CPPIB joins chorus against Barrick's executive pay structure

CEO's pay not tied to any measurable long-term performance metrics: Critics
By Euan Rocha
|hrreporter.com|Last Updated: 04/24/2015

TORONTO (Reuters) — The Canada Pension Plan Investment Board, the country's largest pension fund manager, on Friday joined a slew of other investors opposing Barrick Gold Corp's executive pay structure.

Toronto-based CPPIB said it plans to come out against the advisory vote on executive compensation that Barrick will be having at its annual shareholder meeting next week.

It also said it plans to withhold support from Brett Harvey, one of Barrick's board members and the chair of its compensation committee. CPPIB own roughly 8.1 million Barrick shares, or less than a percent of the company's outstanding stock.

Last week, two smaller Canadian pension funds, the British Columbia Investment Management Corp (BCIMC) and the Ontario Teachers' Pension Plan Board, said they plan to withhold support from Barrick's entire board in light of their concerns with Barrick's executive compensation package.

This marks the second time in three years that Barrick is facing heat over its executive pay. The company lost an advisory vote on its executive pay structure in 2013, prompting it to lay out a new compensation program last year. However, the company's recent disclosure that Executive Chairman John Thornton was paid $12.9 million in 2014 unleashed fresh complaints.

Barrick contends that with its new pay structure, its senior leaders' personal wealth is directly tied to the company's long-term success. 

But its detractors including well known proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis contend that Thornton's pay is not clearly tied to any established and measurable long-term performance metrics.

Separately, CPPIB's much smaller pension fund rival OPTrust also expressed its dismay with Barrick's pay structure, stating that it also plans to come out against the advisory vote on the pay structure.

"Where it comes to Mr Thornton, we cannot easily discern any link between pay and performance ... OPTrust has decided to also withhold votes from returning compensation committee members," said a spokeswoman for the pension fund manager.

The investor outrage comes amid a growing outcry about large pay packages for senior executives at some Canadian companies.

Canadian Imperial Bank of Commerce lost its advisory vote on its executive compensation structure on Thursday, in the face of blowback over mega payments to two retired executives.

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