In an article published in this newspaper on Sept. 18, 2013, David Parkinson was unfairly critical of me and the governance practices at Barrick Gold Corp. Mr. Parkinson went so far as to suggest that I was treating Barrick as if it were my "personal piggy bank." You have extended to me the opportunity to rebut his criticisms, for which I am thankful.
I founded Barrick more than 30 years ago. In the period since, Barrick has become one of the most successful companies in Canada, and one of the world's largest and most profitable gold mining companies. Barrick now has operations on five continents and more than 25,000 employees. In the most recent fiscal year, Barrick had record revenues of more than $14.5-billion. In the last three years alone, despite some major non-cash write-offs, Barrick had operating cash flows of more than $16-billion; and EBITDA (earnings before interest, taxes, depreciation and amortization) of more than $23-billion. Measured by these key metrics, this ranks Barrick as one of the top performing companies on the Toronto Stock Exchange over the period.
Contrary to Mr. Parkinson's assertions, the board of directors of Barrick takes its governance obligations very seriously. Moreover, the compensation arrangements referred to in his article were approved both by Barrick's compensation committee, comprised entirely of independent directors; and subsequently and unanimously by the independent directors of the board as a whole.
I have always placed a great deal of importance on my relationships with Barrick's many shareholders, and was gratified that some 83 per cent of all the shareholder votes cast at Barrick's most recent annual meeting were in favour of my re-election as a director. John Thornton, Barrick's co-chairman, received a similar level of support.
Since our 2012 annual meeting, I and other directors of Barrick have engaged in many discussions with Barrick's institutional shareholders to understand their perspectives on Barrick's compensation practices and governance arrangements. As previously stated, we are addressing the issues that have been raised with us, including the modification of our executive compensation arrangements and the rejuvenation of our Board. We expect to be in a position shortly to update our shareholders on those initiatives.
It is a shame that Mr. Parkinson made no effort to discuss these matters with me before his unfortunate, damaging and unfair article was published.
To the editor:
Re Peter Munk should go before the last investor does (Sept. 17):
I would like to set the record straight on Peter Munk's increase in pay in 2012. As an independent member of Barrick's board of directors who chairs the compensation committee, I can state unequivocally that Peter had no influence on the decision to increase his salary, as a recent column in your newspaper inferred.
In making this decision, the compensation committee reviewed the market, Peter's contribution to Barrick and the tremendous success of the company over the three prior years. Peter was not a party to the analysis or decision making as it relates to him. I would also note that, for five years leading up to 2011, Peter did not receive a salary increase despite the fact that Barrick reported successively higher earnings each year.
– J. Brett Harvey