Letter from the Lead Director
March 27, 2020
Dear Fellow Shareholders,
Your Board of Directors believes that good corporate governance is foundational to Barrick’s long-term success, and our work on your behalf is guided by three core principles: we are highly engaged; we seek feedback from and listen to our fellow owners; and we apply rigorous risk oversight across every area of the business.
Following the merger between Barrick and Randgold Resources, the Board was streamlined and we reconstituted three standing committees – the Audit & Risk Committee, the Corporate Governance & Nominating Committee, and the Compensation Committee – to enhance dialogue and promote accountability. We have also reviewed non-executive director compensation to ensure that Barrick continues to attract and retain directors of the highest caliber, and that director compensation reflects the contributions and time commitment we expect of them.
Consistent with our commitment to increasing the Board’s diversity, we have been working to add two highly qualified female candidates to our directors. The first individual, Ms. Loreto Silva, was appointed to the Board in August 2019 following a rigorous search and selection process overseen by our Corporate Governance & Nominating Committee. Ms. Silva, who is a citizen of Chile, brings significant knowledge of large-scale infrastructure projects and wide-ranging experience in legal and government affairs with a specific focus in South America. We are well-advanced in our search for the second highly qualified female candidate who is expected to be an African with the appropriate experience to bring an independent view as well as an understanding of doing business in Africa to the Board. We believe these additions, in conjunction with our current Board members’ institutional knowledge of the legacy companies, will enhance the mix of skills, perspective, experience, and expertise necessary to address the challenges, risks, and opportunities facing our business today and into the future.
Determining executive compensation is another core responsibility of the Board. We have made several changes to our executive compensation plans in 2019 with the objective of further strengthening the performance orientation of our incentive plans, rewarding and retaining top talent, and reinforcing our distinctive ownership culture.
Following Barrick’s return to a more traditional management structure with a Chief Executive Officer, we simplified the compensation framework for the Executive Chairman to ensure that it is aligned with his evolving role. Long-term incentive awards are now earned based on relative total shareholder return performance and capped at 175% of salary, which translates into a total compensation opportunity that is capped at 60% of the maximum total compensation opportunity for 2018. In 2019, the Compensation Committee recommended, and the independent directors approved, a total long-term incentive compensation award of $2.5 million for the Executive Chairman. In keeping with Barrick’s industry-leading shareholding requirements and clawback provisions, Mr. Thornton was required to use a majority of the after-tax proceeds of his long-term incentive to purchase Barrick shares, which he must hold until retirement, further building on his substantial ownership position.
In late March 2020, due to personal portfolio considerations, Mr. Thornton sold a portion of the Barrick Shares that he purchased using his personal funds which were not subject to holding restrictions. The sales were completed during the permitted open period following the release of Barrick’s 2019 year-end results. Mr. Thornton confirmed that he would continue to retain and seek to build on what remains a meaningful equity stake in Barrick and that he looks forward to participating in the value created by the many exciting long-term growth opportunities being realized by Barrick’s strong management team.
We also introduced a new global peer group comprised of 20 companies that operate in the mining and broader extractive industries to provide benchmarks against which Barrick’s performance can be measured.
Finally, we updated our cornerstone Performance Granted Share Unit Plan to accelerate share ownership through a phased vesting schedule and to provide access to awards earned, subject to the achievement of our market-leading minimum share ownership requirements to further underscore our ownership culture. Today, our Named Partners have a collective ownership position of more than 6.2 million Barrick shares.
These decisions reflect the excellent progress management has made in building a new, value-focused Barrick. As at December 31, 2019, Barrick’s share price on the New York Stock Exchange increased by 78% since the announcement of the Merger. For 2019, the Compensation Committee gave Barrick’s management leaders a collective grade of 67 out of 100, as measured against our long-term scorecard. Our Named Partners received an average score of 80 out of 100 on their personal scorecards, which are tailored to their individual responsibilities.
In line with a renewed emphasis on engagement, the Board resolved to have at least one of its meetings at an operational site each year. In 2019, we visited all the Nevada operations and met at Barrick’s North American headquarters in Henderson, Nevada as well as at the corporate office in Toronto.
My fellow directors and I remain committed to building on the progress made by Barrick in 2019 towards achieving its goal of becoming the world’s most valued gold mining company, by having the best assets, with the best people to deliver the best value to stakeholders. It is a privilege to serve as your Lead Director during this transformational period for the Company.
Lead Director on behalf of the Barrick Board of Directors