COMPENSATION FRAMEWORK BALANCING EXECUTIVE COMPENSATION IN THE COMMODITIES INDUSTRY
Newmonts compensation program is designed to focus managements efforts and reward for results in areas where they have the most
influence on driving business performance, as well as to motivate and retain leadership through various economic and commodity price cycles. We believe this approach aligns the incentive structure with business elements that support providing
long-term performance gains for our stockholders.
To promote long-term performance and sustainability as well as manage risk, the Company utilizes a
comprehensive performance-based compensation structure with an appropriate balance of operational, financial and share price incentives based on:
While providing incentives for performance, the design of our program is intended to mitigate excessive risk taking by
executives. Our LDCC believes that the mix and structure of compensation as described in this CD&A strike an appropriate balance to promote sustained performance without motivating or rewarding excessive risk. (See Executive Compensation
Risk Assessment in the Other Policies and Considerations section of this CD&A for additional information on our risk analysis.)
2016 PAY FOR PERFORMANCE STRUCTURE
Company results on
operational, financial and relative stockholder return measures have a direct link to our incentive compensation plans. We believe our incentive measures are key drivers for business results, support sustained long-term performance, and promote
stockholder alignment as shown in our executive compensation structure below.
Newmont Mining
Corporation 2017 Proxy Statement
33
SUMMARY OF 2016 INCENTIVE MEASURES, COMPANY
PERFORMANCE AND RESULTING COMPENSATION
The Company had strong 2016 operating performance which resulted in an above-target Corporate
Performance Bonus. We believe that if we are able to execute on the key measures in the short-term, long-term results will follow.
As our leadership is
responsible for long-term performance aligned with stockholder interests, our compensation is substantially weighted to long-term results. With this, incentive compensation value for the year measured as of December 30, 2016, was above target
at approximately 168.6% of target value as noted below:
The above table represents an average of current Named Executive Officer (NEO) incentive pay (excludes salary). The table
excludes the former CFO; the COO is reflected based on time in role.
(1)
|
Percent of total target incentive pay; based on NEO incentive mix with the exception of Ms. Brlas due to transition.
|
(2)
|
Includes actual Personal Bonus paid to each NEO for 2016 based on the achievement of
their personal objectives.
|
(3)
|
Reflects shares granted in 2016; realized value determined using the closing stock
price as of December 30, 2016 of $34.07; grant date fair value was $24.785 for all NEOs with exception of Ms. Buese; grant date fair value for Ms. Buese was $37.85 on November 1, 2016, related to her
sign-on
grant award.
|
Description of Above-Target Achievement for the Corporate Performance
Bonus and Corresponding Bonus Plan Funding.
The following table describes the above-target performance achieved in 2016 and the corresponding additional percentage of Corporate Performance Bonus plan funding above target. This is an
additional point of review to ensure performance and pay are aligned, and that a
return-on-investment
(ROI) perspective is incorporated in our
pay-for-performance
review:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Metric
|
|
2016 CPB
Performance
|
|
|
Additional
Bonus % Above
Target
|
|
|
All
Employee
Additional
Funding
(1)
|
|
|
|
|
|
Return on Investment /
Results of Above Target Performance
|
Safety
|
|
|
114.0
|
%
|
|
|
2.8
|
%
|
|
$
|
1.3 M
|
|
|
|
|
|
|
Safety performance among the best of the ICMM
(2)
|
CPB EBITDA
(3)
|
|
|
153.2
|
%
|
|
|
16.0
|
%
|
|
$
|
7.5 M
|
|
|
|
|
|
|
Earnings performance exceeded CPB EBITDA Target by over $260
Million
|
Cash Sustaining
Cost
|
|
|
131.9
|
%
|
|
|
9.6
|
%
|
|
$
|
4.5 M
|
|
|
|
|
|
|
Reduced operating cost below target by $110 Million
|
Project
Execution
|
|
|
135.1
|
%
|
|
|
3.5
|
%
|
|
$
|
1.6 M
|
|
|
|
|
|
|
Two projects moved to commercial production at or ahead of schedule and under
budget
|
Reserves and
Resources
|
|
|
148.0
|
%
|
|
|
2.4
|
%
|
|
$
|
1.1 M
|
|
|
|
|
|
|
Exceeded target additions to reserves and resources to support sustainable
inventory pipeline
|
Sustainability
|
|
|
182.7
|
%
|
|
|
4.1
|
%
|
|
$
|
1.9 M
|
|
|
|
|
|
|
Industry leader for Dow Jones Sustainability index for second year, Gold
Class and Industry Mover distinction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Result:
|
|
|
138.4%
|
|
|
|
38.4%
|
|
|
|
$17.9 M
|
|
|
|
|
|
|
Over $508 Million in benefit;
$17.9 Million additional bonus funding for all eligible employees
|
(1)
|
Represents additional Company bonus funding above target for all bonus eligible
employees; reflects corporate results applied to global population.
|
(2)
|
International Council of Mining and Metals (ICMM).
|
(3)
|
See Annex A for calculation of this non-GAAP compensation measure.
|
34
Newmont Mining Corporation 2017 Proxy Statement
2016 Say on Pay Vote and stockholder engagement
Newmont has historically received strong support from stockholders in favor of the Advisory Vote on the Compensation of the Named Executive Officers
(Say on Pay). For the past five years, our vote in favor results have been 94% or greater (excluding abstentions). Additional information regarding the Say on Pay vote is on pages 64 and 86-88.
While our historical results indicate strong support for Newmonts Officer compensation, the LDCC continues to review our executive compensation structure to
increase its effectiveness and further align with stockholder interests in light of changing industry dynamics.
Stockholder Engagement.
To
further ensure alignment with stockholder interests, we actively engage our largest investors and solicit feedback on our executive compensation programs. We have reached out to many of our largest stockholders with the intent of communicating our
programs, governance and performance, as well as obtaining feedback to be considered in future designs, and fostering open dialogue and regular communication to support alignment with stockholder interests. We will continue this practice as a
critical component of our annual governance review process.
Overall, results from stockholders feedback indicate support for Newmonts
structure, performance alignment and disclosure. During the course of our discussions, we received feedback regarding the types of metrics used in short-term and long-term incentive plans. As part of our process, all feedback is summarized and
discussed with management and the LDCC during our annual LDCC strategy session, and is considered for future plans and/or disclosure of executive compensation to align with their interests.
FOUNDATIONAL EXECUTIVE COMPENSATION PRACTICES
The following policies and practices highlight foundational elements of our compensation governance model. Our intent is to ensure pay programs incent performance in a manner that supports sustainable business
results which align with stockholder interests.
|
|
|
Best Practice Features of Our Program
|
|
|
✓
Competitive Stock Ownership Requirements 5x base salary for the CEO
|
|
✓
Committee Operating and
Governance Model
|
✓
Well-Managed Burn Rate
below
1%
|
|
✓
Regular Committee Charter
Review
|
✓
Appropriate Vesting Terms standard awards with at least a
3-year
vesting
cycle
|
|
✓
Risk Management Review of
Executive Compensation
|
✓
Compensation Clawback Provision
|
|
✓
Independent Committee
Advisor
|
✓
No Hedging, Pledging or Margin Policy
|
|
✓
Audit of Incentive Plan
Processes, Results and Payments
|
✓
Double-Trigger Change of Control
|
|
✓
Regular Executive
Sessions
|
✓
Discontinued Excise Tax
Gross-ups
for Employees Hired/Promoted into Change of
Control Eligible Roles in or after 2012
|
|
✓
Annual Executive Compensation
Strategy Meeting with the Committee review stockholder/Say on Pay feedback and potential plan improvements
|
✓
Reduced Change of Control benefits
(Details are provided in the section Post Employment
Compensation)
|
|
✓
Succession Planning Reviews
Completed Beyond CEO Staff
|
✓
No Employment Agreements
|
|
✓
Talent, Global Inclusion and
Diversity Reviews serve as input for succession and compensation planning
|
✓
No Repricing of Options
|
|
✓
Annual Benefits Review Covering
Health, Welfare and Retirement
|
Newmont Mining
Corporation 2017 Proxy Statement
35
SUMMARY OF KEY 2016 LEADERSHIP DEVELOPMENT AND
COMPENSATION COMMITTEE ACTIONS
The following highlights some of the key actions by the LDCC in 2016 as a supplement to ongoing practices
noted in Foundational Executive Compensation Practices below:
|
|
|
2016 LDCC Action
|
|
Description
|
The LDCC held joint sessions with the other Committees on relevant talent and compensation program
topics.
|
|
In select circumstances, the LDCC held joint
sessions with the other Committees where 1) the input and expertise of the other Committees would add value to the LDCCs decision making process, 2) efficiencies could be gained through collaboration, or 3) the other Committees would
benefit from visibility to talent-related discussions. Examples include:
Joint session with the Corporate Governance and Nominating Committee to review CEO
performance and pay; and
Review of short-term incentive plan metrics with the relevant Committees in advance of plan approval.
|
Held annual executive compensation strategy meeting to plan and identify continuous improvement
opportunities.
|
|
The LDCC Chair, Management and the Committees
independent consultant conducted planning around key operational, governance and strategic items; outcomes for 2016 included:
Increase focus on performance, succession and diversity, as well as further integrate talent and rewards programs, in alignment with the Companys human capital strategy;
Continue proactive focus on total rewards design to ensure continued effectiveness of incentive design and governance trends; and
Perform proactive and holistic review of compensation plans to ensure they support future business objectives and drive stockholder value.
|
Held additional meeting outside of regular LDCC meetings to review the target development process for
Newmonts short-term incentive plans.
|
|
The LDCC discussed the process for setting performance targets and ranges for the Companys short-term incentive plans.
Historical results and details on the statistical modeling that takes place to ensure rigor and stretch in the targets was reviewed; and
Details regarding the target setting process can be found in Target Setting and Calculation of Corporate Performance Bonuses.
|
36
Newmont Mining Corporation 2017 Proxy Statement
Philosophy and Principles
Compensation Philosophy.
Newmonts executive compensation programs are designed to effectively link the actions of our executives to
business outcomes that drive value creation for stockholders. In designing these programs, we are guided by the following principles:
|
|
Maintaining a clear link between the achievement of business goals and compensation payout.
We believe that:
|
|
(1)
|
Officers should be evaluated and paid based on performance that leads to long-term success and relative stock price improvement; and
|
|
(2)
|
Officer compensation programs can be an effective means of driving the behavior to accomplish our objectives, but only if each executive clearly understands how achievement of
predetermined business goals influences his or her compensation.
|
|
|
Selecting the right performance measures.
Equally important is the selection of those performance measures which need to be measurable and
linked to both increased stockholder value and Newmonts short-and long-term success.
|
|
|
Sharing information and encouraging feedback.
Focused and clear program design supports transparency for our stockholders. It is important for
stockholders to understand the basis for our Officers compensation, as this provides stockholders insight into our goals, direction and the manner in which resources are being used to increase stockholder value. We invite stockholder input and
actively engage stockholders in matters related to Newmonts executive compensation programs.
|
Transparency and open disclosure
are core components of Newmonts values.
Structural Principles that Guide Appropriate Compensation Design.
The following table
outlines the guiding principles in structuring our executive compensation plans:
Newmont Mining
Corporation 2017 Proxy Statement
37
Components of Total Compensation
The components of target total direct compensation for our Officers are described in the Executive Summary and stated below. We emphasize performance-based
at-risk
compensation, based on operational, financial and share price performance.
Developing Our Executive Compensation Program.
Each year the LDCC conducts a detailed analysis of executive
compensation designed to:
|
|
Assess the competitiveness of the Companys executive compensation levels against peer groups;
|
|
|
Consider the desired target benchmark for total executive compensation levels; and
|
|
|
Make necessary refinements to the compensation components to further align executive compensation with performance goals and ensure good governance practices.
|
Roles within the review process
. The LDCC meets on a regular basis with the Chief Executive Officer and representatives from
the Companys Human Resources and Corporate Legal departments. The role of management is to provide the LDCC with perspectives on the business context and individual performance of our Officers to assist the LDCC in making its decisions.
The Companys Human Resources Department supports the LDCC by providing data and analyses on compensation levels and trends. In addition, external independent compensation experts consult with the LDCC regarding specific topics as further
described in the following paragraph. An executive session, without management present, is generally held at the end of each LDCC meeting. The independent members of the Board of Directors make all decisions regarding the Chief Executive
Officers compensation in executive session, upon the recommendation of the LDCC. The LDCC Chair provides regular reports to the Board of Directors regarding actions and discussions at LDCC meetings.
Use of Independent Compensation Advisors
. The LDCC, which has the authority to retain special counsel and other experts, including compensation consultants,
has engaged Frederic W. Cook & Co. (Cook & Co.) to assist the LDCC with: (1) advice regarding trends in executive compensation, (2) independent review of management proposals, and (3) an independent
review and recommendation on Chief Executive Officer compensation, as well as other items that come before the LDCC. Cook & Co. has reviewed the compensation philosophy, objectives, strategy, benchmark analyses and recommendations regarding
Officer compensation.
At least annually, the LDCC reviews the support provided by the independent compensation advisors to ensure the level of support,
consultation and fees are appropriate and aligned with the LDCCs needs. The LDCC conducted a thorough review in 2013, including interviews of other independent compensation advisors, and upon completing the interviews, the Committee retained
the services of Cook & Co. based on their approach, expertise and fee structure.
38
Newmont Mining Corporation 2017 Proxy Statement
Cook & Co. is engaged solely by the LDCC and does not provide any services or advice directly to management
unless authorized to do so by the Committee. In connection with its engagement of Cook & Co., the LDCC reviewed Cook & Co.s independence including, but not limited to, the amount of fees received by Cook & Co. from
Newmont as a percentage of Cook & Co.s total revenue, Cook & Co.s policies and procedures designed to prevent conflicts of interest, and the existence of any business or personal relationship (including stock ownership)
that could impact Cook & Co.s independence. After reviewing these and other factors, the LDCC determined that Cook & Co. is independent and that its engagement did not present any conflicts of interest. Cook & Co.
also determined that it was independent from management and confirmed this in a written statement delivered to the Chair of the LDCC.
