Barrick Gold Is About to Get Back on Track

The gold miner is ready to start mining once more.

Apr 13, 2014 at 10:00AM

Screen Shot

Gold pour at Lagunas Norte, Peru. Source: Barrick Gold.

After several years of tumult, investors can be forgiven for looking forward to Barrick Gold's (NYSE:ABX) entering a period of quietude, and there are indications that may be what's happening. Institutional Shareholder Services, the influential proxy service that weighs in on corporate governance issues, has given its blessing to the gold miner's compensation package indicating a return to normalcy.

Investors have been questioning management decisions for several years, including hedging policies that caused billions in writedowns; a controversial, overpriced takeover of copper miner Equinox Minerals; asset sales such as Barrick Energy, that forced it to suffer hundreds of millions in losses; and what some regarded as obscene pay practices that had both ISS and Glass Lewis recommending clients vote against the packages.

During a time when Barrick's stock lost two-thirds of its value, its far-flung global operations came under attack by local interests, its debt load climbed to crippling proportions, jobs were slashed, and the price of gold crumbled impeding its ability to advance certain projects or develop new ones, the board of directors was lavishing management with multimillion-dollar signing bonuses and payments.

In what even one of its directors termed "a huge wakeup call," more than 85% of its shareholders voted against Barrick's compensation plan last year in a non-binding referendum.

Although it didn't have to follow the advice its investors gave, it was prudent to do so and the gold miner initiated what would become a major shakeup, starting with company founder Peter Munk's retirement and the appointment of four new independent directors to the board. While that should have been a sign that things were changing, it was immediately thrown into turmoil again when two existing independent directors abruptly resigned because they charged that Munk hand-picked the replacements, bringing into question just how independent they would be.

Screen Shot

Veladero, Argentina. Source: Barrick Gold.

But maybe the new tone from headquarters and ISS's call to support the pay package could be the beginning of the turnaround investors been waiting for.

As the Fool's Vladimir Zernov recently wrote, the new compensation scheme ties pay to performance by mandating management will only be compensated if the miner achieves certain specific goals, that the largest part of the compensation will only be convertible into shares in the company, and then the executives can get at it only when they retire or leave the company.

Barrick Gold remains the world's largest gold miner, and it continues to be one of the lowest-cost producers. It still has a vast, valuable portfolio with a deep bench of projects it can call on when industry economics improve, which I remain convinced will occur sooner rather than later. Investors have looked forward to the time when they can forget about boardroom antics and concentrate on mining gold again, and with the April 30 vote on executive pay fast approaching, they may have arrived at that happy place at last.

Big banking's little $20.8 trillion secret, that's like gold in the bank
There's a brand-new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banks. That's bad for them, but great for investors. And amazingly, despite its rapid growth, this company is still flying under Wall Street's radar. To learn about about this company, click here to access our new special free report.

Rich Duprey has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers