Newmont must do much better, as its CEO comes off best

Newmont CEO's 2008 compensation hits $10.3 million

By SANDY SHORE

Associated Press, March 9, 2009

Newmont Mining Corp. gave its chief executive a compensation package valued at $10.3 million in 2008 as gold prices soared with investors seeking safer assets in the shaky economy, according to a regulatory filing on Monday.

The package was more than double what Chief Executive Officer Richard O'Brien received in 2007 when he became CEO of the gold mining giant that July.

The bulk of the 2008 package was in stock and options awards that the Denver-based company valued at $7.3 million when they were granted in February, April and October.

The total includes a retention incentive of 100,000 shares of restricted stock and 300,000 stock options at an option exercise price of $26.91 that will vest in full on Oct. 30, 2013.

Newmont said the board of directors approved the grants in October as a special incentive for O'Brien to remain with the company.

O'Brien also earned a $1 million base salary, a $1.1 million bonus and $800,625 in non-equity incentive compensation, according to the filing submitted to the Securities and Exchange Commission.

Newmont gave O'Brien $88,023 in other compensation for insurance, company contributions to defined contribution plans, a golf club membership and personal use of administrative assistant services.

For his partial tenure in 2007, O'Brien earned $760,000 in base salary; a $1.04 million bonus; $368,690 in non-equity incentive plan compensation and $44,776 in other compensation. He received stock and options awards valued at $2.6 million when they were granted.

During 2008, Newmont earned $853 million, compared with a loss of $1.89 billion in 2007. Total revenue rose 12 percent, to $6.2 billion from $5.53 billion. The company benefited from the recession as more investors turned to assets they could hold, such as gold, and away from the volatile stock market.

The AP's total pay calculations include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission.

Newmont community ties faulted

A study finds a large gap between company public-relations policies and how it operates at mine sites.

By Gargi Chakrabarty
The Denver Post

10th March 2009

Newmont Mining Corp. talks the talk but doesn't walk the walk when it comes to dealing with communities near its gold mines.

That's the finding of an independent group that studied how well the Denver- based gold producer's practices conform with its policies.

The Community Relationships Review was compiled by the group over 18 months, drawing from interviews with more than 250 local community members and nongovernment organizations in five countries.

The review found that Newmont, the world's second-largest gold producer, has policies to engage with communities that are "quite good" but that there are significant gaps between the policies and how it operates at mine sites.

It found a "consistent lack of accountability in the implementation of Newmont's community-relations objectives."

"As the report notes, we have very good standards in place; we need to do a better job of implementing those standards at the mine sites," said Newmont spokesman Omar Jabara.
Newmont paid for the review, which studied the company's community relations in Peru, Indonesia, New Zealand, Ghana and Nevada.

The review resulted from a shareholder resolution sponsored by Christian Brothers Investment Services and 10 other faith- based investors in April 2007, close on the heels of Newmont's numerous conflicts with communities at its mine sites.

For example, Newmont in August 2006 had to temporarily shut down mining at Peru's Yanacocha mine because of safety concerns after villagers demanding jobs and clean water blocked road access to the mine.

"The review was designed to be a constructive criticism of Newmont," said Caroline Rees, director of the governance and accountability program at Harvard University's Kennedy School of Government, who was an adviser on the review panel.

The review includes several recommendations such as identifying conflicts and managing community concerns to avoid open conflicts.

Jabara said the review findings were not a surprise because "social engagement is probably the least developed of the social disciplines."

Gargi Chakrabarty: 303-954-2976 or gchakrabarty@denverpost.com

How Newmont can reach out

Recommendations for Newmont Mining to improve its community relationships, from Community Relationships Review:
•Have a strategic management plan for community relations.
•Hold regional and local managers accountable for implementation of community-relationship objectives.
•Identify conflicts and manage community concerns before open conflict arises.
•Ensure that mine sites have responsive grievance mechanisms.