Compensation
Decision Process
. When making compensation decisions for Officers, the LDCC considers factors beyond market data and the advice of consultants. At the beginning of the compensation cycle, the Chief Executive Officer and Human Resources
Management provide a fulsome review of business performance, executive performance and proposed compensation (for executives other than the Chief Executive Officer) to the LDCC for consideration. The LDCC then considers the individuals
performance, tenure and experience, the overall performance of the Company, any retention concerns, the individuals historical compensation and the compensation of the individuals peers within the Company and market. While the LDCC does
have certain guidelines, goals, and tools that it uses to make its decisions, as explained below, the compensation process is not an exact science but incorporates the reasoned business judgment of the LDCC. Final decisions are made at a subsequent
meeting after full consideration of all factors highlighted below. Below is a summary of the performance review process for 2016, reflecting the process and integration of talent and rewards into decision making:
Compensation Components and Alignment to Compensation Philosophy
The components of our executive compensation program contain five main elements as shown in the chart at the beginning of this section. We explain the philosophy and key features of each below.
Determining the Proper Mix of Different Pay Elements.
In determining how we allocate an Officers total compensation package among various
components, we emphasize compensation elements that reward performance on measures that align closely with business success, underscoring our
pay-for-performance
philosophy. A significant portion of our executive compensation is performance-based or
at-risk.
Our Chief Executive Officer and other Officers have a higher percentage of
at-risk
compensation relative to other employees, because our Officers have the greatest influence on Company performance. Stock-based long-term incentives represent the largest component of pay, in order to
encourage sustained long-term performance and ensure alignment with stockholders interests. In the graphs below, we show the emphasis on
at-risk
or stockholder-aligned compensation through
performance-based short-term and long-term incentives compared to base salary, with the Chief Executive Officer reflecting the most significant
at-risk
portion of compensation.
Newmont Mining
Corporation 2017 Proxy Statement
39
Components of Compensation and Alignment to Goals.
The Company recognizes that its stock price is
influenced by the price of gold, copper and other commodities, which are outside of the control of the Company. Thus, as a way to balance the commodity fluctuation, the Company grants a mix of incentives including performance-leveraged stock units
(based on share return measures) and time-based restricted stock units (based on stock price performance) to align the interests of management with the long-term interests of stockholders. This balanced approach means that management needs to
achieve specific performance results to earn the incentives even in periods of positive gold/copper price movement, and that the equity package continues to motivate performance in down-cycles as the stock and restricted stock units continue to
retain value and have motivational impact even when gold/copper prices are falling. At the same time, the use of stock price-based incentives ensures that the highest rewards will only occur with an increasing stock price and performance that
exceeds the median of the Companys gold mining peers.
The components of the compensation structure are:
|
|
|
|
|
|
|
Time Horizon
|
|
Component
|
|
Purpose
|
|
Key Features
|
Current
|
|
Base Salary
|
|
Compensation for the level of responsibility, experience, skills, and sustained individual performance.
|
|
Fixed compensation is not subject to financial
performance risk;
Benchmarked to the median range of the peer group to ensure the
ability to compete for highly talented leadership;
Individual compensation can vary
above or below the market reference point based on such factors as performance, skills, experience and scope of the role relative to internal and external peers.
|
Short-Term
|
|
Corporate Performance Bonus
|
|
Supports annual operating and financial performance, based on defined performance metrics.
|
|
Annual cash award which ranges from
0-200%
of target based on:
CPB EBITDA (earnings);
Cash Sustaining Cost;
Health and Safety;
Project execution and cost;
Reserve and resource additions; and
Sustainability.
|
|
Personal Bonus
|
|
Rewards the achievement of individual objectives designed to support current initiatives, long-term sustainability and Company performance.
|
|
Annual cash award based on stated individual measures and objectives, which are calibrated by
management and approved in advance by the LDCC.
|
Long-Term
|
|
Performance-Leveraged Stock Units
|
|
Incentive to outperform peer group stock price performance and to make Newmont the preferred gold stock; aligns pay with stockholder interests and
long-term stock price performance.
|
|
Awards are based on absolute stock price growth and relative stock price performance against the PSU
peer group (described later in this CD&A), over a three-year period, and are settled in shares of Company stock at the end of the three years.
|
|
Restricted Stock Units
|
|
Long-term shareholder alignment and employee retention.
|
|
Minority portion of LTI
(one-third
of LTI value) for senior executives;
Awards vest over three-year period;
Provides a strong retention and stock-price linkage for eligible employees.
|
40
Newmont Mining Corporation 2017 Proxy Statement
Process for Determining Target Total Compensation.
We consider a variety of factors when
determining target Officer compensation to ensure we have a comprehensive understanding of alignment to goals, reasonableness of pay, internal equity,
pay-for-performance,
and ability to attract and retain executive talent. The primary items considered when making executive compensation determinations are discussed
below and include:
|
|
|
Factors
|
|
Purpose/Key Considerations
|
Market Information
|
|
To ensure reasonableness of pay relative to industry peers.
|
Performance and Leadership
|
|
To understand important performance and leadership context, such as: Experience, skills and scope of
responsibilities; Individual performance; Company performance; and Succession Planning.
|
Pay Mix
|
|
To ensure pay
at-risk
is consistent with
philosophy and comparator group practices; a significant majority of pay should be
at-risk.
|
Pay Equity
|
|
To understand whether internal pay differences are reasonable between executives and consistent with
market practice.
|
Total Compensation
|
|
To understand the purpose and amount of each pay component as well as the sum of all compensation
elements in order to gauge the reasonableness and the total potential expense.
|
Chief Executive Officer and other Officer
compensation versus
Total Shareholder Return
(Pay-for-Performance
Charts)
|
|
To ensure that pay is aligned with performance and set appropriately given industry performance and
pay rates.
|
Performance Sensitivity Analysis
|
|
To understand potential payments assuming various Company performance outcomes; understand how
potential performance extremes are reflected in pay; a component of our compensation risk assessment.
|
Competitive Considerations (Market Information)
Peer Group Determination.
We strive to compensate our employees, including our Officers, competitively relative to industry peers. As part of the LDCCs charter and to ensure
the reasonableness and competitiveness of Newmonts position in the industry, the LDCC regularly evaluates Newmonts peer group with the aid of its independent consultant, Cook & Co., and with input from management. As noted
above, peer groups are used in the compensation benchmarking process as one input in helping to determine appropriate pay levels. When reviewing the appropriateness of a peer group, the LDCCs analysis includes a review of information regarding
each potential peer companys industry, complexity of their business and organizational size, including revenue, net income, total assets, market capitalization and number of employees. This approach ensures a reasonable basis of comparison.
2016 Peer Group.
The LDCC completed a comprehensive review of the peer group for 2015 and no additional changes were made for 2016. The
peer group is structured to ensure it is a valid representation of Newmonts business and operating environment. Given this, the peer group is weighted towards Newmonts core business of mining (gold and global diversified companies, in
particular), with a lesser emphasis on Oil & Gas (similar operations and commodity-based businesses) and Engineering, Procurement and Construction (similar to Newmonts project development group). The LDCC regularly reviews the peer
group with the assistance of the Committees consultant and management. The following peer group, retained from 2015, was used as the reference point to determine the competitiveness of Newmonts pay for 2016:
|
|
|
Alcoa Corporation
|
|
Freeport-McMoran Copper and Gold
Inc.
|
Anglo American
|
|
Goldcorp Inc.
|
Apache Corporation
|
|
Kinross Gold Corporation
|
Barrick Gold Corporation
|
|
The Mosaic Company
|
Canadian Natural Resources Limited
|
|
Noble Energy, Inc.
|
CONSOL Energy Inc.
|
|
Peabody Energy Corporation
|
Devon Energy Corporation
|
|
Rio Tinto plc.
|
EOG Resources, Inc.
|
|
Teck Resources Limited
|
First Quantum Minerals Ltd.
|
|
United States Steel Corporation
|
Newmont Mining
Corporation 2017 Proxy Statement
41
Newmonts ranking within the peer group is consistent with benchmarking standards and generally ranks at or near
the median on key scope metrics, as indicated below. Relative positioning will vary over time based on commodity and market price changes, as well as annual business operations. Based on industry, company scope and the longer-term view on
comparative metrics, the LDCC has validated this list to be appropriate for benchmarking purposes.
(1)
|
Market Cap and Employee data is reflected as of December 31, 2016. Other market statistics reflect trailing twelve months (Q4 2015 and
Q1-Q3
2016) for: Newmont, EOG Resources, Canadian Natural Resources, Apache Corporation, Anglo American, First Quantum and Peabody. Trailing twelve month data for remaining peers are for fiscal year ending December
31, 2016.
|
Newmonts peer group may differ from the peer groups used by proxy advisory services; the LDCC believes Newmonts
peer group appropriately represents the relevant industry comparators and companies where Newmont competes for talent.
2017 Peer Group.
During 2016, in preparation for 2017 compensation planning, the LDCC completed a comprehensive review of the peer group to ensure the reference companies continue to represent a valid point of comparison based on the industry and Newmonts
business model. As criteria to improve the peer group, the LDCC sought to:
|
|
|
continue emphasis on mining and related extractive industries (i.e. oil and gas),
|
|
|
|
continue focus on U.S.-based companies to minimize volatility due to foreign exchange and differences in local laws and practices,
|
|
|
|
address situations where material changes in corporate structure have taken place,
|
|
|
|
include a review of Say on Pay results of peer companies to ensure the peer group represents companies with pay practices that have majority support by
stockholders.
|
Based on this review, the LDCC removed two companies and added two companies to the peer group. The peer group for 2017
includes:
|
|
|
Alcoa Corporation
|
|
Freeport-McMoran Copper and Gold
Inc.
|
Anadarko Petroleum Corporation
(added)
|
|
Goldcorp Inc.
|
Anglo American
|
|
Kinross Gold Corporation
|
Apache Corporation
|
|
The Mosaic Company
|
Barrick Gold Corporation
|
|
Noble Energy, Inc.
|
Canadian Natural Resources Limited
|
|
Rio Tinto plc.
|
Devon Energy Corporation
|
|
Teck Resources Limited
|
EOG Resources, Inc.
|
|
United States Steel Corporation
|
First Quantum Minerals Ltd.
|
|
Vulcan Materials Company (added)
|
Companies that were removed from the peer group include CONSOL Energy Inc. and Peabody Energy Corporation.
42
Newmont Mining Corporation 2017 Proxy Statement
Positioning of Pay Relative to Peers for 2016.
For 2016 compensation, the LDCC determined that the
appropriate benchmarking reference is a median range, and that actual compensation may be above or below the median range depending on the Companys performance and other factors described in this section.
Material Differences Among Officers.
The targets for salary and incentive compensation vary among Newmonts Officers in an effort to reflect
differences in job responsibilities and industry pay levels. This aims to avoid setting amounts that may be above or below market pay levels as would be the case if a one size fits all approach were used. Specifically for the Chief
Executive Officer, the target percentage for each incentive compensation component is greater than the other Officers due to his position as the top executive of the Company, commensurate with the level of accountability and degree of impact that
this executive can have on overall business results and strategy.
Other Factors Used to Determine Compensation
Effect of Individual Performance.
The LDCC takes into consideration a variety of elements, such as the Officers skill set,
individual achievements and role with Newmont during the relevant fiscal year. Additionally, an assessment of each Officers progress against his or her Personal Objectives (discussed later in this CD&A) is completed by the LDCC based on
input provided by the Chief Executive Officer. The LDCC ultimately makes the compensation decisions for all of the Officers, including recommendations to the full Board for the Chief Executive Officer, based on the LDCC members own collective
experience and business judgment.
Effect of Compensation Previously Received on Future Pay Decisions.
We consider actual compensation
received in determining whether our compensation programs are meeting their
pay-for-performance
and retention objectives. Adjustments to future awards may be considered
based on results. However, the LDCC generally does not adjust compensation program targets based on compensation received in the past to avoid creating a disincentive for exceptional performance or providing compensation not aligned with our plans.
Newmont Mining
Corporation 2017 Proxy Statement
43
2016 Compensation
While the amount of compensation may differ among our Officers, the compensation policies are generally the same for each of our Officers, including our Chief
Executive Officer. In this section, we discuss the LDCCs considerations with respect to each element of compensation paid in 2016.
2016
Compensation Program Changes.
Each year the LDCC holds a planning meeting outside of the regular Board of Directors meeting schedule to review executive compensation and talent management programs, as well as feedback received during the
stockholder engagement cycle (including input from stockholders, proxy advisory services, and the results of the Companys annual Say on Pay vote). The LDCC discusses current and future business objectives to determine whether adjustments
should be considered to improve the alignment of pay and performance. Based on this review and subsequent discussions on proposed plan design revisions, the following plan changes were implemented for 2016.
|
|
|
|
|
Program
|
|
What Changed
|
|
Why
|
Corporate
Performance
Bonus
|
|
Added new Sustainability metrics, including reputation, as measured by the Dow Jones Sustainability Index (DJSI) World ranking, and performance against
public targets for water management, closure and reclamation, and resolution of complaints and grievances.
|
|
The addition of Sustainability objectives supports
Newmonts values and relays the principles of how we operate and engage with the communities in which we work. Newmonts reputation and access to land, resources, and approvals is critical to the achievement of the Companys business
plan and strategy.
