais, veteran precious-metals money manager with Mackenzie Financial, of Mr. Bristow’s compensation range, especially considering Barrick will also be on the hook for another sizable package for Mr. Thornton, who remains with the company as executive chair. Mr. Thornton’s 2018 compensation hasn’t yet been disclosed, but in 2017 he earned US$7.7-million. Unlike most global gold companies, where typically one individual (the CEO) has top management powers, Barrick’s upper tier management duties are split between the CEO and the executive chair.

Mr. Bristow defended his compensation and said it will be up to shareholders to decide if it’s fair.

“I didn’t get a sign-on bonus, or anything fancy,” he said in an interview this week.

And his pay package had no bearing on his decision to agree to Barrick’s recent zero-premium US$6-billion takeover of his previous employer, Randgold.

“There’s no incentive to do this transaction," he said. "I didn’t even get a pay rise.”

Barrick is no stranger to compensation-related controversies. Two times in the past six years, the gold company has lost non-binding “say-on-pay” votes at its annual general meeting in light of excessive compensation paid to Mr. Thornton. In particular, shareholders at the 2013 AGM decried the US$11.9-million signing bonus he earned when he joined the gold miner in 2012.

After losing a say-on-pay vote in 2013, Barrick subsequently cut Mr. Thornton’s compensation to US$9.5-million before raising it again the following year to US$12.9-million. But with its share price losing one third of its value in 2014, that pay package once again angered shareholders, with Barrick losing a second say-on-pay vote in 2015.

Is Mr. Bristow’s pay package fair?

“Bristow has a long history of outperformance," Mackenzie’s Mr. Gervais said. “He’s worth more than the average, but the average is all screwed up.”

Mr. Gervais believes that the compensation system for the entire Canadian gold industry is in drastic need of change. He says compensation committees at Canadian gold companies should be remunerating executives based on what their best-in-class global mining peers are making. For Barrick, that would mean offering Mr. Bristow a package similar to the US$4.5-million Jean-Sébastien Jacques, CEO of giant global diversified miner Rio Tinto Group, made in 2017. Instead, he says, when Canadian gold companies recruit a new CEO, most times the pay is set based on what their higher-paid Canadian peers make. It’s a system that sometimes sees even the CEOs of small, underperforming gold producers taking home astronomical pay packets.

During his more than 20 years at Randgold, Mr. Bristow never achieved his top compensation level. At Barrick, he will have his work cut out for him. Among his to-do list is to solve an almost two-year export ban in Tanzania on gold concentrate at subsidiary Acacia Mining PLC, try to sell underperforming mines for fair prices and address a recent uptick in costs.

Shareholders won’t have the opportunity to vote on Mr. Bristow’s compensation package for a while. His compensation for this year won’t be disclosed until the spring of 2020 with the annual meeting and the say

Editor’s note: (Feb. 15, 2019) An earlier version of this story said Zambia had an almost two-year export ban on gold concentrate. In fact, it was Tanzania.

-on-pay vote to follow.

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