|The Board recommends a vote FOR approval of the advisory vote on executive compensation.|
We are a Company of Owners and we are invested in the success of the Company, now and over the long-term.
Over the past three years, we implemented a number of changes to our compensation programs to underscore our commitment to partnership, and the belief that every single employee should be personally invested in the long-term success of Barrick. A significant portion of the compensation for our Executive Chairman and Named Partners is delivered in share-based, long-term incentives (LTI), with holding requirements that far exceed those of our peers and the broader market. Our Executive Chairman and Named Partners are deeply invested in Barrick’s performance and success, with collective ownership of over 2.9 million Barrick Common Shares worth more than $36 million as at March 15, 2018. We are not merely aligned with owners – we are a Company of Owners, and we are financially and emotionally invested in transforming Barrick into a leading twenty-first century company.
Our incentive compensation programs motivate our Executive Chairman and Named Partners to think in decades, plan in years, and act with urgency to transform Barrick into a leading twenty-first century company.
To drive excellence in all that we do, we hold our Executive Chairman and our Named Partners to the highest standards of individual and collective performance. Our incentive programs are entirely performance-based and designed to reward consistent high-level execution, Best-in-Class operations, disciplined capital allocation, continual self-improvement, and building and maintaining partnerships of real depth and trust with all of our stakeholders. We prospectively disclose our short-term and longterm performance measures each year to hold our Executive Chairman and Named Partners accountable for results.
At the heart of our pay-for-performance system is our goal setting process. We review our business plan at the beginning of each year to define the key areas of focus and priority actions for each role. We also review the Long-Term Company Scorecard against our strategic plan to ensure the performance measures remain relevant. Long-term performance ranges are reviewed and set based on challenging levels of performance that reflect Barrick’s Life of Mine Plans, analyst and shareholder expectations, the competitive environment, and Barrick’s long-term vision.
- ROIC is an internal performance measure used to manage performance. ROIC measures return on invested capital by taking Adjusted EBIT (Adjusted EBITDA less depreciation) less cash taxes as disclosed in the consolidated statements of cash flow and removing the impact of foreign currency translation gains/losses as disclosed in the consolidated income statements and dividing by average invested capital. Invested capital is calculated by taking consolidated assets as reported on our balance sheet net of assets not subject to depreciation as reported in Note 19 Property, plant and equipment of the financial statements in our 2017 Annual Report. Adjusted EBIT and Adjusted EBITDA are non-GAAP financial measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. For further information and a detailed reconciliation of these non-GAAP measures to the most directly comparable IFRS measures, please see Other Information – Use of Non-GAAP Financial Performance Measures.
- Free cash flow is a non-GAAP financial performance measure with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. For further details regarding non-GAAP financial performance measures, please see Other Information – Use of Non-GAAP Financial Performance Measures.