DJSI World ranking was selected as the best measure of reputation
as it is one of the most rigorous and reputable sustainability indices and provides stakeholders with an independent, measurable and comparative analysis of our performance in areas that matter most to stakeholders.
|
|
|
Added a Health Risk Management metric in support of Newmonts goal to further protect the health of our employees, which includes providing
support to improve their wellness. This metric focuses on the identification of work-related health risks and the implementation of enhanced controls to mitigate risks.
|
|
The inclusion of the Health Risk Management metric reinforces the importance of protecting the
health of our employees and supports our objective of achieving leading health and safety performance.
|
|
|
Adjusted the weightings of several metrics:
Corporate Performance Bonus (CPB) EBITDA weighting increased from 20% to 30%;
Cash Sustaining Costs per Gold Equivalent Ounce (CSC per GEO)
(1)
weighting decreased from 40% to 30%; and
Reserves and Resources weighting decreased from 10% to 5% to incorporate the addition of Sustainability metrics at 5%.
|
|
The increased weighting of CPB EBITDA (with a commensurate decrease in weighting of CSC per GEO) was
made to further increase the focus on delivering value to stockholders. Other metric weighting changes were made to drive further alignment with the 2016 business plan and strategy.
|
Long-Term Incentives
|
|
The Long-Term Incentive program was reviewed by the LDCC and the decision was made to retain the current
program structure. Changes were previously made to the Long-Term Incentive program in 2015 as disclosed in the prior proxy statement.
|
|
The current Long-Term Incentive program structure drives long-term performance aligned with
stockholder interests.
|
(1)
|
CSC per GEO is calculated by dividing Cash Sustaining Costs (CSC) by GEO. CSC is calculated by adding back non-cash changes in inventory and stockpile and leach
pad inventory adjustments to AISC (See Annex A for AISC). GEO is gold equivalent ounce; determined by converting copper production into a gold equivalent for an overall measure of production efficiency
|
Introduction: Executive Transitions during 2016.
As noted in the executive summary, planful leadership transitions in both Operations and Finance
leadership in 2016 maintained the strength of Newmonts Executive Leadership Team (ELT) and positions Newmonts leadership to continue its work toward delivering on the Companys strategy. Following is a summary of Named
Executive Officers who joined Newmont or transitioned roles in 2016. See the Summary Compensation Table for complete 2016 compensation details for each Named Executive Officer.
|
|
Thomas Palmer, Executive Vice President and Chief Operating Officer
, promoted to this role effective May 1, 2016, as part of a planned succession
from Chris Robison who retired from Newmont in May 2016. Prior to
|
44
Newmont Mining Corporation 2017 Proxy Statement
|
this role, Mr. Palmer successfully led operations for the Asia Pacific region as the Regional Senior Vice President. Prior to joining Newmont in March 2014 as the Regional Senior Vice
President, Indonesia, Mr. Palmer was the Chief Operating Officer, Pilbara Mines at Rio Tinto Iron Ore.
|
|
|
|
Promotion compensation
: Mr. Palmer received an increase in salary, short-term incentives target (target of 75% of base salary for 2016 and a target
of 125% for 2017 forward) and long-term incentive targets commensurate with the scope of the role as described later in this CD&A. Mr. Palmer also received a relocation bonus of $650,000 in 2016.
|
|
|
Nancy Buese, Executive Vice President and Chief Financial Officer,
hired in October 2016. Ms. Buese took over the duties of the Chief Financial
Officer from Laurie Brlas as part of a planned transition. Ms. Buese is an accomplished finance leader with extensive experience in the natural resources sector. In her role as Chief Financial Officer at Newmont, Ms. Buese is responsible
for Newmonts global finance, accounting, business planning, tax, treasury, investor relations and value assurance functions. Internal Audit continues to report directly to the Chair of the Audit Committee of our Board of Directors, and reports
administratively to Ms. Buese.
|
|
|
|
New Hire compensation:
In addition to the salary, short-term incentive and long-term incentive components described later in this section, Ms. Buese
received a
sign-on
bonus in consideration for compensation forfeited from her prior employer as a result of joining Newmont in the amount of (i) $600,000; (ii) a grant of restricted stock units of
$2.6 million, of which $0.7 million will vest in one year and $1.9 million will vest in two years; and (iii) a bonus service credit entitling her to annual short-term incentives for the full 2016 performance period. The
sign-on
bonus requires repayment equal to 1/24th of the full amount for each month of a 24 month period after her hire date if she voluntarily departs Newmont during such period. Additionally, if
Ms.
Buese voluntarily separates employment from the Company prior to the vesting of the restricted stock unit grants in (ii) above, the units are canceled.
|
|
|
Randy Engel, Executive Vice President, Strategic Development
, who has served in this capacity since 2008, remains in this role.
|
|
|
Stephen Gottesfeld, Executive Vice President and General Counsel
, who has served in this capacity since 2013, remains in this role.
|
Former executives of Newmont discussed in this section include:
|
|
Laurie Brlas, Former Executive Vice President and Chief Financial Officer
, departed Newmont in December of 2016 after a structured transition with
Ms. Buese.
|
|
|
|
Severance compensation
: Ms. Brlas received severance compensation in accordance with the terms of the Executive Severance Plan of Newmont and
pursuant to the severance terms in the Senior Executive Compensation Program with respect to Performance-Leveraged Stock Units, and applicable stock award agreements with respect to Restricted Stock Units. Please reference the All Other
Compensation column of the Summary Compensation Table for payments made under the Executive Severance Plan of Newmont.
|
2016
Company and Individual Results.
This section provides a summary of the Company and individual results, and corresponding compensation for the Named
Executive Officers.
Base Salary.
The LDCC considered the compensation levels of comparable positions in the market data to help
determine a reasonable base salary range, but also considered individual performance, tenure and experience, the overall Company performance, any retention concerns, individual historical compensation and input from other Board members. While the
LDCC has not adopted a policy with regard to the internal relationship of compensation among the Officers or other employees, this relationship is reviewed and discussed when the LDCC determines total compensation for our Officers.
Mr.
Goldberg
: Based on Newmonts strong sustained operating performance since assuming the role of Chief
Executive Officer in 2013, Mr. Goldberg received a 13% increase in base salary for 2016, positioning Mr. Goldbergs base salary between the median and 65
th
percentile of the compensation peer group. Mr. Goldbergs performance and corresponding compensation are covered
further in the Personal Bonus and Long-Term Equity Incentive Compensation sections.
(Mr.
Goldberg did not receive an increase for 2017).
Mr.
Engel
: Mr. Engel received a 2.3% base salary increase for his performance in 2016 to ensure continued competitiveness relative to market.
Newmont Mining
Corporation 2017 Proxy Statement
45
Mr.
Gottesfeld
: Mr. Gottesfeld received a 3% base salary increase for his performance
in 2016 to ensure continued competitiveness relative to market.
Base salaries for 2016 were set as follows based on the criteria noted above.
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
2015 Base
Salary
|
|
|
2016 Base
Salary
|
|
|
Change
|
|
Gary Goldberg
|
|
|
$1,150,000
|
|
|
|
$1,300,000
|
|
|
|
13
|
%
|
Nancy Buese
(1)
|
|
|
n/a
|
|
|
|
$675,000
|
|
|
|
|
|
Randy Engel
|
|
|
$615,825
|
|
|
|
$630,000
|
|
|
|
2.3
|
%
|
Stephen Gottesfeld
|
|
|
$500,000
|
|
|
|
$515,000
|
|
|
|
3
|
%
|
Thomas Palmer
(2)
|
|
|
n/a
|
|
|
|
$750,000
|
|
|
|
|
|
Laurie Brlas
(3)
|
|
|
$700,000
|
|
|
|
$700,000
|
|
|
|
|
|
(1)
|
Ms. Buese was hired in 2016 and therefore did not have a 2015 salary comparison.
Actual salary received, as noted in the Summary Compensation Table, was prorated for the time of employment.
|
(2)
|
Mr. Palmer was promoted to the role of Executive Vice President and Chief
Operating Officer in February 2016. Upon promotion to the role, Mr. Palmer received a base salary adjustment to the amount noted above for 2016 to reflect the change in responsibilities from his prior role of Regional Senior Vice President,
Asia Pacific Region. Actual salary received, as noted in the Summary Compensation Table, was prorated for the time in each role in 2016.
|
(3)
|
Ms. Brlas separated employment with Newmont on December 31, 2016, and did not receive a base salary increase in 2016.
|
Short-Term
Non-Equity
Incentive Compensation.
Short-Term Incentive Compensation Highlights:
|
|
|
Comprised of two components:
|
|
|
|
Corporate Performance Bonus (70% of the total short-term incentive opportunity); and
|
|
|
|
Personal Bonus (30% of the total short-term incentive opportunity).
|
2016 SHORT-TERM INCENTIVE TARGETS
|
|
|
|
|
|
|
Name
|
|
Target Corporate Performance
Bonus as a Percentage of
Base Salary (A)
|
|
Target Personal Bonus as a
Percentage of Salary (B)
|
|
Total as a Percentage of Base
Salary (A+B)
|
Gary Goldberg
|
|
105%
|
|
45%
|
|
150%
|
Nancy Buese
|
|
70%
|
|
30%
|
|
100%
|
Randy Engel
|
|
63%
|
|
27%
|
|
90%
|
Stephen Gottesfeld
|
|
59.5%
|
|
25.5%
|
|
85%
|
Thomas Palmer
(1
)
|
|
52.5%
|
|
22.5%
|
|
75%
|
Laurie Brlas
|
|
70%
|
|
30%
|
|
100%
|
(1)
|
Mr. Palmers short-term incentive target for 2016 was 75% and will adjust to 125% of base salary commensurate with his new role of Chief Operating
Officer for 2017 forward.
|
Corporate Performance Bonus (70% of short-term incentives).
Corporate Performance Bonus Summary:
|
|
|
Payment based on overall corporate performance results which include annual financial and operational targets based on key business objectives;
|
|
|
|
Payment ranges from
0-200%
of target corporate performance;
|
|
|
|
All seven measures performed above target levels in 2016; and
|
|
|
|
Weighted performance resulted in an award of 138.4% of target payment for 2016.
|
The Corporate Performance Bonus provides an annual reward based on seven measures designed to balance short-term and long-term factors, business performance and successful investment in and development of Company
assets. The LDCC reviews and approves the performance metrics and target levels of performance annually to ensure metrics are well aligned to deliver shareholder value. The amounts of 2016 Corporate
46
Newmont Mining Corporation 2017 Proxy Statement
Performance Bonuses earned by the Officers are shown in the
Non-Equity
Incentive Plan Compensation column of the Summary Compensation Table. The measures
that the LDCC established for 2016 are listed below.
2016 Corporate Performance Bonus.
The Companys focus on safety, profitability,
growth, and sustainability set the overall theme of the Corporate Performance Bonus plan. See 2016 Compensation Program Changes for more detail on the changes implemented for the 2016 program.
The components of the 2016 Corporate Performance Bonus are as follows:
|
|
|
|
|
|
|
Corporate Performance
Bonus Measure
|
|
What It Is
|
|
Why It Is Used
|
|
|
Health and Safety
|
|
Measures both leading and lagging indicators to ensure we continuously improve our health and safety results.
|
|
Safety is a core value and Newmonts highest priority. The Health and Safety measures support the strategic objectives of developing a Culture of
Zero Harm and achieving industry leading health and safety performance.
|
|
|
CPB EBITDA
|
|
Measures
pre-tax
cash income or earnings from Newmonts operations. It also serves as a proxy for cash
flow from operations as it excludes payments for income taxes and financing. See Annex A for the detailed definition of this
non-GAAP
compensation measure and adjustments.
|
|
CPB EBITDA is an important profitability metric reflective of our financial operating results. It aligns with our focus on delivering value to
shareholders.
|
|
|
Cash Sustaining Cost
|
|
Measures the total production and early stage cost per gold equivalent ounce, including G&A, sustaining capital and other key operating expense
items, excluding impact of
non-cash
write-downs.
|
|
Cost is a key financial metric within employees control and helps to ensure efficiency and accountability to support a value focus for
production. Cost continues to be an important operating metric due to continued volatility in gold price and the mining industry.
|
|
|
Project Execution
|
|
Measures the progress of new key capital projects which are expected to add to Newmonts production portfolio in the short- to medium- term.
Project cost versus budget and development stage advancement are used to measure progress during the year.
|
|
New projects are important for sustaining Newmonts business over the long-term as well as providing the opportunity to grow production
capability.
|
|
|
Reserves and
Resources
(1)
|
|
Measures the reserves potentially available for future mining as well as the mineralization not yet proven to the level required for reserve
reporting.
|
|
The Reserves and Resources metrics promote the long-term sustainability of the business; this includes discovery of new deposits and the successful
completion of the work needed to report new deposits.
|
|
|
Sustainability
|
|
Measures Newmonts reputation, as well as achievement of key strategic Sustainability and External Relations objectives relating to access to
land, resources and approvals.
|
|
Sustainability is a core value for Newmont. We are focused on delivering sustainable value for our people, stakeholders and host
communities.
|
(1)
|
Reserves and Resources are measured separately, resulting in a total of seven
measures.
|
Target Setting Process and Calculation of Corporate Performance Bonuses.
The 2016 Corporate Performance
Bonus targets were a mix of demanding financial, production, and growth objectives derived from the annual business planning process. It is the LDCCs perspective that the target should be challenging, yet achievable, and the 2016 targets are
structured accordingly.
Using the annual business plan as the foundation for target setting, a rigorous process is completed annually to ensure the
level of difficulty for the bonus plan targets and ranges are deemed to be reasonably challenging. Key components of the process include:
Newmont Mining
Corporation 2017 Proxy Statement
47
Leveraging the above process, performance targets for the 2016 bonus plan were thoroughly reviewed to ensure
meaningful performance objectives were established, as summarized here:
|
|
|
|
|
Corporate Performance
Bonus Measure
|
|
Change in Targets from 2015 to 2016
|
|
Approach and Rationale
|
Health and Safety
|
|
TRIFR target achievement for 2016 was set as a 10% reduction from the best demonstrated performance (requiring higher performance than
the 2015 target).
Target achievement for the completion of Critical Control Audits
increased from 90% to 100%.
|
|
In 2015, our safety result was the highest in the Companys history and among the highest in the ICMM. The 10% reduction in best
demonstrated performance continues to drive focus on further reducing injury rates.
