Barrick Gold Corp , whose shares have languished in recent years despite surging bullion prices, has ousted Chief Executive Aaron Regent and promoted Chief Financial Officer Jamie Sokalsky to the top job at the world's largest gold miner.
Shares of Barrick have risen just 3.9 percent since the market close on Jan. 15, 2009, the day before Aaron Regent took over as Barrick CEO. By comparison, the S&P/TSX Global Gold Index, which includes Barrick, has risen 18.8 percent in the same period.
Barrick's shares, which rose 2.1 percent to C$44.63 on Toronto Stock Exchange after Wednesday's open, were hit particularly hard in the aftermath of its C$7.3 billion ($7.02 billion) takeover of Equinox Minerals.
The deal boosted the company's exposure to the cyclical copper market without adding gold assets. Some shareholders saw that as a misstep.
It could be that they're looking for a fall guy after the disastrous Equinox acquisition, which we believe they overpaid for by about 50 percent, said George Topping, a mining analyst at Stifel Nicolaus, an investment banking and brokerage firm in Toronto.
The Lumwana copper mine in Zambia, acquired as part of the Equinox takeover, has struggled with high costs and operational hiccups.
Topping speculated that the company could have more bad news to come.
You've got to ask yourself, why now?, he said. Does it mean perhaps that there's more problems, particularly with the Equinox assets, that are still to come?
Analysts and investors have said the stock's lackluster performance may also reflect what they consider to be an insufficiently generous dividend. Gold miners, reaping record profits on the high price of gold, are facing mounting pressure to give more back to shareholders.
Toronto-based Barrick, which was not immediately available for further comment, said in a statement that Jamie Sokalsky would replace Regent as president and CEO and on the Barrick board of directors, effective immediately.
We are fully committed to maximizing shareholder value, but have been disappointed with our share price performance. Our board has every confidence in Jamie's experience and commitment to take our company forward, founder Peter Munk said in the statement.
Sokalsky joined Barrick as treasurer in 1993 and became CFO in 1999. He previously worked at grocery holding company George Weston Ltd for 10 years.
Barrick named an existing director, John Thornton, as co-chairman of the board, a role he will share with Munk.
African Barrick Gold, Barrick's 74 percent-owned Africa-focused subsidiary, said its parent would nominate a replacement to its board after Aaron Regent's departure. Regent was non-executive chairman of ABG.