Most productive CEO? Fired Barrick exec generated most profit for pay among peers – by Bloomberg (Toronto Star – June 15, 2012)

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Aaron Regent, who was fired last week as chief executive officer of Barrick Gold Corp. after failing to boost the stock price, generated more profit for every dollar of pay last year than any of his peers in Canada and the U.S.
 
Barrick, the world’s largest gold miner, earned $514.98 for every dollar the Toronto-based company paid Regent for 2011, according to data compiled by Bloomberg. That was more than the CEOs of the six other largest North American gold companies. Goldcorp Inc., the second-largest producer by market value, reported $172.09 of net income for every dollar awarded CEO Chuck Jeannes. Yamana Gold Inc. CEO Peter Marrone brought in $47.88 in profit for every dollar of pay.
 
Executive compensation is coming under increasing scrutiny, with gold mining CEOs among the best-paid in Canada last year, even as their companies’ shares failed to match gains in gold prices.
 
“I would like to see the compensation more directly tied to the stock prices,” Pawel Rajszel, a Toronto-based analyst at Veritas Investment Research, said in an interview. “Then you’ll see these producers be more disciplined in terms of capital allocation.”
 
Stock Disappointed
 
Peter Munk, Barrick founder and Chairman, replaced Regent on June 6 with former chief financial officer Jamie Sokalsky because the company was “disappointed” by the share performance after a 15 per cent decline in 2011. Gold miners including Barrick and Newmont Mining Corp., the two biggest by sales, have tried to reverse declining share prices even as gold increased 32 per cent in the past 24 months.
 
Barrick shares fell 5.7 per cent through yesterday in Toronto since Regent began as CEO on Jan. 16, 2009. That was better than the 50 per cent drop in the 16-member Philadelphia Gold & Silver Index of precious metals producers. Over the same period gold futures in New York doubled.
 
Regent earned $8.71 million last year, excluding pension costs and including all other types of compensation. That was down 0.2 per cent from a year earlier. Goldcorp’s Jeannes earned $10.93 million in 2011 and Yamana CEO Marrone was the highest- paid gold CEO, receiving $11.45 million in compensation.
 
Jeannes and Marrone both earned more than the heads of Canada’s two largest banks by assets, Royal Bank of Canada and Toronto-Dominion Bank. Gordon Nixon, CEO of Royal, was awarded total compensation of C$10.1 million ($9.82 million) and Edmund Clark, TD CEO, earned C$11.4 million.
 
Better Educated
 
Regent generated more earnings for every dollar paid in 2011 than Nixon, who brought in C$480.40, and less than Clark who earned TD C$517.45 for every dollar paid. The calculations are based on net income and compensation figures in proxy circulars.
 
“CEO or executive pay in the Canadian gold sector has been one of the highest in Canada for the last several years,” said Steve Chan, principal at Hugessen Consulting Inc. in Toronto, which advises boards on compensation. “I think that’s in large part helped along by the strong run up in the price of gold and subsequently the demand for talent in that space.”
 
Investors are becoming less supportive. This year, 95.6 per cent of Barrick’s shareholders at its annual meeting voted to back the company’s executive compensation policy in a non- binding resolution, compared with 97.2 per cent last year. Investors in Kinross Gold Corp., Canada’s third-largest producer by sales, voted 78.5 per cent in favour at the 2012 meeting, down from 95.7 per cent a year ago.
 
“Shareholders are asking more questions, better questions and becoming generally more educated around compensation,” Luis Navas, vice-chairman of Global Governance Advisors, which advises companies on compensation, said in an interview.
 
For the rest of this article, please go to the Toronto Star website: http://www.thestar.com/business/article/1211208–most-productive-ceo-fired-barrick-exec-generated-most-profit-for-pay-among-peers