Report on Director Compensation and Equity Ownership
Overall Objectives of the Director Compensation Program
As a voice of all owners, and as owners themselves, our directors are compensated for their oversight, accountability, and stewardship of the Company.
The following sections provide an overview of our director compensation program, including how compensation is delivered to our non-executive director nominees and their share ownership requirements. The term “non-executive directors” in this Circular refers to those directors who are not officers or employees of the Company.
Director Compensation Structure
The Compensation Committee oversees director compensation and periodically reviews the appropriateness of the compensation arrangements for our non-executive directors to ensure competitiveness.
In the first quarter of 2019, following the completion of the Merger, the Compensation Committee reviewed the director compensation structure with advice from its independent compensation consultant, Willis Towers Watson. The objectives of the review included (1) ensuring that the compensation levels support the attraction and retention of highly qualified and diverse board members, and (2) ensuring that the compensation levels are commensurate with the increased demands on the non-executive directors following the reconstitution and streamlining of the committees of the Board. As part of this review, Willis Towers Watson provided benchmarking data from Barrick’s Global Peer Group and data from other international mining and general industry companies, with a particular focus on those in Canada and the U.S. Following this review, on May 7, 2019, the Compensation Committee recommended and the Board approved the following new director compensation arrangements, which are applicable to all non-executive directors who were on the Board when the change was approved, effective as of January 1, 2019. Directors who are officers of the Company do not receive any compensation for their services as directors.
| Type of Fee | Amount |
|---|---|
| Annual Retainer Retainers are paid in four installments following the end of each quarter of service as a Board member. Directors are required to receive at least $175,000 (approximately 63.6%) of their annual director retainer in the form of DSUs. All directors have the option to elect to receive up to 100% of their annual retainer in DSUs or in cash to purchase Barrick Shares that cannot be sold, transferred, or otherwise disposed of until the director leaves the Board. |
$275,000 |
| Committee and Other Fees Directors receive additional committee fees that are paid quarterly in cash. |
|
| Audit & Risk Committee Chairperson Member |
$40,000 $20,000 |
| Compensation Committee Chairperson Member |
$40,000 $20,000 |
| Corporate Governance & Nominating Committee Chairperson Member |
$25,000 $15,000 |
| Lead Director | $50,000 |
| Meeting Fees | N/A |
No Other Compensation
Non-executive directors do not receive any cash incentive compensation or pension benefits. Since 2004, DSUs have been the only form of equity awards granted to non-executive directors.
Director Equity Awards
Deferred Share Unit Plan
Each DSU is a share unit that is equal in value to a Barrick Share and is fully vested upon grant, but is not paid out until the director leaves the Board. Following a director’s departure from the Board, the director may elect, at any time up to the end of the calendar year, to have his or her DSUs redeemed for cash based on the value of Barrick Shares on a redemption date subsequent to his or her notice of resignation from the Board.
Director Stock Options
Non-executive directors of the Company have not received options since 2003. The Stock Option Plan (2004) (the 2004 Plan) specifically excludes non-executive directors from receiving options under the 2004 Plan. No current director of the Company owns any options.
Director Share Ownership Requirements
In order to drive emotional and financial ownership among our directors, Barrick requires directors to own Barrick Shares and/or DSUs having a minimum value established by the Board. Barrick Shares held in trust are counted towards the fulfillment of the minimum share ownership requirement. The minimum share ownership requirements are as follows:
- Executive Chairman: The Executive Chairman is required to hold Barrick Shares and/or DSUs worth a total value of at least four times his annual pre-tax salary and has three years from the date of his appointment to fulfill the share ownership requirement.
- Non-executive directors: Each non-executive director is required to hold at least three times his or her annual Board retainer worth of Barrick Shares and/or DSUs and has five years from the date of his or her initial election or appointment to fulfill the share ownership requirement.
The minimum share ownership requirement for non-executive directors is evaluated annually on December 31 and is subject to a grace period whereby if the market value of a director’s equity interest in the Company falls below the minimum share ownership requirement due to a significant decrease in the price of Barrick Shares, such director will have two years from the end of the fiscal quarter in which the value first fell below the minimum requirement to once again meet the requirement. As at December 31, 2019, all directors except Ms. Silva (who was appointed to the Board in August 2019) have met their share ownership requirements. Ms. Silva has until August 9, 2024 to meet her share ownership requirement.
