Barrick Gold Corp. (TSE:ABX), the world’s largest producer of the metal by volume, indicated today that its 86-year-old founder and chairman, Peter Munk, is likely to step down from his post before the company's annual meeting next year.
The board is addressing issues including changes to executive-compensation arrangements, and the “rejuvenation” of the board through departures and the addition of independent directors, The Toronto-based company said in a filing today.
"The board is addressing the issues that have been raised with our directors, which include modification of the company's executive compensation arrangements, the rejuvenation of the board through a combination of departures from the board, the addition of independent directors and succession in the chairman role at the company, consistent with Munk's desire to retire as chairman of the board," the filing said.
The comments were made in the company’s formal $3-billion U.S. stock sale filing, which was unveiled last week after Barrick announced plans to suspend construction at its costly Pascua Lama mine in South America.
Barrick said it intends to update the market before year end on these initiatives, with governance changes expected to take effect in conjunction with Barrick’s next annual meeting. This year's meeting was held in April.
Munk started the company in 1983 and forged it into the world's largest gold producer. But recent missteps have raised questions about the leadership of a man once viewed as a mining-industry visionary.
Barrick faced a minor investor uprising at this year's annual meeting, with some 85 percent of its shareholders rejecting its nonbinding resolution on executive compensation.
The uprising started after a group of Canada's top pension funds said they opposed Barrick's $11.9 million signing bonus for Co-Chairman John Thornton, the man tipped as the miner's next chairman.
Adding to the discontent, Barrick has been plagued by problems, such as the ballooning capital costs at its key growth project, Pascua-Lama, a mine it has been trying to build high in the Andes Mountains on the border of Chile and Argentina.
Barrick said last month that it would stop development of Pascua-Lama indefinitely, a surprise reversal on a project that has already cost it more than $5 billion.
Barrick shares sank 1 percent to C$18.80 at 1:34 p.m. in Toronto, extending this year's losses to 46 percent.