Share Performance and Executive Compensation
Change in Named Executive Officer Total Compensation(1)
versus Barrick Cumulative Value(2) of Cdn $100 and US $100 Investment
December 31, 2013 to December 31, 2018
- Total compensation represents the total reported value of salary, API, grant date fair value of equity-based LTI awards, pension value, and all other compensation from the Summary Compensation Table for the NEOs in such role as at December 31 each year. To provide a consistent basis of comparison over the five-year period, the figures for all years include total compensation for only the top five NEOs who were active in their roles as of December 31 each year. The compensation for interim NEOs and departed NEOs has been excluded; however, this information is disclosed in the information circular for the relevant year. Total compensation for all NEOs was included for 2018 to enable year-over-year comparability. For 2018, NEO compensation is disclosed in the Summary Compensation Table.
- Dividends paid on Barrick Shares are assumed to be reinvested at the closing share price on the dividend payment date.
Five-Year Total Shareholder Return on Cdn $100 and US $100 Investment
Five-Year Change in NEO Total Compensation
|NEO Total Compensation
(Indexed to 2013 Compensation)
|NEO Total Compensation (U.S. millions)||$28.89||$29.73||$15.82||$25.73||$23.61||$28.53|
Each year, the Compensation Committee reviews NEO total compensation in the context of their individual and collective contributions to Barrick’s financial and operational performance. The Committee also reviews NEO total compensation in the context of the overall shareholder experience, which includes an assessment of progress against the achievement of long-term strategic alternatives, using various metrics including TSR performance. Due to the long-term nature of the mining industry and the volatility of the gold price, the Committee takes a balanced view when assessing performance. Short-term performance delivered, including demonstrable actions taken to address critical issues facing the business, is considered alongside Barrick’s emphasis on sustainable profitability and long-term value creation.
2018 was another year of solid execution, driven by exceptional leadership, and effective collaboration and teamwork. It also provided a strong foundation for our transformational, nil-premium merger with Randgold. Our focus on capital discipline allowed us to increase investments in organic growth, while returning more capital to shareholders, significantly reducing our debt, and further strengthening the Company’s balance sheet. Reflecting our commitment to shareholder returns, we increased our annual dividend by 33%, from 12 cents per share in 2017 to 16 cents per share in 2018. Our debt repayments over the past five-and-a-half years total approximately $10 billion. With more than 85% of the Company’s outstanding debt due after 2032, Barrick now has one of the strongest balance sheets in the industry.
From 2013 to 2018, average market gold prices declined from an average of $1,411 per ounce to an average of $1,268 per ounce, which is reflected in the decline of our share price on the TSX and NYSE over the same period. However, following the announcement of Barrick’s nil-premium merger with Randgold on September 24, 2018, our share price on the NYSE increased 29% up until the completion of the Merger on January 1, 2019. By comparison over the same period, the share price of the Senior Gold Peers increased by an average of 7%, while the average market gold price also only increased by 7%.
Our transformational merger with Randgold created a truly industry-leading gold mining company. It significantly strengthened Barrick’s position across key metrics, including: ownership of five of the world’s top Tier One Gold Assets and two more under development; the lowest total cash costs(1); high quality gold reserves; and extensive land positions in many of the world’s most prolific gold districts, positioning the Company for sustainable growth.
Balancing the considerations above, the Compensation Committee awarded total compensation of $28.53 million for the 2018 NEOs. This reflects a decrease of 1% from 2013 (compared to our five-year cumulative TSR of +3.9% and -19% on the TSX and NYSE, respectively), 7% of Barrick’s adjusted net earnings(2) of $409 million, and 0.4% of Barrick’s common shareholder equity of $7,593 million as at December 31, 2018.
- Lowest total cash cost is non-GAAP financial performance measure based on data from Wood Mackenzie with no standardized definition under IFRS and therefore may not be comparable to similar measures presented by other companies. For further details, please see “Other Information – Use of Non-GAAP Financial Performance Measures” and “Other Information – Third Party Data”.
- Adjusted net earnings is a non-GAAP financial performance measure with no standardized definition under IFRS and therefore may not be comparable to similar measures presented by other companies. For further details, please see “Other Information – Use of Non-GAAP Financial Performance Measures” and “Other Information – Third Party Data”.