Exorbitant Pay Packages Too Common23 May 2018 18:16
...The boards are maybe nominally independent but are still fairly clubby... The compensation committees shroud themselves under the warm blanket of having hired a third-party consultant to validate whatever they want to pay the
CEO and the other named executive officers...
Eldorado Gold Corp. is once again attracting criticism for excessive executive compensation, a year after the mining company lost a shareholder �say-on-pay� vote.
According to documents filed with securities regulators on Friday, the Vancouver-based miner paid its new chief executive officer George Burns $7.3-million in 2017, when Eldorado shares lost more than half of their value.
�For a company that earns so little, that $7.3-million is too much,� said Benoit Gervais, portfolio manager and head of the resource team at Mackenzie Investments.
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Mr. Burns was paid a salary of $916,000, awarded share units worth $3.3-million, granted stock options valued at $1.7-million, earned a cash bonus of $490,000, accumulated pension payments worth $275,000 and received �other� compensation worth $600,000.
About $3.6-million of Mr. Burns� pay is in so-called �replacement compensation� − essentially a one-time bonus paid to make up for money he would have made had he stayed at his former employer. Mr. Burns left Goldcorp Inc. where he was chief operating officer at the end of 2016 and joined Eldorado in February, 2017. He was named CEO in April, 2017.
Eldorado has been one of the worst-performing Canadian gold stocks over the past few years. In 2017, production at Eldorado�s flagship Turkish mine fell dramatically after its ore-recovery rates unexpectedly plummeted. The company has also been plagued with geopolitical problems and it has struggled to win permits to build a new gold mine in Greece.
Paul Wright, Mr. Burns� predecessor, earned $7.8-million in 2016, attracting the ire of shareholders. Last year, Eldorado lost a say on-pay vote, receiving just 43-per-cent support for its pay practices in a non-binding vote
Mackenzie�s Mr. Gervais said he struggled with the �sheer magnitude� of Mr. Burns� compensation, considering both Eldorado�s underperformance and how his pay compared with that earned by executives at some of the world�s biggest mining companies.
Jean-S�bastien Jacques, the CEO of Rio Tinto PLC, for example, earned US$4.4-million in 2017 for running a mining company with a market capitalization of US$104.6-billion. Eldorado�s market value is $1-billion.
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