The following table provides details of the share ownership of our director nominees, other than Messrs. Bristow and Thornton, whose share ownership requirements are disclosed under “2019 Compensation of Named Executive Officers – Managing Compensation Risks – NEO Share Ownership Requirements”.
Share Ownership of Director Nominees
| Name (a) |
Date (b) |
Value of Barrick Shares (# of Barrick Shares) (c) |
Value of DSUs (# of DSUs) (d) |
Total Value of Barrick Shares and DSUs(1) (# of Barrick Shares and DSUs) (e) |
Value as Multiple of Retainer as at December 31, 2019 (f) |
Share Ownership Requirement Met as at December 31, 2019 (  )(g) |
|---|---|---|---|---|---|---|
| Gustavo A. Cisneros | December 31, 2019 | $204,490 (11,000) |
$2,781,101 (149,602) |
$2,985,591 (160,602) |
10.9x | |
| March 2, 2020 | $218,460 (11,000) |
$2,971,096 (149,602) |
$3,189,556 (160,602) |
|||
| Christopher L. Coleman | December 31, 2019 | $2,255,599 (121,334) |
$309,412 (16,644) |
$2,565,011 (137,978) |
9.3x | |
| March 2, 2020 | $2,409,693 (121,334) |
$330,550 (16,644) |
$2,740,243 (137,978) |
|||
| J. Michael Evans | December 31, 2019 | Nil (Nil) |
$1,671,092 (89,892) |
$1,671,092 (89,892) |
6.1x | |
| March 2, 2020 | Nil (Nil) |
$1,785,255 (89,892) |
$1,785,255 (89,892) |
|||
| Brian L. Greenspun | December 31, 2019 | $579,729 (31,185) |
$1,253,319 (67,419) |
$1,833,048 (98,604) |
6.7x | |
| March 2, 2020 | $619,334 (31,185) |
$1,338,941 (67,419) |
$1,958,275 (98,604) |
|||
| J. Brett Harvey | December 31, 2019 | $542,363 (29,175) |
$2,253,982 (121,247) |
$2,796,345 (150,422) |
10.2x | |
| March 2, 2020 | $579,416 (29,175) |
$2,407,965 (121,247) |
$2,987,381 (150,422) |
|||
| Andrew J. Quinn | December 31, 2019 | $1,347,422 (72,481) |
$309,412 (16,644) |
$1,656,834 (89,125) |
6.0x | |
| March 2, 2020 | $1,439,473 (72,481) |
$330,550 (16,644) |
$1,770,023 (89,125) |
|||
| Loreto Silva | December 31, 2019 | Nil (Nil) |
$70,140 (3,773) |
$70,140 (3,773) |
0.3x | N/A |
| March 2, 2020 | Nil (Nil) |
$74,932 (3,773) |
$74,932 (3,773) |
- The values of Barrick Shares and DSUs are based on the closing price of Barrick Shares on the NYSE at December 31, 2019 ($18.59), the last trading day in 2019, and March 2, 2020 ($19.86).
Director Compensation Summary for 2019
The following table provides details of the compensation for Barrick’s directors during 2019, other than Messrs. Bristow and Thornton, whose compensation is disclosed in “2019 Compensation of Named Executive Officers – Summary Compensation Table” and who received no additional compensation as a result of their service as directors of Barrick.
