Canadian Mining Journal

News

GOLD: BCI opposes Goldcorp’s US$12 million retirement bonus for Ian Telfer



BRITISH COLUMBIA – British Columbia Investment Management Corp. says it will vote against the proposed merger of Goldcorp and Newmont Mining due to Goldcorp’s decision to award its chairman, Ian Telfer, a US$12 million retirement allowance.

BCI, which provides investment management services to B.C.’s public sector and has about C$145.6 billion under management, says the retirement allowance is almost triple the previously disclosed entitlement of US$4.5 million and is “inconsistent with the governance principle of pay-for-performance and sets a troubling precedent in the capital markets.”

“BCI finds this decision to be fundamentally misaligned with the interests of shareholders who have experienced a significant destruction of almost 53% in value since 2006,” Daniel Garant, BCI’s senior vice president, commented in a press release. “While we welcome the recent announcement that Mr. Telfer will no longer take up the position of deputy chair at Newmont should the merger go through, we fail to see how such an egregious payout is warranted.”

BCI, one of Canada’s largest institutional investors in the public equity markets with holdings of C$64.5 billion, also noted that it “places significant value on good corporate governance and believes that decisions around compensation – for both management and board of directors – are critical to a company’s governance.”

Goldcorp declined a request from The Northern Miner for comment.

The company referenced Telfer’s retirement allowance on page 88 of its 249-page information circular of March 7, stating the increase of the  allowance to US$12 million from the mining executive’s previous entitlement of US$4.5 million was recommended by the Human Resources and Compensation Committee, reviewed and considered by the Goldcorp Special Committee, and approved by the Goldcorp board “on the basis of Mr. Telfer’s role as founder and strategic leader of Goldcorp subsequent to the acquisition of Glamis Gold in November 2006.”

“At that time, Mr. Telfer assumed the role of chairman and relinquished entitlement to benefits he would have otherwise been entitled to receive as an executive, including participation in the various executive incentive plans, other than a retirement allowance,” the circular stated. “The retirement allowance approved in 2006 did not contain any indexing to reflect inflation, and other than his annual salary and annual Goldcorp RSU grants made at the same value as other Goldcorp directors, Mr. Telfer did not receive any other benefits from Goldcorp since that time.”

This story first appeared on www.NorthernMiner.com.