2015 achievement of Critical Control audits was at 97%. The increase in target for 2016 was intended to drive continuous improvement in our safety results.
|
|
|
For the new health risk management metric, a baseline of key health risks was established through a health risk assessment process
completed in 2015, which included identifying work-related health risks and developing alternative actions/controls to mitigate risks. While the Company had existing mitigation actions in place, the goal is to consider alternative mitigation
controls, for instance reduction of ambient dust by equipment controls, rather than personal protective equipment. Target achievement was set as a 10% reduction in health risks from the established baseline.
|
CPB EBITDA
|
|
Target achievement for 2016 was consistent with 2015, utilizing the respective business plan for target achievement.
|
|
To determine the payout range, a statistical analysis based on historical performance was conducted; results of the analysis were then reviewed by
internal experts and adjusted as appropriate based on an understanding of the operating environment. For 2016, the performance for maximum payout increased from 16.5% to 23.9%.
|
Cash Sustaining Cost
|
|
Target achievement for 2016 was a 10% cost improvement over the 2015 target.
|
|
The same process as noted with CPB EBITDA was used to determine the range of payout; based on the review, performance required for maximum payout
increased by 35% (the performance for maximum payout increased from 10% overachievement to 13.5%).
|
Project Execution
|
|
Company projects (as well as the phase of
on-going
projects) vary
year-to-year;
therefore,
year-to-year
comparisons may not be valid. However, targets and ranges for these measures are based on
business plan targets and incorporate probability models of achievement to ensure the objectives are deemed to be sufficiently challenging.
|
Reserves and Resources
|
|
Exploration investment decisions for reserves and resources vary
year-to-year;
therefore,
year-to-year
comparisons may not be valid. However, targets and
ranges for these measures are based on business plan targets and incorporate probability models of achievement to ensure the objectives are deemed to be sufficiently challenging.
|
Sustainability
|
|
Targets and ranges for reputation (DJSI World ranking) were based on Newmonts target
position, historical performance and assessment of acceptable performance.
For
public target completion (water management, closure and reclamation, and complaints and grievances), targets and ranges are based on assessment of acceptable performance for the first year of this metric. In future years, targets will be based on
year-over-year improvement based on a reduction on best demonstrated performance.
|
If the Company achieves its targeted performance for each of the metrics, the payout percentage for the Corporate Performance Bonus
is 100%. If the minimum amounts are not achieved for a particular metric (the threshold), no Corporate Performance Bonus is payable for that metric. For performance between the threshold and maximum for any metric, the amount is prorated to result
in a payout percentage between 20% and a maximum of 200%.
48
Newmont Mining Corporation 2017 Proxy Statement
2016 CORPORATE PERFORMANCE BONUS METRICS AND SUMMARY OF RESULTS
Newmonts operating performance for 2016 exceeded plan and in most cases, prior year performance. In reviewing the performance results
and corresponding bonus plan payments, the LDCC also considered the business benefits of achieving above-target performance relative to the resulting additional bonus funding from the above-target performance (a form of
return-on-investment,
or ROI, perspective). The LDCC concluded that the bonus amount resulting from the performance above target was aligned with performance as
business results from this performance exceeded the incremental bonus plan funding (a summary of this is illustrated in the table Description of Above Target Achievement for the Corporate Performance Bonus and Corresponding Bonus Plan
Funding provided in the Executive Summary).
The structure of the Corporate Performance Bonus structure as well as the performance and bonus
results for 2016 are provided in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus
Structure
|
|
Bonus Payment Range
|
|
2016
Results
|
Performance
Metric
|
|
Measure/
Unit
|
|
Weighting
|
|
Minimum
(20%)
|
|
Target
(100%)
|
|
Maximum
(200%)
|
|
2016
Performance
|
|
Performance
Percentage
|
|
Payout
Percentage
(1)
|
Health and Safety
|
|
Leading /
Lagging
|
|
20%
|
|
Details provided below
|
|
Above Target
|
|
114.0%
|
|
22.8%
|
CPB EBITDA
|
|
$M
|
|
30%
|
|
$1,567
|
|
$2,059
|
|
$2,551
|
|
$2,321
(2)
;
Above Target
|
|
153.2%
|
|
26.0%
|
Cash Sustaining Cost
|
|
cost/
GEO
(3)
|
|
30%
|
|
$948
|
|
$879
|
|
$760
|
|
$841;
Above
Target
|
|
131.9%
|
|
39.6%
|
Project Execution
|
|
Milestone/
Cost
|
|
10%
|
|
Details provided below
|
|
Above Target
|
|
135.1%
|
|
13.5%
|
Reserves
|
|
Moz
|
|
2.5%
|
|
0.9
|
|
2.5
|
|
CD
(4)
|
|
4.0
(5)
;
Above Target
|
|
137.9%
|
|
3.4%
|
Resources
|
|
Moz
|
|
2.5%
|
|
1.9
|
|
2.5
|
|
CC
(4)
|
|
4.9
(5)
;
Above Target
|
|
160.7%
|
|
4.0%
|
Sustainability
|
|
DJSI; public
targets
|
|
5%
|
|
Details provided below
|
|
Above Target
|
|
182.7%
|
|
9.1%
|
Total Result =
|
|
138.4%
|
(1)
|
Calculated by multiplying Weighting x Performance Percentage.
|
(2)
|
Company performance against CPB EBITDA was 200%; however, the Committee exercised its
discretion to reduce the CPB EBITDA performance by including components of certain 2016 impairments.
|
(3)
|
GEO is Gold Equivalent Ounce; determined by converting copper production into a gold equivalent for an overall measure of production efficiency.
|
(4)
|
CD is cover depletion; CC is cover conversion.
|
(5)
|
Reserves and Resources performance includes revisions.
|
Summary of the Health and Safety metrics for 2016
:
Our Corporate Performance Bonus includes two categories of performance measures. First are
leading indicator metrics which aim to identify and remediate potential health and safety risks, and further embed a culture of zero harm. The second is a lagging indicator safety metric to measure the results of our continuous improvement efforts
and ensure our actions are improving safety performance.
In 2016, our Total Recordable Injury Frequency Rate (TRIFR) was steady at 0.32. The loss of
hours worked due to the Batu Hijau divestiture impacted this data for 2016. This performance is still among the best of all International Council on Mining and Metals (ICMM) member companies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus
Structure
|
|
Bonus Payment Range
|
|
2016
Results
|
Safety Metric & Purpose
|
|
Weighting
|
|
Minimum
(20%)
|
|
Target
(100%)
|
|
Maximum
(200%)
|
|
2016
Performance
|
|
Performance
Percentage
|
|
Payout
Percentage
(1)
|
Fatality Risk Management: Completion of Critical Control Audits
Percent of layered audits of critical control management plans completed against plan
|
|
3%
|
|
80%
|
|
90%
|
|
100%
|
|
98%
|
|
180%
|
|
5.4%
|
Fatality Risk Management: Effectiveness of Critical Controls
Assessment of effectiveness of behaviors, processes, and equipment; verification that controls are operating as designed
|
|
3%
|
|
60%
|
|
75%
|
|
90%
|
|
82%
|
|
147%
|
|
4.4%
|
Newmont Mining
Corporation 2017 Proxy Statement
49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus
Structure
|
|
Bonus Payment Range
|
|
2016
Results
|
Safety Metric & Purpose
|
|
Weighting
|
|
Minimum
(20%)
|
|
Target
(100%)
|
|
Maximum
(200%)
|
|
2016
Performance
|
|
Performance
Percentage
|
|
Payout
Percentage
(1)
|
Fatality Risk Management: Progression toward ownership and integration
Qualitative assessment of workforce engagement to further embed critical controls and drive fatality prevention
|
|
3%
|
|
20%
|
|
100%
|
|
200%
|
|
100%
|
|
100%
|
|
3.0%
|
Health Risk Management
Reduction of work-related health risks through the implementation of controls required to prevent or minimize these risks
|
|
3%
|
|
5%
|
|
10%
|
|
20%
|
|
16%
|
|
162%
|
|
4.9%
|
TRIFR
:
Reduce Total Reportable Injury Frequency Rate (TRIFR) by 10% from best demonstrated performance
(% reduced)
|
|
8%
|
|
0.35
|
|
0.30
(2)
|
|
0.23
|
|
0.32
|
|
64%
|
|
5.1%
|
Total Result
|
|
20%
|
|
|
|
|
|
|
|
|
|
114%
|
|
22.8%
|
(1)
|
Calculated by multiplying Weighting x Performance Percentage.
|
(2)
|
Target adjusted for Batu Hijau divestiture.
|
Summary of the Project Execution metric for 2016
:
The project execution metric is an objective, results-based measure of project performance.
For major projects that are planned to move into operation, we measure project spend versus budget and expected production. For projects that remain in the study phase, we measure performance based on how the projects are progressing through our
investment decision process (or progress against schedule). The results and corresponding payment are audited by the Companys internal audit department. For 2016, the total project performance yielded a score of 135.1% as noted in the table
below.
|
|
|
|
|
|
|
|
|
Project Execution Elements
|
|
Factor
Weighting
|
|
|
Performance
Percentage
|
|
Merian
|
|
|
32
|
%
|
|
|
150.0
|
%
|
Long Canyon
|
|
|
18
|
%
|
|
|
196.2
|
%
|
Cripple Creek and Victor Expansion
|
|
|
16
|
%
|
|
|
200.0
|
%
|
Tanami Expansion
|
|
|
14
|
%
|
|
|
100.4
|
%
|
Project Advancement
|
|
|
20
|
%
|
|
|
28.9
|
%
|
|
|
Total Achievement
|
|
|
100
|
%
|
|
|
135.1
|
%
|
Summary of the Sustainability metric for 2016
:
Our Sustainability metrics are comprised of reputation, as
measured by Dow Jones Sustainability Index (DJSI) World rating and performance against public targets in the areas of water management, closure and reclamation, and complaints and grievances. See 2016 Compensation Program changes for
additional details on the inclusion of Sustainability metrics into our Corporate Performance Bonus for 2016.
Newmont was named the mining
industrys overall leader in sustainability by DJSI World for the second year in a row. Newmont will continue to focus on improving our safety, economic and social performance so that Newmont remains an industry leader and is well positioned
for long-term success.
Newmont communicates public targets annually for key areas such as water management, closure and reclamation and complaints and
grievances in order to provide transparency to our external stakeholders around our sustainability commitments. In 2016, most sites met or exceeded the public targets for water management and closure and reclamation, and all sites exceeded the
public targets set for complaints and grievances.
50
Newmont Mining Corporation 2017 Proxy Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus
Structure
|
|
Bonus Payment Range
|
|
2016
Results
|
Sustainability
Metric & Purpose
|
|
Weighting
|
|
Minimum
(20%)
|
|
Target
(100%)
|
|
Maximum
(200%)
|
|
2016
Performance
|
|
Performance
Percentage
|
|
Payout
Percentage
(1)
|
Reputation (Dow Jones Sustainability World Index (DJSI World rating):
External benchmark; Independent, measurable and comparative analysis of our sustainability practices
|
|
2%
|
|
Above the
average
score of the
industry
group
|
|
Silver Class
= Within 1-5%
of Industry
Leader score
|
|
Gold
Class and
Industry
Leader
|
|
Gold
Class and
Industry
Leader
|
|
200%
|
|
4%
|
Water Management:
Completion of implementation of Water Strategy action plans.
Roll-up
of results by region/site.
|
|
1%
|
|
80%
completion
|
|
100%
completion by
Dec. 31, 2016
|
|
100%
completion by
Sept. 30, 2016
|
|
Most sites
above target
|
|
133%
|
|
1.3%
|
Closure and Reclamation:
Percentage completion of planned reclamation acres.
Roll-up
of results by region/site.
|
|
1%
|
|
70%
completion
|
|
80%
completion
|
|
90%
completion
|
|
Most sites
above target
|
|
180%
|
|
1.8%
|
Complaints and Grievances:
Completion of Tier 1 complaints and grievances closed within 30 days.
Roll-up
of results by region/site.
|
|
1%
|
|
87%
|
|
90%
|
|
93%
|
|
100%
|
|
200%
|
|
2%
|
Total
Result
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9.1%
|
(1)
|
Calculated by multiplying Weighting x Performance Percentage.
|
Corporate Performance Bonus Payments.
To calculate the Corporate Performance Bonus percentage for each of the Officers, the
respective target percentage of eligible earnings (i.e., prorated salary) was multiplied by 138.4% to determine the actual value of the bonus. The amount of the Corporate Performance Bonus paid to the Officers is also reflected in the
Non-Equity
Incentive Plan column of the Summary Compensation Table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
2016
Eligible
Earnings
(A)
|
|
|
Target
Payout
(%) (B)
|
|
|
Company
Performance
% (C)
|
|
|
2016
Payout
(A*B*C)
|
|
Gary Goldberg
(1)
|
|
|
$1,270,742
|
|
|
|
105.0
|
%
|
|
|
138.4
|
%
|
|
|
$1,846,642
|
|
Nancy Buese
(2)
|
|
|
$90,865
|
|
|
|
70.0
|
%
|
|
|
138.4
|
%
|
|
|
$88,030
|
|
Randy Engel
(1)
|
|
|
$627,196
|
|
|
|
63.0
|
%
|
|
|
138.4
|
%
|
|
|
$546,865
|
|
Stephen Gottesfeld
(1)
|
|
|
$512,074
|
|
|
|
59.5
|
%
|
|
|
138.4
|
%
|
|
|
$421,683
|
|
Thomas Palmer
(3)
|
|
|
$623,230
|
|
|
|
52.5
|
%
|
|
|
144.5
|
%
|
|
|
$472,798
|
|
Laurie Brlas
(4)
|
|
|
$700,000
|
|
|
|
70.0
|
%
|
|
|
138.4
|
%
|
|
|
$678,160
|
|
(1)
|
Messrs. Goldberg, Engel and Gottesfeld received a salary increase during 2016 and
therefore, eligible earnings differ from annual base salary.
|
(2)
|
For 2016 only, based on the terms of her offer letter, in recognition of compensation forfeited from her prior employer as a result of joining Newmont,
Ms. Buese received a Corporate Performance Bonus credit entitling her to annual short-term incentives for the full 2016 performance period. As noted in the Summary Compensation Table, Ms. Buese received $88,030 of
Non-Equity
Incentive Plan Compensation tied to the Corporate Performance Bonus and an additional $565,910 reflected in Bonus to cover the full 2016 performance period. The total of the Corporate Performance Bonus
and additional bonus payout for Ms. Buese based on her offer letter was $653,940.
|
(3)
|
Mr. Palmers Corporate Performance Bonus was prorated for the amount of time in each role at each respective bonus target. Mr. Palmer received a
promotion increase during 2016 and therefore, eligible earnings differ from annual base salary.
|
(4)
|
Ms. Brlas received the full Corporate Performance Bonus based on her employment
through December 31, 2016.
|
Newmont Mining
Corporation 2017 Proxy Statement
51
Personal Bonus (30% of short-term incentives).
Personal Bonus Highlights:
|
|
|
Individualized personal objectives established for each Officer by the LDCC;
|
|
|
|
Objectives are
pre-approved
by the LDCC and the Committee receives a
year-end
performance assessment from the CEO;
|
|
|
|
Payment ranges from
0-200%
of target based on individual performance;
|
|
|
|
Incorporates the leadership areas of strategy, people and organizational development, safety, operational execution and efficiency, corporate sustainability and
financial goals;
|
|
|
|
Objectives may be single or multi-year; and
|
|
|
|
Payments are based on objective results and reasoned business judgment of the LDCC.
|
Purpose of the Personal Bonus
: The purpose of the Personal Bonus is to align personal performance with key individualized objectives that will support
the long-term sustainability and performance of the Company. The personal objectives encompass the broad spectrum of responsibilities inherent in senior leadership roles and, in some cases, may not have immediate or tangible measures. The Personal
Bonus component of the executive compensation program provides for a well-rounded assessment of executive performance, resulting in an improved correlation of pay and performance. Specifically, the program serves to provide the ability to:
|
|
Holistically consider performance against a broad set of strategic, operational, environmental, social, safety and financial business goals;
|
|
|
Incentivize and reward efforts that may be difficult to quantify, but provide long-term stockholder value;
|
|
|
Reward for timely adjustments to business dynamics not anticipated prior to the performance period;
|
|
|
Consider the multitude of complex factors that can affect performance inside and outside of managements control for the purpose of assessing performance
and providing appropriate compensation (e.g., economic cycles, market volatility, and fluctuations in commodities prices);
|
|
|
Take an extended long-term perspective ensuring directional alignment of current performance with the vision of the organizations future;
|
|
|
Control the potential risk of
sub-optimized
results due to a focus on set goals which may no longer be a key
priority; and
|
|
|
Differentiate awards based on a broad perspective of an individuals contribution to the Company.
|
Determining the Personal Bonus
: The Personal Bonus is not strictly formulaic given the difficulty in explicitly quantifying the aggregate performance.
Accordingly, payments under this program are awarded based on results subject to the qualified business judgment of the LDCC. The LDCC can award payments out of a total bonus opportunity assigned to each Officer based upon such Officers
overall performance against annual objectives. The LDCC receives a
year-end
performance assessment and recommendation for each of the Officers (except for the Chief Executive Officer) from the Chief Executive
Officer. For the Chief Executive Officer, the Board of Directors determines the Personal Bonus based on his performance against the stated objectives for the year, as well as other factors potentially not contemplated prior to the start of the year.
While the Personal Bonus is based on
pre-established
individual goals, they do not constitute performance measures that result in automatic payout levels. Instead, they provide a context for the Chief
Executive Officer and LDCC to evaluate each Officers performance and contributions to the Companys success when making the bonus payout determinations.
While no single personal objective is either material to an understanding of the Companys compensation policies relating to the Personal Bonus program or dispositive in the LDCCs decisions regarding the
specific payout levels, in determining the awards for 2016 the LDCC considered the accomplishments as described below for each Officer.
52
Newmont Mining Corporation 2017 Proxy Statement
Personal Objectives for the Chief Executive Officer
: Mr. Goldbergs objectives and a summary
of the results for those objectives are listed in the following table. For these achievements, Mr. Goldberg received a 150% Personal Bonus.
|
|
|
Objective
|
|
Summary of Results
|
Key Financial Results
|
|
Achieved $2.4 billion in Adjusted EBITDA
.
(1)
More than doubled free cash flow to $784 million
.
(1)
Reduced debt by $1.3 billion, increased liquidity to nearly $6 billion, and maintained an investment-grade balance sheet.
Paid $67 million in dividends and enhanced the gold price-linked dividend policy for 2017 to provide additional upside to shareholders as gold prices increase.
|
Lead Newmonts Safety Journey to zero harm by focusing on individual behaviors, safety leadership
coaching and operational risk management
|
|
Led actions to embed Newmonts health and safety culture further in the organization; delivered industry leading safety
performance as measured by both leading and lagging indicators.
Newmont had no fatalities in 2016, lowered serious injuries by 75 percent and held
our total injury rate to .32, remaining in the first quartile among ICMM peers.
|
Lead Newmont to safely, responsibly and profitably reach production and cost targets
|
|
Lowered gold
all-in
sustaining costs for the fourth consecutive year to $912 per ounce, or
two percent lower than 2015.
(1)
Increased gold production to 4.9 million ounces on an attributable basis, 7% higher than 2015.
Exceeded efficiency targets by 180%, delivering sustainable cost and efficiency improvements of about $325 million. Significant safety, cost and productivity improvements delivered at Cripple Creek and Victor and KCGM after assuming operating
control.
Delivered cost and efficiency improvements through the outsourcing of select IT, Supply Chain and Finance functions and
strengthened cyber security resources and systems.
|
Lead Newmont to achieve profitable, sustainable growth through cost-effective projects, M&A and
exploration
|
|
Improved portfolio value and risk by selling our Indonesian assets for gross proceeds of $920 million and contingent payments
of $403 million tied to higher copper prices and future development.
Achieved commercial production at Merian on time and $150 million below budget, and
at Long Canyon two months ahead of schedule and $50 million below budget.
Advanced profitable expansions at Cripple Creek & Victor, Tanami and Northwest
Exodus. Failure to secure permits in a timely manner, however, resulted in approval consideration for our Ahafo expansion projects being delayed until the first half of 2017.
Improved share price by 89 percent against an 8 percent increase in gold price.
|
Lead Newmont in building a strong and diverse leadership pipeline across all regions
|
|
Built a strong and increasingly diverse bench of leaders across the portfolio. Supported the smooth transitions of the Chief
Operating Officer, Chief Financial Officer and Board Chair.
Effectively progressed Global Inclusion & Diversity objectives, meeting targets
to improve national representation in leadership ranks and advancing efforts to embed a more inclusive culture. Achieved a perfect score of 100 on the Corporate Equality Index.
Strong employee engagement levels well above the industry benchmark as measured in our Global Employee Survey.
|
Lead Newmont in establishing industry leadership in the areas of social and environmental
responsibility
|
|
Newmont named mining sector sustainability leader by the Dow Jones Sustainability Index for the second consecutive year.
Met external targets to improve complaint resolution, closure and reclamation planning and local content across the portfolio; met water management targets at all but two operations.
Introduced new standards and strategies on artisanal small-scale mining.
Continued progress on closure obligations at Yanacocha.
|
(1)
|
See Annex A for a reconciliation of these
Non-GAAP
metrics.
|
Newmont Mining
Corporation 2017 Proxy Statement
53
Personal Objectives results for the other Officers
: Key accomplishments for each of the other Officers
relative to their Personal Objectives are as follows:
|
|
Nancy Buese
: Ms. Buese received an
at-target
Personal Bonus based on Newmonts approach for employees
recently hired.
|
|
|
Randy Engel
: Mr. Engel significantly improved Newmonts portfolio value and risk profile through the sale of our Indonesian assets, resulting in
gross cash proceeds of $920 million. Mr. Engel also led the ongoing assessment of other potential value accretive transactions in 2016. Mr. Engel strengthened country economic impact study processes in partnership with sustainability
and external relations and continued to actively represent Newmont at key investor events and with key capital markets participants. Based on these accomplishments, Mr. Engel received an above-target Personal Bonus.
|
|
|
Stephen Gottesfeld
: Mr. Gottesfeld provided significant and effective support to the sale of our Indonesian assets, in addition to providing ongoing
support to the evaluation of other potential value accretive transactions. Mr. Gottesfeld continued to provide strong leadership of Newmonts ethics and compliance function. Last, Mr. Gottesfeld effectively supported the transition of
Newmonts Board Chair in 2016. Based on these accomplishments, Mr. Gottesfeld received an above-target Personal Bonus.
|
|
|
Thomas Palmer
: During 2016, Newmont lowered its serious injury rate by 75 percent and maintained among the lowest total injury rates (.32) in the
mining sector with no fatalities. Mr. Palmer positively influenced these results through reinforcing a culture of zero harm, and through his leadership to standardize and verify controls to address top fatality risks globally. Mr. Palmer
delivered strong operational results, increasing gold production and maintaining copper production (excluding Indonesia). Cost and efficiency target improvements were exceeded. Merian and Long Canyon were built on or ahead of schedule and
$200 million below budget both mines were built safely and with smooth and successful commissioning and transitioning to operations. Profitable expansions at Cripple Creek & Victor, Tanami and Northwest Exodus were advanced.
Based on these accomplishments, Mr. Palmer received an above-target Personal Bonus.
|
The LDCC considered Mr. Goldbergs
recommendations, each Officers performance and key accomplishments in determining each Officers Personal Bonus amounts. In alignment with Mr. Goldbergs recommendations, other than for Mr. Goldberg, the Committee adopted and
approved the following amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
2016 Eligible
Earnings
(A)
|
|
|
Target (%)
(B)
|
|
|
Personal
Objectives
Performance
(C)
|
|
|
Payout
(A*B*C)
|
|
|
|
|
|
|
Gary Goldberg
(1)
|
|
|
$1,270,742
|
|
|
|
45.0
|
%
|
|
|
150
|
%
|
|
|
$857,751
|
|
Nancy Buese
(2)
|
|
|
$90,865
|
|
|
|
30
|
%
|
|
|
100
|
%
|
|
|
$27,260
|
|
Randy Engel
(1)
|
|
|
$627,196
|
|
|
|
27
|
%
|
|
|
180
|
%
|
|
|
$304,817
|
|
Stephen Gottesfeld
(1)
|
|
|
$512,074
|
|
|
|
25.5
|
%
|
|
|
115
|
%
|
|
|
$150,166
|
|
Thomas Palmer
(3)
|
|
|
$623,230
|
|
|
|
22.5
|
%
|
|
|
120
|
%
|
|
|
$168,272
|
|
Laurie Brlas
(4)
|
|
|
$700,000
|
|
|
|
30
|
%
|
|
|
100
|
%
|
|
|
$210,000
|
|
(1)
|
Messrs. Goldberg, Engel and Gottesfeld received a salary increase during 2016 and
therefore, eligible earnings differ from annual base salary.
|
(2)
|
Ms. Buese received an
at-target
personal bonus based on her October 2016 hire date. As noted in the Summary
Compensation Table, Ms. Buese received $27,260 of
Non-Equity
Incentive Plan Compensation tied to the Personal Bonus and an additional $175,240 reflected in Bonus to cover the full 2016 performance period.
The total Personal Bonus payout and additional bonus for Ms. Buese based on her offer letter was $202,500.
|
(3)
|
Mr. Palmer received a promotion increase during 2016 and therefore, eligible earnings differ from annual base salary.
|
(4)
|
Ms. Brlas received an
at-target
Personal Bonus in accordance with the terms of the Corporate Performance Bonus
program.
|
54
Newmont Mining Corporation 2017 Proxy Statement
For the year, combining the Corporate Performance Bonus and the Personal Bonus, representing 70% and 30% of the target
annual incentive program respectively, the total annual bonus for the year as a percent of target is displayed in the table below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
2016 Total Actual
Bonus
|
|
|
2016 Total Target
Bonus
|
|
|
Total Bonus as a
% of Target
|
|
Gary Goldberg
|
|
|
$2,704,393
|
|
|
|
$1,906,113
|
|
|
|
141.9
|
%
|
Nancy Buese
(1)
|
|
|
$115,290
|
|
|
|
$90,865
|
|
|
|
126.9
|
%
|
Randy Engel
|
|
|
$851,682
|
|
|
|
$564,477
|
|
|
|
150.9
|
%
|
Stephen
Gottesfeld
|
|
|
$571,849
|
|
|
|
$435,263
|
|
|
|
131.4
|
%
|
Thomas Palmer
|
|
|
$641,070
|
|
|
|
$467,423
|
|
|
|
137.1
|
%
|
Laurie Brlas
|
|
|
$888,160
|
|
|
|
$700,000
|
|
|
|
126.9
|
%
|
(1)
|
For 2016 only, based on the terms of her offer letter, in recognition of compensation
forfeited from her prior employer as a result of joining Newmont, Ms. Buese received a Corporate Performance Bonus credit entitling her to annual short-term incentives for the full 2016 performance period. As noted in the Summary Compensation
Table, Ms. Buese received a total of $115,290 of
Non-Equity
Incentive Plan Compensation tied to the combined Corporate Performance and Personal Bonus and an additional $741,150 reflected in Bonus to cover
the full 2016 performance period. The total of the combined Corporate Performance and Personal Bonus and additional bonus payout for Ms. Buese based on her offer letter was $856,440.
|
Long-Term Equity Incentive Compensation.
Long-Term Equity Incentive Compensation Highlights:
|
|
|
Includes two programs, majority performance-based:
|
|
|
|
Performance Leveraged Stock Units weighted at 67% of the total target long-term incentive award actual value and grant is dependent upon stock
price performance and company TSR performance relative to gold industry peers.
|
|
|
|
Restricted Stock Units weighted at 33% of the total target long-term incentive award value is based upon Newmonts stock price performance.
|
Overview of the Long-Term Equity Incentive Compensation Programs for 2016.
The LDCC reviews the executive
compensation incentive structure annually for potential adjustments to ensure the programs are aligned with the current business environment and compensation principles.
