Goldcorp's Ian Telfer Won't Join Newmont As Pressure Builds Over Compensation
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(Kitco News) - Investors are seeing a new twist in what has been never-ending drama as Newmont Mining and Goldcorp move forward their proposed merger.
Wednesday, Goldcorp announced that board chairman Ian Telfer will not be joining the Newmont board of directors when the merger is complete.
“Mr. Telfer is focusing all of his efforts on having the Goldcorp shareholders approve the pending transaction with Newmont,” the company said in the press release.
The move comes as the company and Telfer came under significant pressure over his retirement compensation package. Last week it was revealed that Telfer would receive a lump sum retirement allowance valued at around $12 million, almost a three-fold increase from his initial retirement package valued at $4.5 million.
Many analysts have come out strongly against the compensation. Joe Foster, portfolio manager with VanEck, which is Goldcorp’s biggest shareholder and third biggest Newmont shareholder, told the Globe and Mail that he was “appalled” by the payment given long-term disappointing price performance.
Rick Rule, CEO of Sprott U.S. Holdings, told Bloomberg News that Telfer’s special bonus appeared “excessive.”
Adrian Day of Adrian Day Asset Management said in a recent comment that he would vote against the merger if the compensation proposal is not rescinded.
“To triple Telfer’s payment right before the acquisition is one slap in the face too many, an insult to shareholders,” he said. “We have no voice in these payments, so this is our only way to make our position clear.”
Day noted that since 2006 Goldcorp shareholders have seen their investment lose two-third of its value.
The recently created Shareholders’ Gold Council (SGC) also expressed its condemnation of Goldcorp’s board for approving the new compensation package.
“While Goldcorp is telling its shareholders to sell their shares close to a 13-year low, Goldcorp management stands to reap over US$33 million in potential change of control payments,” the group said in its statement.
The uproar over executive compensation comes after Newmont spent nearly a month fighting off a hostile bid from Barrick Gold.