Shareholders of Barrick Gold Corp. gave an overwhelming thumbs down to the company's compensation plan at the gold miner's annual meeting this week.
The company's report of voting results shows investors voted 85.2 per cent against the compensation plan and just 14.8 per cent in favour during the company's annual say-on-pay vote, providing a clear picture of the depth of dissatisfaction with Barrick's pay practices.
Canada has never seen a company get such low support on a say-on-pay vote, which is a non-binding advisory vote offered on a voluntary basis by many large companies. The only Canadian firm to previously lose such a vote was pharmaceutical company QLT Inc., which got just 42-per-cent support last year.
Barrick announced Wednesday at its meeting that the say-on-pay vote had been defeated, but only disclosed the detailed voting results in a later regulatory filing.
The filing also showed a significant protest vote against directors on Barrick's compensation committee, although none failed to get at least 50-per-cent support. Less than that would have triggered the company's "majority voting" rules and required directors to tender their resignations.
The three members of Barrick's compensation committee each got 72-73 per cent support of shareholders, compared to more than 90 per cent last year. Barrick chairman Peter Munk garnered 82.5-per-cent support, while vice-chairman William Birchall got 77 per cent, special advisor Brian Mulroney 76 per cent, and the firms' new co-chairman, John Thornton, 84 per cent.
The results come on the heels of a public protest by eight major investment management firms, which issued a press release April 19 saying they would vote against Barrick's pay practices to protest an $11.9-million (U.S.) signing bonus paid last year to Mr. Thornton when he was named co-chairman. His total pay for 2012 was $17-million, which the investment group said was "unprecedented" and unwarranted in a year when Barrick was struggling financially.
Compensation consultant Paul Gryglewicz, managing partner at Global Governance Advisors, said he would advise any company with such a low say-on-pay vote to engage with shareholders to hear their views and even consider making board changes. "But in Barrick's case, it's unique since the founder is so influential," he added.
The vote is not binding and does not require Barrick to roll back Mr. Thornton's pay. The company has said it will review the vote "carefully" but it has not suggested it will make specific reforms to its practices.
A Barrick spokesman said Thursday the company had no further comment on the vote.
Mr. Munk told investors Wednesday that he firmly agrees with the principles of pay for performance, but Barrick needed to make an exception to lure a director of Mr. Thornton's calibre to join the board.
He said investors should not hold the board responsible because it was his idea to make the extraordinary payment.
"I was the one who convinced them. I had to sell them against all kinds of opposition," Mr. Munk said. "So please, if you give anybody hell, I'm here. Don't blame my board."