Barrick Gold Corp. chairman John Thornton vowed to change how he is compensated after shareholders voted against the company's pay practices.
The Tuesday vote is a blow to the world's biggest gold producer, which had already revamped its executive compensation plan in the wake of Mr. Thornton's controversial signing bonus two years ago.
"We have heard you loud and clear," Mr. Thornton said at Barrick's annual meeting of shareholders. "We will go back and refine our system, particularly as it relates to me."
Mr. Thornton said preliminary results showed that 75 per cent of the votes cast were against Barrick's compensation practices, marking the second time in three years that investors have rejected its pay plans.
Canadian pension funds and others had criticized Mr. Thornton's 36-per-cent pay hike for 2014 as unwarranted in a year when Barrick underperformed. Shareholders also said they would withhold support for the directors involved with setting the pay or the entire board.
The four members of Barrick's compensation committee received the lowest level of support from shareholders with group chairman Brett Harvey winning only 74.1 per cent of votes cast.
Ahead of the vote, Mr. Harvey, reached out to shareholders to hear their concerns. But some said they were unsure anything would change.
The so-called "say on pay" motion is non binding. It is unclear how directors will tweak the current pay practices. The company scores executives on a set of goals, such as balance sheet strength. But Mr. Thornton's compensation is more subjective and determined by the compensation committee – a point that one proxy adviser likened to a "black box."
Mr. Thornton told shareholders that he was not evaluated like his managers in order to preserve his independence. "This allows me, on behalf of the board, to monitor management's performance free of any conflicts of interest," he said.
Other companies are in the spotlight over pay practices. Last week, Canadian Imperial Bank of Commerce shareholders rejected its remuneration plans after the bank awarded two retired executives a total of $25-million.
Of the $12.9-million (U.S.) in compensation that Mr. Thornton received for last year, $7-million was used to buy Barrick stock. Mr. Thornton said he now holds 1.4-million shares in Barrick. He has repeatedly stressed the importance of executives owning a stake in the company.
"I am aligned with you. I am one of you. I am you," he told shareholders.
Mr. Thornton, a former Goldman Sachs executive, has replaced most of the executives since succeeding Barrick founder Peter Munk as chairman one year ago.
He recently unveiled his strategy to focus on gold and reduce Barrick's $13-billion debt by $3-billion this year. A three-year slump in bullion prices has caused Barrick and other miners to postpone projects and slash costs.
To generate cash, Barrick has put its some of its mines up for sale. On Monday, the miner announced that it would sell part of its top-performing Chilean copper mine, a retreat from a metal that Mr. Munk and Mr. Thornton had once said they were interested in diversifying into.
Mr. Thornton started his first address to shareholders by paying tributes to the 87-year old Mr. Munk, who sat in the front row next to his old board.
At the meeting in Toronto, shareholder questions ranged from how much time Mr. Thornton spent in Toronto and about his decision to eliminate the CEO position and replace it with two co-presidents. Barrick shares are trading around levels seen 20 years ago, but are up 24 per cent this year.
This story corrects an early version that incorrectly identified John Thornton as the CEO of Barrick