The LTI programs for 2016 include:
|
|
|
|
|
Program Summary
|
|
Performance Leveraged Stock Units (PSU)
|
|
Restricted Stock Units (RSU)
|
Percent of Target
LTI
|
|
Two-thirds
(67%)
|
|
One-third
(33%)
|
Purpose
|
|
Reward for stock price improvement and relative Total Shareholder Return (TSR)
|
|
Link pay directly with share price performance; provide a base level of retention
value
|
Vesting
Structure
|
|
Vests after three years based on performance;
no minimum payout floor
|
|
Vests
one-third
per year over three
years
|
Equity Award Target Values.
The LDCC designed target values of equity incentives for each Officer based upon
competitive market data and the scope of the respective positions. These target values are expressed as a percentage of base salary as follows:
2016
TARGET LONG-TERM EQUITY INCENTIVES
|
|
|
|
|
Name
|
|
% of Base Salary
(1)
|
|
|
|
Gary Goldberg
(2)
|
|
|
550
|
%
|
Nancy Buese
|
|
|
350
|
%
|
Randy Engel
|
|
|
300
|
%
|
Stephen Gottesfeld
|
|
|
270
|
%
|
Thomas Palmer
|
|
|
350
|
%
|
Laurie Brlas
|
|
|
375
|
%
|
(1)
|
LTI target is based on the employees salary as of March 1, 2016.
|
(2)
|
Mr. Goldbergs target long-term equity incentives increased from 478% to
550% as described below.
|
Newmont Mining
Corporation 2017 Proxy Statement
55
Newmonts Policy with Respect to the Granting of Equity Compensation.
The Board has delegated to
the LDCC the authority to grant equity to Officers, except the CEO; Board of Directors approval is required for CEO grants.
Determination of
Awards.
The LDCC grants equity awards to the Officers, and recommends equity awards for the CEO to the full Board to approve. In addition to the targets discussed above, the LDCC is responsible for determining who should receive awards, when
the awards should be made and the number of shares to be granted for each award (in accordance with Newmonts Policy with Respect to the Granting of Equity Compensation as described above). The LDCC considers grants of long-term
incentive awards to the Officers each fiscal year. The awards are granted at fair market value (the average of the grant date high and low stock price for Newmont) shortly after the release of quarterly earnings, in which case, financial performance
and potentially other material items have already been disclosed publicly, prior to the granting of any awards.
Awards granted in 2016 were determined
in accordance with the terms of each long-term incentive plan as approved by the LDCC, with the exception of
sign-on
restricted stock unit award for Ms. Buese, and special restricted stock unit grants for
Messrs. Engel and Gottesfeld as described below in Special Restricted Stock Unit Grants to Messrs. Engel and Gottesfeld for 2016.
Criteria Considered in Determining the Amount of Equity-Based Compensation Awards.
The LDCC considers several factors when determining equity awards
for our Officers, including performance, market practice, projected business needs, the projected impact on stockholder dilution, and the associated compensation expense that will be included in our financial statements. Based on these
considerations, the LDCC has managed stockholder dilution well within the norms of our peers and stated guidelines from proxy advisory services and institutional investors. For 2016, Newmonts gross burn rate (annual use of shares as a
percentage of shares outstanding) was approximately 0.59%, below the benchmark set by governance advisory services for our industry.
Change in CEO LTI Percentage and LTI Grants for 2016.
The LDCC regularly reviews the Companys executive pay positioning
with the assistance of its independent consultant, Cook & Co., and management. Based on the review, the LDCC increased Mr. Goldbergs target LTI value by 30% to 550% for 2016. This resulted in a 24% increase in
Mr. Goldbergs Target Total Direct Compensation, placing his Target Total Direct Compensation around the 75
th
percentile of the peer group. Other than Mr. Goldberg, Officer long term incentive targets were not adjusted for 2016.
Special Restricted Stock Unit Grants to Messrs. Engel and Gottesfeld for 2016.
The LDCC awarded special restricted stock unit grants to Messrs. Engel and Gottesfeld in 2016 to recognize
long-term performance generally and strategic work by Messrs. Engel and Gottesfeld over the course of the last several years in the sale and acquisition of assets, in addition to serving as long-term retention tools to maintain important
institutional knowledge with the Company. The restricted stock unit grants were based on a target dollar value which was divided by the fair market value of Company stock (average of the high and low) on February 22, 2016, to determine the
number of shares. For Mr. Engel, the target dollar amount was $1,500,000 and for Mr. Gottesfeld $1,000,000. Both restricted stock unit grants contain a five-year cliff vesting schedule with
pro-rata
vesting acceleration upon involuntary termination without cause, full vesting acceleration upon termination following a change of control and no vesting upon voluntary termination or termination for cause.
56
Newmont Mining Corporation 2017 Proxy Statement
2014-2016 Performance Leveraged Stock Units (PSUs).
PSU Compensation Highlights:
|
|
|
Long-term
pay-for-performance
vehicle based on:
|
|
|
|
Newmonts share price performance versus peers;
|
|
|
|
Absolute share price growth over the performance period; and,
|
|
|
|
Performance period is three years.
|
|
|
|
2014-2016 PSU Performance:
|
|
|
|
TSR performance was in the top quartile at the 82
nd
percentile of the gold peer group;
|
|
|
|
Newmonts stock price appreciation was 33% over the same period;
|
|
|
|
Resulting in a PSU performance of 183% of target; with the change in stock price over the performance period, the average award value is above target at 242.8%
of target value.
|
|
|
|
PSUs represent the single largest component of the Officer compensation program and is aligned with stockholders experience.
|
The Performance Leveraged Stock Units (PSUs) align Officer compensation with long-term Company and stock price
performance. The number of PSUs earned is determined at the end of a three-year performance period based upon the change in Newmonts stock price (the Market Payout Factor) and the relative performance of Newmonts stock price
versus an industry peer group (the TSR Payout Factor). Payment for the PSU program can range from 0% to 200% in total, as detailed below.
Determining PSU Awards.
The calculation of the PSU awards is based on the Target Performance Leveraged Stock Unit Award, Market Payout Factor and the
TSR Payout Factor:
PSU Award = Target Performance Leveraged Stock Unit Award x (Market Payout Factor + TSR Payout Factor)
Target Performance Leveraged Stock Unit Award.
The target stock award for each Officer is calculated by multiplying the Officers base salary by
their target PSU award percentage. This value is then divided by the average daily closing price for the fourth quarter prior to the performance period (the baseline) for grants prior to 2016. In 2016, the Company changed the baseline to
the average daily closing price for the first 25 trading days of the three year performance period to reduce the potential variability between the grant date and the performance baseline.
Target Performance Leveraged Stock Unit Bonus = (base salary x target %) / baseline
Market Payout Factor (MPF).
The MPF is based on the absolute stock price change versus the baseline over the three-year performance period. The baseline is compared to the average daily
closing price of the last quarter of the performance period to determine the overall stock price change for grants prior to 2016. In 2016, the Company changed the final comparison to the baseline to the average daily closing price for the last 25
trading days of the three-year performance period to reduce the potential variability between the grant date and the performance baseline. The ratio of the two determines the MPF.
Newmont Mining
Corporation 2017 Proxy Statement
57
The payment for the MPF can range from a minimum of 0% to a cap of 150% of target based on the absolute stock price
performance during the performance period. Officers can earn up to 150% of target to incent performance; the award is capped at 150% in recognition that significant stock price appreciation may be related to changes in commodities prices. This range
of payment is believed to strike an appropriate balance between retention, incentive and mitigation of excessive risk. The performance range is displayed in the graph below.
TSR Payout Factor (TPF).
The TPF is based on the relative Total Shareholder Return
(TSR) of Newmont over the three-year performance period versus the TSR of an index of gold mining peer companies. The stock prices used in the TPF calculation are based on the same approach as noted for the MPF; however the calculation
also adjusts for dividends paid during the period.
The payment for the TPF can range from 0 to 50% of target based on Newmonts relative share
price performance. Newmonts stock price must reach at least threshold performance for Officers to receive any level of payment. Threshold performance under the TPF is defined as the median (50th percentile) TSR of the peer group index. Upon
exceeding the peer group median TSR, each percent increase above the median TSR corresponds to a payment equal to 2% of target, up to a maximum of 50%. This 2% multiplier is used to incent over-achievement yet make the maximum award realizable
without incenting excessive risk taking. For example, if Newmonts TSR percentile ranking reaches the 60th percentile (10% above the median), the resulting payment would be 20% of target (10% above the median x 2% multiplier).
In sum, the maximum PSU payout of 200% of the target PSUs would be awarded if the Companys stock price at the end of the
performance period equals 150% of the baseline and if the Companys TSR reaches the 75th percentile of the peer group. If the Companys TSR is at or below the median of the peer group, there will be no PSUs earned for the TPF (TSR) metric.
PSU Peer Group.
The companies in the TSR peer group are listed below, and may be altered prospectively from time to time due to mergers,
acquisitions or at the discretion of the LDCC:
|
|
|
Agnico Eagle Mines
Limited
|
|
Gold Fields Limited
|
Anglogold Ashanti Limited
|
|
Harmony Gold Mining Company Limited
|
Barrick Gold Corporation
|
|
Kinross Gold Corporation
|
Compañía de Minas Buenaventura S.A.A.
|
|
Newcrest Mining Limited
|
Freeport-McMoran Copper & Gold
Inc.
|
|
Yamana Gold Inc.
|
Goldcorp Inc.
|
|
|
58
Newmont Mining Corporation 2017 Proxy Statement
Difference Between the TSR Peer Group and Pay Benchmarking Peer Group.
The TSR peer group varies from
the total compensation peer group because the TSR peer group is comprised of only companies with large gold mining operations, irrespective of comparable company size. The LDCC determined that a relative TSR peer group should focus on companies with
gold operations, as those are the Companys direct competitors for investors and are subject to similar market forces related to gold price changes. The total compensation peer group includes companies without gold operations, but those
entities are more similar in revenue, net income, total assets, market capitalization and number of employees. The LDCC determined that the total compensation peer group is superior to the TSR peer group for evaluating the level of total target
compensation, because the companies in the total compensation peer group are the Companys competitors for talent and their business operations are of a relatively comparable size to Newmont.
PSU results for 2014-2016.
Newmonts stock price performed more favorably than many of its peers, with an 89% increase in
stock price in 2016. Newmonts relative TSR versus peers (TPF) ended the period in the first quartile of the PSU peer group at the 82
nd
percentile resulting in a TSR payout factor of 50%. Stock price appreciation over the performance period was 33%
(MPF), resulting in an overall PSU performance for 2016 of 183%.
Adjusting for the stock price appreciation over the period, the award value
as of December 30, 2016 as a percent of target value for the 2014-2016 PSU program was 242.8% due to stock price leverage in the plan. The chart below shows the payments for each Officer, based on the results of the PSU awards in 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
PSU Base
Salary (A)
|
|
|
Target %
(B)
|
|
|
Award
Amount
(C)=(AxB)
|
|
|
Average
Q4 2013
Closing
Price
(D)
|
|
|
Target
Shares
Award
(E=C/D)
|
|
|
MPF
Price
Appreciation
% of
Tgt
(F)
|
|
|
TPF
Relative
TSR
Value
(G)
|
|
|
PSU
Result
(H=F+G+1)
|
|
|
PSU
Award
(2)
(Rounded
Down)
(ExH)
|
|
|
Value
as
percent
of
target
as of
12/30/16
(1)
|
|
Gary Goldberg
|
|
|
$1,075,000
|
|
|
|
333
|
%
|
|
|
$3,582,975
|
|
|
|
$25.68
|
|
|
|
139,523
|
|
|
|
33
|
%
|
|
|
50
|
%
|
|
|
183.0
|
%
|
|
|
255,327
|
|
|
|
242.8
|
%
|
Nancy Buese
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randy Engel
|
|
|
$595,000
|
|
|
|
200
|
%
|
|
|
$1,190,000
|
|
|
|
$25.68
|
|
|
|
46,339
|
|
|
|
33
|
%
|
|
|
50
|
%
|
|
|
183.0
|
%
|
|
|
84,800
|
|
|
|
242.8
|
%
|
Stephen Gottesfeld
|
|
|
$500,000
|
|
|
|
180
|
%
|
|
|
$900,000
|
|
|
|
$25.68
|
|
|
|
35,046
|
|
|
|
33
|
%
|
|
|
50
|
%
|
|
|
183.0
|
%
|
|
|
64,134
|
|
|
|
242.8
|
%
|
Thomas Palmer
(4)
|
|
|
$498,813
|
|
|
|
110
|
%
|
|
|
$543,194
|
|
|
|
$25.68
|
|
|
|
21,152
|
|
|
|
33
|
%
|
|
|
50
|
%
|
|
|
183.0
|
%
|
|
|
38,708
|
|
|
|
242.8
|
%
|
Laurie Brlas
(5)
|
|
|
$700,000
|
|
|
|
250
|
%
|
|
|
$1,750,000
|
|
|
|
$25.68
|
|
|
|
68,146
|
|
|
|
33
|
%
|
|
|
50
|
%
|
|
|
183.0
|
%
|
|
|
118,448
|
|
|
|
230.6
|
%
|
(1)
|
The closing price of the Companys stock on December 30, 2016, was $34.07.
|
(2)
|
PSU Award reflects what was paid for actual 2014-2016 performance versus the Summary
Compensation Table which reflects targets set in 2016, which will pay out in 2019.
|
(3)
|
Ms. Buese was not employed with Newmont on the date of the PSU awards in 2014,
and therefore, did not receive a grant for this performance period.
|
(4)
|
Mr. Palmers PSU target was based on his prior role in 2014 as Senior Vice
President, Indonesia.
|
(5)
|
Ms. Brlas PSU award is prorated for her time of service.
|
Performance Leveraged Stock Unit Trend Results
.
