Share Performance and Executive Compensation
Change in Named Executive Officer Total Compensation(1)
versus Barrick Cumulative Value(2) of Cdn $100 and US $100 Investment December 31, 2014 to December 31, 2019
- Total compensation represents the total reported value of salary, API, grant date fair value of equity-based LTI awards, pension value, and all other compensation from the Summary Compensation Table for the NEOs in such role as at December 31 each year. To provide a consistent basis of comparison over the five-year period, the figures for all years include total compensation for only the top five NEOs who were active in their roles as of December 31 each year. The compensation for interim NEOs and departed NEOs has been excluded; however, this information is disclosed in the information circular for the relevant year. Total 2018 compensation for all NEOs in 2019 was included to enable year-over-year comparability. For 2019, the total compensation for all NEOs were included and this information is disclosed in the “Summary Compensation Table” of the Circular.
- Dividends paid on Barrick Shares are assumed to be reinvested at the closing share price on the dividend payment date.
Five-Year Total Shareholder Return on Cdn $100 and US $100 Investment
Five-Year Change in NEO Total Compensation
|NEO Total Compensation
(Indexed to 2014 Compensation)
|NEO Total Compensation
Each year, the Compensation Committee reviews NEO total compensation in the context of their individual and collective contributions to Barrick’s financial and operational performance. The Committee also reviews NEO total compensation in the context of the overall shareholder experience, which includes an assessment of progress against the achievement of long-term strategic alternatives, using various metrics including TSR performance. Due to the long-term nature of the mining industry and the volatility of the gold price, the Committee takes a balanced view when assessing performance. Short-term performance delivered, including demonstrable actions taken to address critical issues facing the business, is considered alongside Barrick’s emphasis on sustainable profitability and long-term value creation.
We completed our transformational Merger on January 1, 2019 with a vision to become the world’s most valued gold mining business, by finding, developing, and owning the best assets, with the best people, to deliver sustainable returns for our owners and partners.
Driven by a proven management team committed to value creation, Barrick delivered on a year of solid execution against the commitments we outlined when the Merger was announced. We started 2019 with five Tier One Gold Assets and following the historic formation of Nevada Gold Mines, we now have six Tier One Gold Assets with the potential for two more as we advance organic growth opportunities across our portfolio. Our pursuit of owning only the best assets culminated in the sale of our 50% share in Kalgoorlie Consolidated Gold Mines as well as our interest in Massawa, highlighting the value creation role we continue to play from a consolidation of assets in the sector and our support of West African mining. This pursuit also led to the formation of Nevada Gold Mines, where we serve as the operator and champion in executing the significant synergies available for all stakeholders following decades of separate operations at Barrick and Newmont Corporation. The unequalled mineral endowment across our extensive land positions in Nevada Gold Mines provides a strong value foundation at Barrick in one of the world’s most prolific gold districts for decades to come.
In 2019, the integrated Barrick and Randgold management team refocused our global business to three geographical regions and rationalized our corporate office in Toronto. Together with an empowered regional structure and a dedicated mineral resource management team located at each operation, Barrick achieved 2019 gold production towards the top-end of guidance with copper production exceeding the top-end of its guidance. Our emphasis on cost reduction and decentralized operations led to supply chain savings, as well as a significant decrease in general and administrative expense despite the increase in the Barrick asset base following the Randgold merger. Discovery is fundamental to value creation and at Fourmile, we announced a new high-grade discovery that extended the strike length of the mineralized trend, while delineating further brownfields expansion potential across the portfolio, including at Carlin, Kibali, Loulo-Gounkoto, Hemlo, Veladero and Porgera. Core to our business is our clear track record in engaging with our host countries to earn our license to operate and deliver on our commitment to responsible mining, as well as ensuring regular transparent ESG reporting. After a long impasse, we finalized an agreement to settle all legacy disputes with the Government of Tanzania and introduced a new era of productive partnership for our local operations to be managed by Twiga Minerals Corporation.
Our 10-year production outlook supports the sustainable profitability of our operations. Reflecting our commitment to shareholder returns, we increased our annual dividend per share by 25%, from 16 cents in respect of 2018 to 20 cents in respect of 2019. Our debt repayments over the past six-and-a-half years total over $10 billion, including approximately $200 million in 2019. With more than 90% of the Company’s outstanding debt due after 2032, Barrick continues to have one of the strongest balance sheets in the industry. Our liquidity position is strong and continues to improve, with robust cash flow generation, modest near-term debt repayment obligations, a $3 billion un-drawn credit facility and a consolidated cash balance of approximately $3.3 billion as at December 31, 2019.
From 2014 to 2019, market gold prices increased from an average of $1,266 per ounce to an average of $1,393 per ounce, which is reflected in the increase of our share price on the TSX and NYSE over the same period. Since the announcement of our nil-premium Merger on September 24, 2018, our share price on the NYSE increased 78% up until the end of December 31, 2019. By comparison over the same period the share price of the Senior Gold Peers increased by an average of 56%, while the spot gold price increased by 26%.
Balancing the considerations above, the Compensation Committee awarded total compensation of $39.44 million for the 2019 NEOs. This reflects an increase of 39% from 2014 (compared to our five-year cumulative TSR of 102% and 82% on the TSX and NYSE, respectively), 4.4% of Barrick’s adjusted net earnings(1) of $902 million, and 0.2% of Barrick’s common shareholder equity of $21,432 million as at December 31, 2019.
- Adjusted net earnings is a non-GAAP financial performance measure with no standardized definition under IFRS and therefore may not be comparable to similar measures presented by other companies. For further details, see “Other Information – Use of Non-GAAP Financial Performance Measures”.