(Recasts with chairman, CEO comments from annual meeting,
investor comments on pay scheme)
By Allison Martell and Euan Rocha and Nicole Mordant
TORONTO/VANCOUVER, April 30 Outgoing Barrick
Gold Corp founder and Chairman Peter Munk gave
a spirited defense of his replacement, John Thornton, on
Wednesday days after his successor was lambasted by a rival gold
company and investors criticized his pay package.
In a farewell speech to the company he founded 31 years ago,
Munk told shareholders at Barrick's annual meeting in Toronto
that he is certain that Thornton is "the right guy" to take over
as chairman of the world's biggest gold company.
"John Thornton, in my opinion, was going to be the very best
investment in my 32 year legacy," said Munk, 86, who founded
Barrick in 1983 and built it into the world's top gold miner
with an aggressive string of acquisitions.
"That includes Goldstrike, and that wasn't exactly a bad
one," he added, referring to the Nevada mine that was one of his
earliest acquisitions and helped to build Barrick into a top
On Monday, the chairman of Newmont Mining Corp,
Vincent Calarco, slammed Thornton, saying that while the
Denver-based miner's team found recent talks with Barrick's
management constructive, the same could not be said of
discussions with Thornton.
Calarco's comments came after failed merger talks between
Barrick and Newmont, with the world's two largest gold miners
publicly accusing each other of scuppering a deal favored by
Munk did not directly discuss Calarco's comments but said he
had been "hurt and confused" a year ago by shareholder outrage
at Thornton's $11.9 million signing bonus.
Thornton, 60, a former second-in-command at Goldman Sachs
Inc and regarded as an expert on China, was hand-picked
by Munk as his successor, and named Barrick co-chair in June
Barrick has since revamped its executive pay plan, and more
than 80 percent of shareholders who voted backed the plan on
Wednesday, Chief Executive Jamie Sokalsky said. He also said all
the directors proposed by Barrick for its board had been
However, the Ontario Teachers Pension Plan, one of Canada's
largest institutional fund managers, said it had voted against
the executive pay plan as it said Barrick's compensation
committee had not been prudent in its award to Thornton.
Thornton earned $9.5 million in 2013.
British Columbia Investment Management Corp, another large
Canadian institutional investor, also voted against the
"While we recognize that many changes have been made to
compensation going forward, we continue to be concerned with
discretionary awards being made to the incoming chair," the fund
said in an email.
The Canada Pension Plan Investment Board, which manages
investments for Canada's national pension plan, also said it
planned to vote against the plan.
Earlier on Wednesday, Barrick reported a steep drop in
first-quarter earnings and cut its forecast for 2014 copper
production but the results were slightly ahead of market
expectations and the company's shares inched higher.
Barrick cut its copper production forecast to between 410
and 440 million pounds, from between 470 and 500 million pounds,
blaming damage to the main conveyor at its Lumwana mine in
Zambia. It does not expect the incident to materially affect its
A drop in metal prices and lower gold volumes hurt Barrick's
profit during the quarter through March 31, with net earnings
attributable to shareholders plummeting to $88 million, or 8
cents a share, from $847 million, or 85 cents, a year earlier.
Excluding currency losses and unusual items, adjusted
earnings fell to $238 million, or 20 cents a share, from $923
million, or 92 cents, a year earlier. Analysts surveyed by
Reuters expected it to earn 19 cents a share.
Barrick's shares were 3 Canadian cents higher at C$19.38 on
the Toronto Stock Exchange. Other gold stocks were mixed.
Barrick, which has mines in the Americas, Australia and
Africa, produced 1.6 million ounces of gold in the first
quarter, down from 1.8 million ounces a year earlier. Barrick
has sold several higher-cost mines over the past year.
(Additional reporting by Ashutosh Pandey in Bangalore; Editing
by Bernadette Baum and Andrew Hay)