Using Mr. Goldbergs awards, PSU payments over the last
3 years averaged 112% of target value (110% on plan performance).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSU Performance
Cycle
|
|
PSU Target Value
|
|
|
PSU Target
Shares
|
|
|
PSU Plan
Performance
|
|
|
Performance
Adjusted Shares
|
|
|
Value of Shares
as of 12/31 of
vest year
(1)
|
|
|
Value as a
percentage of
Target
|
|
|
|
|
|
|
|
|
2012-2014 PSU
|
|
|
$1,937,500
|
|
|
|
29,711
|
|
|
|
58
|
%
|
|
|
17,262
|
|
|
|
$326,252
|
|
|
|
17
|
%
|
2013-2015 PSU
|
|
|
$3,582,975
|
|
|
|
72,824
|
|
|
|
87
|
%
|
|
|
63,648
|
|
|
|
$1,145,028
|
|
|
|
32
|
%
|
2014-2016 PSU
|
|
|
$3,582,975
|
|
|
|
139,523
|
|
|
|
183
|
%
|
|
|
255,327
|
|
|
|
$8,698,991
|
|
|
|
243
|
%
|
Average
|
|
|
$3,034,483
|
|
|
|
80,686
|
|
|
|
110
|
%
|
|
|
112,079
|
|
|
|
$3,390,090
|
|
|
|
112
|
%
|
(1)
|
2012-2014 PSU is valued at December 31, 2014, closing stock price of $18.90; 2013-2015 PSU is valued at December 31, 2015, closing stock price of
$17.99; 2014-2016 PSU is valued at December 30, 2016, stock price of $34.07.
|
Newmont Mining
Corporation 2017 Proxy Statement
59
Restricted Stock Units.
Restricted Stock Unit Highlights:
|
|
|
Represent
one-third
(33%) of the total LTI target value;
|
|
|
|
Vest
one-third
per year over three years;
|
|
|
|
RSUs align executive pay with shareholder returns as the value varies directly with Newmonts share price, further assist with increasing the ownership
position of our executive team, and aid with retention during volatile economic cycles.
|
Structure of RSUs.
Restricted Stock Units (RSUs) were added into the executive compensation program in 2015. RSUs are subject to the approval by the LDCC, granted as a percent of base salary at Fair Market Value (the average of the high and low price of Newmont on the
date of grant), and vest
one-third
per year over three years.
2016 Restricted Stock Unit Awards.
The Company granted Restricted Stock Unit Awards in February 2016. The RSUs vest in equal annual increments on the first, second and third anniversaries from the date of grant (February 22, 2017, 2018, and 2019). The grants were made in the
following amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
2016 Base
Salary
(A)
|
|
|
Target %
(B)
|
|
|
Target
Award
Amount
(C = AxB)
|
|
|
Award Date
FMV of
NEM stock
(D)
|
|
|
Shares
Awarded
(E = C/D)
|
|
|
Value as a
percent of
target as
of
12/30/16
(1)
|
|
Gary Goldberg
|
|
|
$1,300,000
|
|
|
|
183
|
%
(2)
|
|
|
$2,383,333
|
|
|
|
$24.785
|
|
|
|
96,160
|
|
|
|
137.5
|
%
|
Nancy Buese
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$37.85
|
|
|
|
68,692
|
|
|
|
90.0
|
%
|
Randy Engel
|
|
|
$630,000
|
|
|
|
100
|
%
|
|
|
$630,000
|
|
|
|
$24.785
|
|
|
|
25,418
|
|
|
|
137.5
|
%
|
Stephen Gottesfeld
|
|
|
$515,000
|
|
|
|
90
|
%
|
|
|
$463,500
|
|
|
|
$24.785
|
|
|
|
18,700
|
|
|
|
137.5
|
%
|
Thomas Palmer
|
|
|
$750,000
|
|
|
|
117
|
%
(2)
|
|
|
$875,000
|
|
|
|
$24.785
|
|
|
|
35,303
|
|
|
|
137.5
|
%
|
Laurie Brlas
(4)
|
|
|
$700,000
|
|
|
|
125
|
%
|
|
|
$875,000
|
|
|
|
$24.785
|
|
|
|
10,155
|
|
|
|
39.5
|
%
|
(1)
|
Based on Newmonts closing price on December 30, 2016, of $34.07.
|
(3)
|
In consideration for compensation forfeited from her prior employer as a result of
joining Newmont, Ms. Buese received a grant of restricted stock units of $2.6 million of which $0.7 million will vest in one year and $1.9 million will vest in two years.
|
(4)
|
Ms. Brlas shares awarded where prorated for her time of service.
|
As described above under 2016 Special Restricted Stock Unit Grants for Messrs. Engel and Gottesfeld, Mr. Engel
and Mr. Gottesfeld received an additional RSU grant in 2016 with cliff vesting in full, five years from the date of grant in the following amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Target
RSU
Value (A)
|
|
|
Award Date
FMV of
NEM stock
(B)
|
|
|
Shares
Awarded
(A/B)
|
|
|
Value as a
percent of
target as
of
12/30/16
(1)
|
|
Randy Engel
|
|
|
$1,500,000
|
|
|
|
$24.785
|
|
|
|
60,520
|
|
|
|
137.5
|
%
|
Stephen Gottesfeld
|
|
|
$1,000,000
|
|
|
|
$24.785
|
|
|
|
40,346
|
|
|
|
137.5
|
%
|
(1)
|
Based on Newmonts closing price on December 30, 2016, of $34.07. Final value as a percent of target will be determined upon the final close price on
December 30, 2021.
|
The Company accrues cash dividend equivalents on restricted stock units and pays them after vesting when
common stock is issued.
60
Newmont Mining Corporation 2017 Proxy Statement
Realizable Compensation for 2016.
To assist stockholders with understanding regular annual compensation (salary, short-term incentives and long-term incentives) for Newmonts Officers as of
December 31, 2016, the following table summarizes actual salary paid, actual short-term incentives (Corporate Performance Bonus and Personal Bonus) paid for 2016 performance, and long-term incentives (RSUs and PSUs) awarded (targets set) in
2016 with the value based on Newmonts closing stock price on December 30, 2016.
The following table is not intended as a substitute for the Summary Compensation Table
required by the Securities and Exchange Commission, which
appears at page 67.
Newmont delivered strong operating results and outperformed gold price and gold industry indices with a share price increase of
89%, resulting in realizable values above target at year end:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Actual
Salary Paid
(1)
|
|
|
Total
Actual
Bonus
(2)
|
|
|
Total
Actual
Cash
|
|
|
Long-Term
Incentives
(3)
|
|
|
2016 Realizable
Compensation
|
|
|
Realizable Compensation
as a % of Target
|
|
Gary Goldberg
|
|
|
$1,270,742
|
|
|
|
$2,704,393
|
|
|
|
$3,975,134
|
|
|
|
$11,805,596
|
|
|
|
$15,780,730
|
|
|
|
152.8
|
%
|
Thomas Palmer
|
|
|
$623,230
|
|
|
|
$641,070
|
|
|
|
$1,264,300
|
|
|
|
$4,334,181
|
|
|
|
$5,598,481
|
|
|
|
150.7
|
%
|
Nancy Buese
|
|
|
$90,685
|
|
|
|
$115,290
|
|
|
|
$205,975
|
|
|
|
$2,340,336
|
|
|
|
$2,546,311
|
|
|
|
91.5
|
%
|
Randall Engel
|
|
|
$627,196
|
|
|
|
$851,682
|
|
|
|
$1,478,878
|
|
|
|
$3,120,608
|
|
|
|
$4,599,486
|
|
|
|
149.3
|
%
|
Stephen Gottesfeld
|
|
|
$512,074
|
|
|
|
$571,849
|
|
|
|
$1,083,923
|
|
|
|
$2,295,841
|
|
|
|
$3,379,764
|
|
|
|
144.6
|
%
|
Laurie Brlas
|
|
|
$700,000
|
|
|
|
$888,160
|
|
|
|
$1,588,160
|
|
|
|
$4,334,181
|
|
|
|
$5,922,341
|
|
|
|
147.1
|
%
|
(2)
|
Total Actual Bonus column reflects the amounts paid in 2017 for 2016 performance under
the Corporate Performance Bonus and the Personal Bonus as stated in the section Short-Term Incentives earlier in this CD&A.
|
(3)
|
Long-Term Incentives reflect:
|
|
|
|
PSU awards made in 2016 for the performance period 2016-2019, payable in 2019. The value reflects target shares times Newmonts stock price on
December 30, 2016, of $34.07 resulting in a current award value of approximately 119% of target (stock price basis for determining the 2016 award was $19.04). Actual number of shares granted will not be known until after the completion of the
2016-2019 performance period.
|
|
|
|
RSU awards made in 2016 under the Restricted Stock Unit program as stated in the section Long-term Incentives earlier in this CD&A. The value
reflects actual share grants based on the RSU award under the program times Newmonts stock price on December 30, 2016, of $34.07 resulting in a current average award value of approximately 137.5% of target for awards granted in
February 22, 2016 and 90.0% of target for awards granted November 1, 2016. (Fair Market Value on the date of grant was $24.785 for awards made on February 22, 2016, and $37.85 award made on November 1, 2016).
|
See the Executive Summary section for further description of the difference between realized pay, realizable pay, and the pay disclosed in the Summary
Compensation Table.
Looking Ahead to 2017
Each year the LDCC holds a planning meeting outside of the regular Board of Directors meeting schedule to reflect on incentive plan performance and any feedback
received regarding these plans (including input from shareholders and proxy advisory services, as well as considering the results of the Companys annual Say on Pay vote), and discuss current and future business objectives to
determine whether adjustments should be considered to improve the alignment of pay and performance. Based on this review in 2016, future considerations include:
|
|
Evaluate incentive plans (metrics, incentive plan leverage) for continuous improvement and ensure structure drives long-term performance aligned with stockholder
interests. Any resulting plan design revisions will be disclosed in future annual proxy statements.
|
|
|
|
In particular, for compensation plan purposes, metrics on a per share basis will be considered, including for example, CPB EBITDA per share and Reserves per
share.
|
|
|
Perform evaluation of Newmonts peer group to ensure the reference companies continue to represent a valid point of comparison based on the industry and
Newmonts business model. See Peer Group Determination for the revised peer group for 2017.
|
|
|
The PSU Peer Group has been revised for 2017 to include Randgold to more closely align to the competitor peer group used for investor relations purposes.
|
|
|
For 2017, the Health and Safety metrics of the Corporate Performance Bonus (CPB) will evolve to reinforce the focus on risk management (fatality
prevention and improving health controls). Specific to fatality risk
|
Newmont Mining
Corporation 2017 Proxy Statement
61
|
management, Newmont will focus on the implementation of globally consistent standards, critical controls and verification activities for key risks across the business and CPB metrics will align
to support this work. Full details of this program change will be provided in the 2017 CD&A.
|
|
|
Continued focus on ensuring holistic perspective on leadership, performance and rewards.
|
Post-Employment
Compensation
In order to alleviate concerns that may arise in the event of an employees separation from service with the Company and enable employees to focus on Company
duties, the Company has post-employment compensation plans and policies in place that include Company funded benefits as well as employee contribution-based benefits. Post-employment compensation plans and policies provide for a broad range of
post-employment benefits to employees, including Officers, and create strong incentives for employees to remain with the Company. The Companys decisions regarding post-employment compensation take into account the industry sector and general
business comparisons to ensure post-employment compensation is aligned with the broader market.
Retirement.
The Company offers two
tax-qualified
retirement plans, the Pension Plan, which is a defined benefit plan and the Savings Plan, which is a defined contribution plan (401(k)). Both of these plans are available to a broad range of Company
employees, generally including all U.S. domestic salaried employees. Because of the qualified status of the Pension Plan and Savings Plan, the Internal Revenue Code limits the benefits available to highly-compensated employees. As a result, the
Company provides a
non-qualified
defined benefit plan (Pension Equalization Plan) and a
non-qualified
savings plan (Savings Equalization Plan) for executive grade level
employees who are subject to the Internal Revenue Code limitations in the qualified plans. The two equalization plans are in place to give executive grade level employees the full benefit intended under the qualified plans by making them whole for
benefits otherwise lost as a result of Internal Revenue Code annual compensation limits.
On a regular basis, the Company reviews its retirement
benefits. The purpose of the review is to assess the level of replacement income that the Companys retirement plans provide for a full career Newmont employee. The Company attempts to maintain a competitive suite of retirement benefits that
accomplishes a degree of income replacement post retirement. The level of income replacement varies depending on the income level of the employee. The benefits included in the analysis are the pension plan, pension equalization plan, 401(k) matching
contribution and social security benefits. The Company retirement benefits are important hiring and retention tools for all levels of employees within the Company.
See the 2016 Pension Benefits Table and 2016
Non-Qualified
Deferred Compensation Table for a description of benefits payable to the Officers under the Pension Plan, Pension
Equalization Plan and the Savings Equalization Plan.
Change of Control.
The Company recognizes that the potential for a change of
control can create uncertainty for its employees that may interfere with an executives ability to efficiently perform his or her duties or may result in a voluntary termination of an executives employment with the Company during a
critical period. As a result, the Company originally adopted the Executive Change of Control Plan of Newmont in 1998, which was subsequently revised in 2008, to retain executives and their critical capabilities to enhance and protect the best
interests of the Company and its stockholders during an actual or threatened change of control. As of January 1, 2012, the Company adopted a new Executive Change of Control Plan that removed the excise tax gross up, reduced the formula for
change of control base cash benefit, removed retirement plan contributions and reduced the time period for continuation of health benefits. The 2012 Executive Change of Control Plan applies to employees hired into, or current employees promoted
into, eligible positions. The prior plan remains in place for employees who were eligible on, or prior to, December 31, 2011, because the terms of the prior plan prohibit any reduction in benefits to plan participants. The levels of benefits
provided in the 2008 and 2012 Executive Change of Control Plans are intended to motivate and retain key executives during an actual or threatened change of control. Of the Named Executive Officers, based on their dates of hire,
Messrs. Goldberg, Engel and Gottesfeld are eligible for benefits under the 2008 Executive Change of Control Plan; Ms. Buese and Mr. Palmer are eligible for benefits under the 2012 Executive Change of Control Plan.
In the event of a Change of Control, as defined in both the 2008 and 2012 Plans, and a qualifying termination of employment, certain designated Officers receive up
to three times annual pay and other benefits. See the Potential Payments Upon Termination or Change of Control section for potential amounts payable to the Officers under the applicable Change of Control Plan. These benefits, paid upon termination
of employment following a change of control on what is sometimes referred to as a double-trigger basis, provide incentive for executives to remain employed to complete the transaction and provide compensation for any loss of employment
thereafter.
