Letter from the Lead Director

March 29, 2019

Dear Fellow Shareholders,

As a Board of Directors, our work on your behalf is guided by three core principles: we are a highly engaged board; we seek feedback from and listen to our fellow owners; and we apply rigorous risk oversight across every area of the business, holding management to account. We believe in continually setting the bar higher and clearing it, and ensuring that the Company’s leaders do not stray from our core mission of becoming the world’s most valued gold mining business, to ensure we deliver sustainable returns for our owners and other partners.

In connection with the merger of Barrick and Randgold, which became effective on January 1, 2019, the Executive Chairman and I worked with the Corporate Governance & Nominating Committee to reconstitute a nine-member Board, seeking a balance of experience and knowledge of both companies in order to facilitate a seamless and effective transition. We believe that our Board members bring diverse and strategically relevant backgrounds to the Company, and reflect the global scale of the challenges, risks and opportunities facing our business today.

As our Executive Chairman noted in his letter, we sadly lost one of our directors, María Ignacia Benítez, to cancer in late February. Her loss has echoed across the Company and we all share in the immense grief felt by María’s family and friends. The Corporate Governance & Nominating Committee is now actively looking for an equally compelling and qualified female candidate to appoint to the Board.

Determining executive compensation is another core responsibility of the Board. At the heart of our partnership culture is the belief that leaders must be owners. The goal of our compensation system is to drive the highest possible emotional and financial ownership among the Company’s senior executives, now and over the long-term, while linking compensation to the Company’s performance and the experience of our shareholders. A significant portion of our leaders’ compensation is in the form of Barrick shares that must be held until they retire or leave the Company.

To determine the Executive Chairman’s incentive compensation for 2018, the Compensation Committee undertook an evaluation of his performance against a set of strategic goals, Barrick’s Return on Capital Employed (ROCE), as well as an assessment of the overall shareholder experience in 2018.

In this regard, the Board recognized the Executive Chairman delivered against all the annual initiatives we set out for him in 2018, Barrick’s 3-year average ROCE performance of 8.3%, and his leadership in driving Barrick’s transformational merger with Randgold, following years of deliberate planning and execution. Mr. Thornton personally developed and executed the distinctive nil-premium merger, which strengthened Barrick’s position across all core metrics relative to its senior gold peers. Since the announcement of the merger up until completion of the transaction on January 1, 2019, our share price on the New York Stock Exchange increased 29%. This equated to an increase in our market capitalization of $3.6 billion. By comparison over the same period, the share price on the New York Stock Exchange and the Australian Securities Exchange of Barrick’s senior gold peers increased by an average of 7%, while the average market gold price also only increased by 7%. Considering these factors, and recognizing Barrick’s position as the best performing stock among its senior gold peers in 2018, the Committee recommended, and the independent directors approved, a total incentive compensation award of $9.735 million for the Executive Chairman. In keeping with Barrick’s industry-leading holding requirements and clawback provisions, Mr. Thornton was required to use a majority of the after-tax proceeds of this award to purchase Barrick shares, which he must hold until retirement, further building on his substantial ownership position of more than five million Barrick shares. He now holds 5,215,000 Barrick shares, nearly 29 times his base salary. Equally, our new President and Chief Executive Officer, Mark Bristow, converted his entire shareholding in Randgold to Barrick shares, and now owns more than five million Barrick shares.

For 2018, the Compensation Committee gave Barrick’s management leaders a collective grade of 50 out of 100, as measured against our long-term scorecard. Our Named Partners received an average score of 75 out of 100 on their personal scorecards, which are tailored to their individual responsibilities.

From nearly every perspective, 2018 was a transformational year for Barrick. As we move forward as one Company, it is incumbent on me and the other members of the Board to ensure that our leaders do not relent in their pursuit of Barrick’s over-arching objective: to be the world’s most valued gold mining business, and delivering sustainable returns to our owners and real benefits to our partners, host countries and communities.


J.B. Harvey
Lead Director on behalf of the Barrick Board of Directors