2018 Information Circular
Total Page:16
File Type:pdf, Size:1020Kb
Barrick Gold Corporation Information Circular Inside this Circular Letter from the Executive Chairman ....................................................................... II Letter from the Lead Director ............................................................................ IV Notice of 2018 Annual Meeting .......................................................................... 1 Key Terms ............................................................................................ 2 Meeting and Voting Information ......................................................................... 3 Business of the Meeting ................................................................................ 8 Barrick’s FinancialStatements .......................................................................... 8 Electing Directors .................................................................................... 8 Appointing the Auditor ............................................................................... 8 SayonPay Advisory Vote ............................................................................. 9 Other Business ...................................................................................... 9 Executive Summary .................................................................................... 10 Our Commitment to Corporate Governance ................................................................ 19 Directors ............................................................................................. 23 Committees of the Board ................................................................................ 33 Report on Director Compensation and Equity Ownership ...................................................... 40 Compensation Discussion & Analysis ...................................................................... 46 2017 Compensation of Named Executive Officers ............................................................ 47 2017 Compensation of the Executive Chairman ........................................................... 47 2017 Compensation of our Named Partners .............................................................. 51 Compensation Governance and Oversight ................................................................ 65 Summary Compensation Table......................................................................... 73 Incentive PlanAward Tables ........................................................................... 76 Other Information ..................................................................................... 85 Equity Compensation Plan Information .................................................................. 85 Directors’ and Officers’ Insurance and Indemnification ...................................................... 88 Use of Non-GAAP Financial PerformanceMeasures ......................................................... 88 SCHEDULE A: Corporate Governance Disclosure ............................................................. 91 SCHEDULE B: Mandate of the Board of Directors ............................................................ 109 SCHEDULE C: Key Characteristics of the Performance Granted Share Unit (PGSU) Plan .............................. 111 SCHEDULE D: Key Characteristics of the Restricted Share Unit (RSU) Plan ......................................... 113 SCHEDULE E: Key Characteristics of the Performance Restricted Share Unit (PRSU) Program ......................... 114 Barrick Gold Corporation | 2018 Circular I March 16, 2018 Letter from the Executive Dear Fellow Shareholders, Chairman On behalf of the Board of Directors, I am pleased to invite you to our Annual Meeting of Shareholders. Over the past year, we made progress on the strategic priorities that will create long-term value per share for our fellow owners — yet we also learned how much work we still have to do in our quest to become a leading twenty-first century company. Two challenges in particular weighed on our results and reminded us that job number one must always be consistent, reliable execution. Barrick generated operating cash flow of $2.07 billion and free cash flow of $669 million. We reduced our total debt by $1.51 billion, exceeding our target for the year. We maintained strict discipline in our capital allocation, whichincluded raising our dividend by 50 percent and increasing investments in organic projects. As a result we added eight million ounces of proven and probable gold reserves at existing operations (as well as the Goldrush project) through drilling, more than replacing the reserves we depleted through processing. We unified our Cortez and Goldstrike mines into a single, efficient operation. We improved our safety performance, with the lowest incident rate in the Company’s history — among the lowest in the industry. That achievement was overshadowed by the tragic deaths of two colleagues in workplace accidents; here, too, we still have a long way to go. Finally, we continued to strengthen our partnership culture, particularly in creating distinctive, enduring relationships with Chinaand its best companies. For all these achievements, we also know thatsuccessisnoinsulator against setbacks. In March, our Veladero mine in Argentina suffered its third environmental incident in 18 months. We took dramatic steps to strengthen the mine’s operating systems, including major modifications to the heapleachfacility. Then, the government of Tanzania imposed a banonconcentrate exports and later levied a multi-billion-dollartax claim against Acacia Mining plc, acompany operated independently of Barrick, in whichwehave a 63.9 percent equity stake. Barrick entered into directdiscussions with the Government of Tanzania to develop a proposalfora mutually beneficial resolution. II Barrick Gold Corporation | 2018 Circular In the wake of these challenges, our most important priority is achieving and maintaining consistent, reliable execution in order to deliver the full value of our portfolio. We have some of the highest-quality, lowest-cost gold assets in the world. We have sold most of our high-cost, non-core operations, and our portfolio is now focused primarily on high-margin, long-life gold operations and projects clustered throughout the Americas. We have a materially stronger balance sheet. Our overriding objective remains unchanged: growing free cash flow per share over the long-term. We invite you to review our information circular, in which you can find all the information you will need to inform your vote, as well as the details on how to attend our Annual Meeting, how to vote, and how to contact me, my fellow directors, and the Company. We are committed to earning the trust that you, our fellow owners, have placed in us. We look forward to your participation in the Annual Meeting on April 24, 2018. Sincerely, John L. Thornton Executive Chairman Barrick Gold Corporation | 2018 Circular III March 16, 2018 Letter from the Lead Dear Fellow Shareholders, Director As your Board’s Lead Director, I would like to share with you some of the best-in-class principles and practices that underpin our governance approach, and to review compensation results for 2017. We work to improve our governancepractices on acontinuous basis and have done so recently in a number of ways: • For the second yearina row, independent directors met with Barrick shareholders representing 19% of the Company’s shares, without management or the Executive Chairman present. •Wehave added an annual Sustainability Day to our ongoing investor engagement activities. •Wemake it possible for you to contact me or our Executive Chairman directly. • We signed, and fully support, the recommendations of the Financial Stability Board’s Task ForceonClimate-related Financial Disclosures. We include information regarding our climate strategy in our annual financial filings. •Weare a member of Canada’s 30% Club and are seeking more diverse candidates for our Board. •Weare further strengthening the diversity of our Board and its capabilities with the nomination of two new independent directors: Patricia Hatter, an experienced leader in technology and digitaltransformation, and María Ignacia Benítez, who brings an intimate understanding of the Chilean political, legal, environmental, and regulatory system. • Our Risk Committee receives regular updates on all aspects of the Company’s cybersecurity strategy. Determining executive compensation is one of our most important governance functions. At the heart of our partnership culture is the belief thatleaders 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 Barrickshares that cannot be sold until they retire or leave the Company. IV Barrick Gold Corporation | 2018 Circular In keeping with our commitment to transparency, we use pre-disclosed targets to assess our leaders’ performance. To determine the 2017 incentive compensation for the Executive Chairman, we applied the Performance and Compensation Framework that we disclosed in our 2017 Circular. We considered the Executive Chairman’s strong leadership and execution against the initiatives that we set out for him at the beginning of the year; a return on capital employed (ROCE) of 9.4%, which is within our long-term