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Barrick Gold Corp. plans to overhaul its board of directors in the wake of a backlash from powerful shareholders. Two of Barrick’s independent directors, Donald Carty and Robert Franklin, recently met or telephoned officials from eight major Canadian pension funds that spearheaded a revolt by shareholders complaining about lavish compensation practices.
More than 85 per cent of Barrick’s shareholders signalled in a non-binding vote in April that they opposed a $17-million (U.S.) paycheque for the company’s new vice-chairman John Thornton and multimillion-dollar payments to company founder Peter Munk and director Brian Mulroney.
According to people familiar with the meetings, Mr. Carty, a Dallas-based director with Virgin America and Porter Airlines Inc. described the vote as “a huge wake-up call” about the need for better governance at Barrick.
The directors told the pension funds the board has launched a search for independent directors with an emphasis on executives with mining operating experience. It is expected that some of Barrick’s current directors will be replaced but the number of departures is unclear.
Barrick spokesman Andrew Lloyd confirmed that directors reached out to institutional investors “to better understand their concerns.” He declined to discuss whether boardroom changes are expected.
Increased shareholder criticism is putting an uncomfortable light on the role of company founder Peter Munk, who still exercises enormous influence over boardroom decisions despite the fact he currently holds only a small interest in the company. Mr. Munk, 85, told shareholders at the company’s annual meeting in April that it was his proposal to pay Mr. Thornton, a former Goldman Sachs executive, a $12-million signing bonus to join Barrick last year.
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