Barrick Gold Corporation (USA) (NYSE:ABX): Departure of Chairman Is a Victory for Shareholders


Dallas, Texas 11/13/2013 (Financialstrend) – Recently, Barrick Gold Corporation (NYSE:ABX)’ founder and Chairman Mr. Peter Munk revealed that, he is planning to take retirement, but though the Canadian business community gives esteem honor to this industry’s titan, he should not expect an appraisal from the shareholders.

Peter Munk’s endowment:

During the last week Barrick Gold Corporation (NYSE:ABX) is expecting to update the investors before the end of this year regarding its initiatives about the renewal of the board and is also going to review its compensation practices. But then again the most important announcement was regarding the retirement of the founder of the Barrick Gold Corporation (NYSE:ABX) Mr. Peter Munk from the post of the chairman. Though the timeline was not provided, but the expectation is that the departure is going to take place at the AGM (Annual General Meeting) of the company next year.

Shareholders may request to differ.

Under the leadership of Mr. Peter Munk the previous decade at Barrick Gold Corporation (NYSE:ABX) has been marked by a number of wrong steps. The failure of the company in a commodity price hedging program costs to investors billions, as in a costly empire building campaign, the company purchased number of mines at high prices which is unjustifiable and also its forays into copper resulted in a $4 billion write-down.

Lessons out of this fiasco:

The 3 important lessons learned from this investment tragedy are: first is to make sure that the people whom you trust your capital hasalso a skin in the game, Mr. Peter Munk held only a little of his wealth in the stock position of the company so, it would be highly questionable that he and the board of the company would have administered this huge destruction of wealth if their money was on the line.

Secondly, one should understand how the management is rewarded and finally, the departure of Mr. Peter Munk is an indication that the shareholders who are involved have a right to say in how the company is run.

While trading on November 12, 2013Barrick Gold Corporation (NYSE:ABX) dropped by 2.24%. And the shares closed at $23.96.