Director Compensation Table for the Year Ended December 31, 2019(1)
| Name (a) |
2019 Committee Memberships (b) |
Fees Earned(2) (c) |
Share-Based Awards(2) (d) |
Option-Based Awards (e) |
All Other Compensation (f) |
Total Compensation (g) |
|---|---|---|---|---|---|---|
| María Ignacia Benítez(3) | N/A | $33,269 | Nil | Nil | Nil | $33,269 |
| Gustavo A. Cisneros(4) | CG&N (Chair); Compensation | $45,000 | $275,000 | Nil | Nil | $320,000 |
| Christopher L. Coleman(5) | Compensation (Chair);CG&N | $55,000 | $275,000 | Nil | Nil | $330,000 |
| J. Michael Evans(6) | Audit & Risk | $20,000 | $275,000 | Nil | Nil | $295,000 |
| Brian L. Greenspun(7) | CG&N; Compensation | $103,750 | $206,250 | Nil | Nil | $310,000 |
| J. Brett Harvey(8) | Audit & Risk (Chair); Compensation | $110,000 | $275,000 | Nil | Nil | $385,000 |
| Andrew J. Quinn(9) | Audit & Risk | $20,000 | $275,000 | Nil | Nil | $295,000 |
| Loreto Silva(10) | N/A | $39,402 | $68,954 | Nil | Nil | $108,356 |
- Compensation for non-executive directors is paid in U.S. dollars.
- Figures shown in the Fees Earned column reflect the portion of the annual retainer paid in the form of cash, as well as additional retainers paid to certain directors in cash, as described in “Director Compensation Structure”. Figures in the Share-Based Awards column reflect the portion of the annual retainer paid in the form of DSUs. Messrs. Cisneros, Coleman, Evans, Harvey, and Quinn elected to receive 100% of the director retainer in DSUs. Ms. Benítez and Mr. Greenspun elected to receive 75% of the director retainer in DSUs. Ms. Silva elected to receive the mandated portion of the director retainer in DSUs, equivalent to approximately 64%. See “Incentive Plan Awards – Value Vested or Earned During the Year Ended December 31, 2019” table for the total value realized upon vesting of the DSUs awarded to directors for their services as directors for 2019.
- Ms. Benítez joined the Board on April 24, 2018. Ms. Benítez passed away on February 28, 2019, prior to the approval of the changes to the director compensation structure that were approved on May 7, 2019. She received a prorated director’s retainer of $32,778 as a member of the Board from January 1, 2019 to February 28, 2019 and a prorated fee of $491 for her membership on the Audit & Risk Committee over the same period, commensurate with the terms of the legacy director compensation structure.
- Mr. Cisneros received a fee of $25,000 for his role as the Chair of the Corporate Governance & Nominating Committee and $20,000 for his membership on the Compensation Committee.
- Mr. Coleman received a fee of $40,000 for his role as the Chair of the Compensation Committee and $15,000 for his membership on the Corporate Governance & Nominating Committee.
- Mr. Evans received a fee of $20,000 for his membership on the Audit & Risk Committee.
- Mr. Greenspun received a fee of $15,000 for his membership on the Corporate Governance & Nominating Committee and $20,000 for his membership on the Compensation Committee.
- Mr. Harvey received a fee of $40,000 for his role as Chair of the Audit & Risk Committee, a fee of $20,000 for his membership on the Compensation Committee, and a fee of $50,000 for his role as the Lead Director.
- Mr. Quinn received a fee of $20,000 for his membership on the Audit & Risk Committee.
- Ms. Silva joined the Board on August 9, 2019 and she received a prorated director’s retainer of $108,356 as a member of the Board from August 9, 2019 to December 31, 2019. Ms. Silva became a member of the Corporate Governance & Nominating Committee on February 11, 2020.
Aggregate Option Exercises During Financial Year Ended December 31, 2019
None of our directors have outstanding stock options.
Outstanding Share-Based Awards and Option-Based Awards as at Year Ended December 31, 2019
The following table provides information for all unvested share-based awards and all option awards outstanding as at December 31, 2019 for directors other than Messrs. Bristow and Thornton, whose awards are disclosed in “2019 Compensation of Named Executive Officers – Incentive Plan Award Tables – Outstanding Share-Based Awards and Option-Based Awards as at Year Ended December 31, 2019”.
