Proxy advisory firm Glass, Lewis & Co. is censuring Barrick Gold Corp. ABX-T for paying its executive team excessive cash bonuses in a year the company reported five fatalities at its mine sites.
Glass Lewis in its recent proxy paper recommends investors vote against Barrick’s non-binding vote on executive compensation at its annual meeting because of the disconnect between pay and performance at the company around safety. It said Barrick’s own assessment of its safety record is itself an issue.
Glass Lewis also recommended that investors withhold their votes for three directors, Christopher Coleman, Brian Greenspun and Brett Harvey, who all sit on the company’s compensation committee.
Many investors rely heavily on proxy advisory firms before casting their votes in annual meetings. Barrick has lost several say-on-pay votes in the past. While say on pay is non-binding, the optics of losing a vote look bad, and companies often take action as a result.
In addition to the fatalities in 2023, Barrick reported five worker deaths in 2022, two in 2021 and one in 2020. This year, two more workers died at its mines.
Toronto-based Barrick is the world’s second-biggest gold company by market value.
The fatalities at Barrick have occurred at both its North American operations and in overseas locations, and the cause of deaths have varied widely. Last year, an electrician was killed at its Loulo-Gounkoto mine in Mali after the worker opened up a live electrical box after walking in water to fix a pump. In Nevada, a contractor died after losing control of a vehicle driving down a steep road.
“Our safety performance in 2023 did not meet our high standards” the company wrote in its information circular to investors in March.
While Barrick chastised itself about the fatalities, it gave itself a grade of 71 per cent in safety, based on its lost time injury frequency rate (LTIFR), a metric that tracks people who can’t work owing to injury on the job. Barrick said it recorded 9 per cent fewer injuries in 2023, compared with 2022, and said that its LIFTR was at an all-time low.
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Chief executive officer Mark Bristow earned US$12.7-million last year, including a bonus of US$4.1-million. Safety initiatives accounted for 5 per cent of Mr. Bristow’s target bonus, and last year he was paid 71 per cent of the target, or US$191,700, according to the proxy circular.
Barrick’s safety record is significantly worse than its biggest competitor, Newmont Gold Corp. NGT-T, and its safety record has worsened since Mr. Bristow joined as CEO in 2019.
Barrick did not respond to a request for comment.
Institutional Shareholder Services Inc., another proxy advisory firm, did not raise any major concerns with Barrick’s pay practices. It advised voting in favour of the say-on-pay resolution, and also recommended shareholders vote for all of its directors.
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In a conference call with analysts last year, when asked to explain the company’s safety record, Mr. Bristow signalled that some Barrick workers may not be adequately qualified to be working underground, and that some may be overlooking standard operating procedures and controls.
In Africa, he said the company is working to make sure its technicians, including its electricians, have up-to-date training. He said more training is needed so Barrick staff are able to handle the considerable challenges of working in a heavy industrial environment. He added that Barrick had set up “training mines” in Nevada and that the company has also partnered with training institutions in the state.
Lapses in workplace safety led to the exit of the CEO of a major natural resources producer two years ago. In 2022, U.S. activist hedge fund Elliot Investment Management Inc. launched a campaign to highlight a string of worker deaths and injuries at Suncor Energy Inc. SU-T that it tied to problems with the Calgary-based company’s safety culture. Eleven workers had been killed in eight years, a record far worse than any of its oil-sands-industry peers. Then CEO Mark Little had vowed to improve the company’s safety record and pointed out the company had bolstered its efforts to protect employees. However, in June of that year, another worker died at a Suncor facility, and two others suffered injuries, prompting Mr. Little to tender his resignation.
Barrick’s annual meeting takes place on April 30.
With reports from Jeffrey Jones and David Milstead
Niall McGee