* Funds decry $11.9 mln signing bonus for Barrick
* Group opposes re-election of compensation committee
* Group controls roughly 3.5 pct of Barrick's shares
* Barrick annual general meeting set for April 24
* Barrick shares close 1.1 pct higher on NYSE, TSX
(Adds comment from ISS, Glass Lewis, background,)
By Euan Rocha and Julie Gordon and Allison Martell
TORONTO, April 19 Barrick Gold Corp,
already under pressure from setbacks at its largest development
project and a slump in the price of gold, now faces a
shareholder revolt over a "troubling" payment to a member of its
A group of Canada's top pension funds, small but significant
shareholders in the world's largest gold miner, said on Friday
it opposes Barrick's $11.9 million signing bonus for co-chairman
John Thornton, the man tipped as the miner's next chairman.
"This compensation is inconsistent with the governance
principle of pay-for-performance and is therefore
disproportionate and sets a troubling precedent in Canadian
capital markets," the group said in a statement.
Barrick has faced a raft of problems in recent months,
including a slumping gold price, and a partial halt to work at
one of its main growth projects, Pascua-Lama, on the border of
Argentina and Chile.
Shares of the company have fallen more than 37 percent this
month and have more than halved in value over the last year.
The stock rose 1.1 percent on Friday, after the group of
funds said it would vote against Barrick's advisory resolution
on executive compensation and against the election of the
members of the compensation committee at Barrick's annual
meeting in Toronto, on April 24.
Barrick declined comment on Friday, but in its proxy
circular to shareholders ahead of the meeting, Barrick said the
advisory resolution on executive compensation is "not binding"
on the board.
"The board and, in particular, the compensation committee
will consider the outcome of the vote as part of its ongoing
review of executive compensation," it added.
Barrick also has a majority voting policy in its corporate
governance guidelines, so a director must resign if more shares
are withheld from him or her than are voted in favor.
Thornton, widely expected to succeed founder and Chairman
Peter Munk, has been a Barrick director since February, 2012,
and is also on the boards of China Unicom (Hong Kong) Ltd
, HSBC Holdings, and Ford Motor Co.
A former president at Goldman Sachs, he has served on
the boards of News Corp and Intel Corp, among
In a letter to shareholders released in March, Munk said it
was time for Barrick to "consider a path to new leadership at
our board level." He listed the qualifications Barrick was
looking for, and singled out Thornton as his likely successor.
The pension funds are not alone in expressing concern about
payments from Barrick. Earlier this month, proxy advisory firms
Glass Lewis and Institutional Shareholder Services, advised
clients to vote against Barrick's executive compensation plan.
"At a time when shareholders have suffered underperformance,
the total compensation to the Co-Chairman Thornton appears
problematic without sufficiently justified rationale," ISS said.
Barrick reported a net loss of $665 million in 2012, due to
a large writedown. Excluding items, the company reported profits
of $3.83 billion, down from $4.67 billion, a year earlier.
Glass Lewis also said it was concerned by the number of the
number of boards that Thornton sits on.
But it stopped short of urging shareholders to withhold
their votes for Thornton.
Glass Lewis is owned by Ontario Teachers', which is one of
the funds objecting to Thornton's pay package. The advisory firm
says Teachers' is not involved in the day-to-day management of
Glass Lewis, and the proxy voting and governance policies of
Glass Lewis are separate from those of Teachers'.
The group of funds opposing the payments comprises Canada
Pension Plan Investment Board, the Ontario Teachers' Pension
Plan and Caisse de dépôt et placement du Québec, as well as
Alberta Investment Management Corp, British Columbia Investment
Management Corp, Hermes Equity Ownership Services, Ontario
Municipal Employees Retirement System, and Public Sector Pension
"The purpose is to alert people to the fact that this a
matter of principle for us," said Marie Giguère head of legal
affairs for Caisse, noting that the group believes it has
support from other investors. "We think this in objectionable
and unheard of."
The group of pension funds owns roughly 3.5 percent of
Barrick's outstanding stock, or some 34.8 million shares,
according to Thomson Reuters data and fund disclosures. That
stake was worth $640 million at Thursday's closing price of
C$18.44 in Toronto.
Brad Allen, who heads Branav Shareholder Advisory Services,
a firm that counsels boards on ways to mitigate shareholder
risk, said the group's very public statement was a way to
increase pressure on Barrick.
"Three years ago, you'd never have seen these guys putting
out press releases or anything. It would all be behind the
scenes," he said. "I think this move by the group of funds is an
attempt to quickly get word out to other shareholders ... and
see whether others want to tag on."
(Additional reporting by Andrea Hopkins; Editing by Janet
Guttsman, Dan Grebler and Tim Dobbyn)