| Option Awards | Share-Based Awards(1) | |||||||
|---|---|---|---|---|---|---|---|---|
| Name (a) |
Number of Securities Underlying Unexercised Options (#) (b) |
Option Exercise Price ($) (c) |
Option Expiration Date (d) |
Value of Unexercised In-the-Money Options or Similar Instruments (e) |
Number of Shares or Units That Have Not Vested (f) |
Market or Payout Value of Share-Based Awards That Have Not Vested (g) |
Market or Payout Value of Vested Share-Based Awards Not Paid Out or Distributed(2) (h) |
|
| María Ignacia Benítez(3) | Nil | Nil | Nil | |||||
| Gustavo A. Cisneros | Nil | Nil | $2,781,101 | |||||
| Christopher L. Coleman | Nil | Nil | $309,412 | |||||
| J. Michael Evans | Nil | Nil | $1,671,092 | |||||
| Brian L. Greenspun | Nil | Nil | $1,253,319 | |||||
| J. Brett Harvey | Nil | Nil | $2,253,982 | |||||
| Andrew J. Quinn | Nil | Nil | $309,412 | |||||
| Loreto Silva | Nil | Nil | $70,140 | |||||
- Non-executive directors are awarded DSUs which vest immediately upon grant but must be retained until the director leaves the Board, at which time the cash value of the DSUs will be paid out. See the “Incentive Plan Awards – Value Vested or Earned During the Year Ended December 31, 2019” table below for information on the DSUs awarded to directors in 2019.
- The amounts shown in column (h) are the value of the total number of DSUs held by each director as at December 31, 2019, multiplied by the closing price of Barrick Shares on the NYSE on December 31, 2019 ($18.59).
- Ms. Benítez’s DSUs were redeemed for cash on December 20, 2019.
Incentive Plan Awards – Value Vested or Earned During the Year Ended December 31, 2019
The following table provides information for each of the directors, other than Messrs. Bristow and Thornton, whose awards are disclosed in “2019 Compensation of Named Executive Officers – Incentive Plan Award Tables – Incentive Plan Awards –Value Vested or Earned During the Year Ended December 31, 2019” on the value that would have been realized upon vesting of share-based awards during the year ended December 31, 2019.
| Name (a) |
Option-Based Awards – Value Vested During the Year(1) (b) |
Share-Based Awards – Value Vested During the Year(2) (c) |
Non-Equity Incentive Plan Compensation – Value Earned During the Year (d) |
|---|---|---|---|
| María Ignacia Benítez(3) | Nil | $1,485 | Nil |
| Gustavo A. Cisneros(4) | Nil | $302,267 | Nil |
| Christopher L. Coleman(5) | Nil | $276,148 | Nil |
| J. Michael Evans(6) | Nil | $290,422 | Nil |
| Brian L. Greenspun(7) | Nil | $217,816 | Nil |
| J. Brett Harvey(8) | Nil | $296,642 | Nil |
| Andrew J. Quinn(9) | Nil | $276,148 | Nil |
| Loreto Silva(10) | Nil | $69,024 | Nil |
- No directors had outstanding options as at December 31, 2019.
- The figures shown represent all DSUs awarded that vested in 2019. In 2019, Messrs. Cisneros, Coleman, Evans, Harvey, and Quinn elected to receive 100% of the director retainer in DSUs. Ms. Benítez and Mr. Greenspun elected to receive 75% of the director retainer in DSUs. Ms. Silva elected to receive the mandated portion of the director retainer in DSUs, equivalent to approximately 64%. Because DSUs vest immediately upon issuance, the value of DSUs that vested in 2019 is determined by multiplying the number of DSUs issued to each director in the year by the closing price of Barrick Shares on the NYSE on the applicable date of issuance.
- Ms. Benítez’s share-based awards include 99 DSU dividend equivalents.
- Mr. Cisneros’ share-based awards include 16,576 DSUs and 1,849 DSU dividend equivalents.
- Mr. Coleman’s share-based awards include 16,576 DSUs and 68 DSU dividend equivalents.
- Mr. Evans’ share-based awards include 16,576 DSUs and 1,040 DSU dividend equivalents.
- Mr. Greenspun’s share-based awards include 12,433 DSUs and 779 DSU dividend equivalents.
- Mr. Harvey’s share-based awards include 16,576 DSUs and 1,465 DSU dividend equivalents.
- Mr. Quinn’s share-based awards include 16,576 DSUs and 68 DSU dividend equivalents.
- Ms. Silva’s share-based awards include 3,769 DSUs and 4 DSU dividend equivalents.