62
Newmont Mining Corporation 2017 Proxy Statement
The 2013 Stock Incentive Plan approved by stockholders in 2013 incorporates a double-trigger upon change of control
for any equity vesting and all equity outstanding only vests upon a double trigger of change of control and termination of employment.
Severance.
On October 26, 2011, the Company adopted the Executive Severance Plan of Newmont (the ESP) which replaced the Severance
Plan of Newmont for employees in executive levels. The ESP provides severance benefits following involuntary termination without cause. The ESP was adopted to mitigate negotiation of benefits upon termination, provide additional protection to the
Company and define and cap severance costs. Maximum benefits under the ESP are reduced from the prior severance plan of Newmont. Equity will vest
pro-rata.
The
pro-rata
portion represents the amount deemed to be earned. The purpose of the ESP is to provide income and benefit replacement for a period following employment termination, where termination is not for cause. The ESP allows the terminated employee time and
resources to seek future employment.
See the Potential Payments Upon Termination or Change of Control section for potential amounts payable to the
Officers.
Officers Death Benefit.
The Company maintains group life insurance for the benefit of all salaried employees of the
Company. In addition, Officers and executive grade level employees have a supplemental Officer Death Benefit Plan. The purpose of the Officer Death Benefit Plan is to provide benefits to Officers of the Company beyond the maximum established in the
Companys group life insurance, as appropriate to their higher income levels.
See the Potential Payments Upon Termination or Change of Control
section for potential amounts payable to the Officers under the Officer Death Benefit Plan.
Executive Agreements.
All of the Officers are
at-will
employees of the Company, without employment agreements. However, the Company has agreed to provide Mr. Goldberg with benefits under the Executive Severance Plan of Newmont at the time of his hire,
pursuant to the terms of such plan, even if the Company alters the terms of such plan.
Newmont Mining
Corporation 2017 Proxy Statement
63
Other Policies and Considerations
Results of the 2016 Advisory Vote on 2015 Executive Compensation (Say on Pay)
In 2016, Newmont conducted an advisory vote on the 2015 compensation of the Officers in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted in 2010, commonly known as Say on
Pay. As Newmont regularly engages stockholders to discuss a variety of aspects of our business and welcomes stockholder input and feedback, the Say on Pay vote serves as an additional tool to guide the Board and the LDCC in ensuring alignment
of the Companys executive compensation programs with stockholder interests.
The result of our 2016 Say on Pay advisory vote indicates substantial
support for the executive compensation of our Officers with 94% (excluding abstentions) of the votes cast For the advisory vote on executive compensation. The LDCC reviewed this result, and concluded that this result affirms our
stockholders support of the Companys approach to executive compensation. However, consistent with the Companys ongoing commitment to best practices in compensation governance and strong emphasis on pay for performance, the LDCC
continues to review compensation programs to further align executive pay with stockholder interests, as described in this CD&A. Although the LDCC did not make any changes to our 2016 executive compensation program and policies specifically as a
result of the Say on Pay advisory vote, the LDCC did consider the vote in making decisions for the 2016 incentive structure. The LDCC will continue working to ensure that the design of the Companys executive compensation programs is focused on
long-term stockholder value creation, emphasizes
pay-for-performance
and does not encourage the taking of short-term risks at the expense of long-term results. The LDCC
will continue to use the Say on Pay vote as a guidepost for stockholder sentiment and continue to respond to stockholder feedback.
Executive
Compensation Risk Assessment
We believe that Newmonts compensation program for the Chief Executive Officer and Officers is structured in a
way that balances risk and reward, yet mitigates the incentive for excessive risk taking. Beyond prudent plan design and compensation policies, in January 2016, the Companys Enterprise Risk Management (ERM) team conducted a risk
assessment of the executive compensation program, reviewing all program changes since the prior assessment completed in January 2014.
Upon review of
the changes to the executive compensation programs from 2014 through 2015, it was determined that these changes align with the experience of shareholders and do not provide an incentive for excessive risk taking. The changes include an adjustment in
the short-term incentive program that increases the percentage weighting for the Company Performance Bonus (with a corresponding decrease in the weighting for the Personal Bonus) for senior executives, the addition of EBITDA to the Company
Performance Bonus, the replacement of the Strategic Stock Units (SSU) program with a Restricted Stock Unit (RSU) program at the senior executive level since EBITDA is now included in the short-term incentive program, and the
replacement of SSUs with Performance Share Units (PSUs) at the vice president level.
In addition to the Companys risk assessment
process, the incentive program results are reviewed by the Companys Internal Audit function (which formally reports to the Audit Committee of the Board of Directors) to further ensure program process and calculations are accurate and conform
to the rules contained within each respective program. Finally, the 2013 Stock Plan approved by the stockholders of the Company provides for a limit of 1 million shares of restricted stock or restricted stock units, as defined in the 2013 Stock
Plan that may be granted with less than a
3-year
vesting period.
Accelerated Grant and Vesting of Stock
Awards
Change of Control.
Immediately prior to a change of control, the following occurs:
|
|
PSUs: PSU performance will be measured using the change of control price of the Company stock. The
pro-rata
percentage of
the actual payout of PSUs correlating to the period of time that elapsed prior to the change of control shall be granted in common stock. For the remainder of the actual PSUs correlating to the performance period that did not elapse prior to the
change of control, the Company will issue restricted stock units that will vest at the end of the performance period. In the event that the acquiring company will not issue equity, the acquiring company may issue cash equivalent awards; and
|
|
|
RSUs: For the year of the change of control, a target RSU will be granted in the form of restricted stock units with
one-third
of the grant vesting the following January 1 and the next
two-thirds
of the grant vesting on the following two anniversaries of the initial vest.
|
64
Newmont Mining Corporation 2017 Proxy Statement
Termination of Employment following Change of Control.
All PSUs and RSUs vest upon termination of
employment following a change of control.
Death/Long-Term Disability/Retirement/Severance
|
|
PSUs: In the event of severance, retirement, death or disability, PSU grants shall vest in a
pro-rata
amount based on
actual performance for each PSU award. Performance for the time period for each award will be calculated (using the most recent fiscal
quarter-end
performance) and settled accordingly on a
pro-rated
basis.
|
|
|
RSUs: In the event of severance, retirement, death or disability, RSU grants shall vest in a
pro-rata
amount based upon
the date of grant and separation date.
|
Stock Ownership Guidelines.
The Companys stock ownership guidelines require
that all Officers own shares of the Companys stock, the value of which is a multiple of base salary. For the Officers, the stock ownership guidelines are as follows:
STOCK OWNERSHIP GUIDELINES
|
|
|
|
|
Name
|
|
Multiple of
Base Salary
|
|
Gary Goldberg
|
|
|
5
|
|
Thomas Palmer
|
|
|
3
|
|
Nancy Buese
|
|
|
3
|
|
Randy Engel
|
|
|
3
|
|
Stephen Gottesfeld
|
|
|
3
|
|
Stock ownership guidelines were put in place to increase the alignment of interests between executives and stockholders by
encouraging executives to act as equity owners of the Company. The LDCC sets the ownership guidelines by considering the size of stock awards. Unvested RSUs, shares held in retirement accounts and target PSUs within the three year performance period
are considered owned for purposes of the guidelines. The LDCC reviews compliance with the guidelines annually. Executives who are new to their positions have five years to comply with the guidelines. All of the executives identified above are in
compliance with the stock ownership guidelines or fall within the exception period.
Restrictions on Trading Stock.
The Company has adopted
a stock trading standard for its employees, including the Officers. The standard prohibits certain employees from trading during specific periods at the end of each quarter until after the Companys public disclosure of financial and operating
results for that quarter, unless they have received the approval of the Companys general counsel. The Company may impose additional restricted trading periods at any time if it believes trading by employees would not be appropriate because of
developments at the Company that are, or could be, material. In addition, the Company requires
pre-clearance
of trades in Company securities for its Officers, and prohibits buying shares on margin or using
shares as collateral for loans. Other than as stated in this paragraph and the stock ownership requirements stated above, the Company does not have a holding period on common stock delivered following the expiration of a restricted stock unit
vesting period, or common stock delivered following the exercise of a stock option.
Perquisites.
The Companys philosophy is to
provide minimal perquisites to its executives. In 2013, the LDCC approved financial advisory services for the executives beginning in 2014. The benefit was approved on the basis that it assists with managing personal complexity with financial
planning at this level and supports greater focus on Company business. For 2016, the benefit value ranges from $12,000 to $15,500 depending on employee level, and the executive may decide whether or not to receive the financial advisory services. If
the executive elects to receive the financial advisory services, the amount of such services will be paid by the Company but will not be grossed up; employees will have the responsibility of paying the tax liability associated with the imputed
income for the benefit. Separately, as the Company believes in promoting financial wellness for all employees, the Company also provides access to individual financial planning services for all employees under the terms of the agreement with the
Companys 401(k) administrator.
In alignment with Newmonts safety and wellness culture, the LDCC approved the implementation of annual
Executive Health Assessments for the CEO and Executive Leadership Team effective January 1, 2016. The Company strongly believes in investing in the health and well-being of its senior executives as an important component in providing continued
effective leadership for the Company. The expected benefit value will range from approximately $3,000 to $5,000 per senior executive and will not include a tax
gross-up.
Newmont Mining
Corporation 2017 Proxy Statement
65
Tax Deductibility of Compensation.
Section 162(m) of the Internal Revenue Code of 1986, as amended,
limits the amount of compensation in excess of $1,000,000 that the Company may deduct in any one year with respect to its chief executive officer and three other most highly compensated executive officers (excluding the chief financial officer)
whose compensation must be included in this proxy statement because they are the most highly compensated executive officers. There are exceptions to the $1,000,000 limitation for performance-based compensation meeting certain requirements. For 2016,
Corporate Performance Bonuses, Personal Bonuses, Performance Leveraged Stock Units and Restricted Stock Units do not meet the performance-based exception under Section 162(m) and are therefore subject to the $1,000,000 deduction limit. Thus, in
2016, Officer compensation amounts are greater than $1,000,000 and a portion of their salaries, bonuses, stock awards and other compensation items are not deductible by the Company. In 2016, Messrs. Goldberg, Engel and Palmer compensation amounts
are greater than $1,000,000 and a portion of their salaries, bonuses, stock awards, and other compensation items are not deductible by the Company.
The
Company is primarily focused on designing compensation programs that are intended to incentivize executive performance that will lead to long-term value creation for our stockholders. Nonetheless, the Company did include certain plans in the 2013
proxy statement that would allow the Company the ability to utilize the 162(m) performance-based exemption in 2014 and beyond, which is subject to ongoing analysis by the Company. Based upon this ongoing analysis, we may designate programs to be
subject to the performance-based exception requirements under Section 162(m) in the future.
66
Newmont Mining Corporation 2017 Proxy Statement
Executive Compensation Tables
2016 SUMMARY COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
and
Principal Position
|
|
Year
|
|
|
Salary
(1)
($)
|
|
|
Bonus
(2)
($)
|
|
|
Stock
Awards
(3)
($)
|
|
|
Option
Awards
($)
|
|
|
Non-Equity
Incentive
Plan
Compen-
sation
(4)
($)
|
|
|
Change
in
Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings
(5)
($)
|
|
|
All
Other
Compen-
sation
(6)
($)
|
|
|
Total
($)
|
|
Gary Goldberg
|
|
|
2016
|
|
|
|
$1,270,742
|
|
|
|
$0
|
|
|
|
$11,778,961
|
|
|
|
$0
|
|
|
|
$2,704,393
|
|
|
|
$726,422
|
|
|
|
$109,576
|
|
|
|
$16,590,094
|
|
President and Chief Executive
Officer
|
|
|
2015
2014
|
|
|
|
$1,135,783
$1,075,000
|
|
|
|
$0
$0
|
|
|
|
$9,452,443
$5,587,034
|
|
|
|
$0
$0
|
|
|
|
$2,467,261
$2,297,006
|
|
|
|
$502,954
$523,724
|
|
|
|
$50,484
$64,640
|
|
|
|
$13,608,925
$9,547,404
|
|
Nancy Buese
|
|
|
2016
|
|
|
|
$90,865
|
|
|
|
$1,341,150
|
|
|
|
$2,599,992
|
|
|
|
$0
|
|
|
|
$115,290
|
|
|
|
$13,252
|
|
|
|
$3,332
|
|
|
|
$4,163,881
|
|
Executive Vice President and Chief Financial
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randy Engel
|
|
|
2016
|
|
|
|
$627,196
|
|
|
|
$0
|
|
|
|
$4,613,559
|
|
|
|
$0
|
|
|
|
$851,682
|
|
|
|
$1,277,350
|
|
|
|
$58,542
|
|
|
|
$7,428,329
|
|
Executive Vice President,
Strategic Development
|
|
|
2015
2014
|
|
|
|
$611,877
$595,000
|
|
|
|
$0
$0
|
|
|
|
$3,175,119
$1,855,415
|
|
|
|
$0
$0
|
|
|
|
$797,508
$848,500
|
|
|
|
$21,610
$1,963,741
|
|
|
|
$34,998
$102,691
|
|
|
|
$4,641,112
$5,365,347
|
|
Stephen Gottesfeld
|
|
|
2016
|
|
|
|
$512,074
|
|
|
|
$0
|
|
|
|
$3,290,641
|
|
|
|
$0
|
|
|
|
$571,849
|
|
|
|
$616,059
|
|
|
|
$57,585
|
|
|
|
$5,048,207
|
|
Executive Vice President and General
Counsel
|
|
|
2015
2014
|
|
|
|
$500,000
$500,000
|
|
|
|
$0
$0
|
|
|
|
$2,320,149
$1,403,240
|
|
|
|
$0
$0
|
|
|
|
$577,235
$592,663
|
|
|
|
$25,270
$890,479
|
|
|
|
$31,305
$95,089
|
|
|
|
$3,453,959
$3,481,471
|
|
Thomas Palmer
|
|
|
2016
|
|
|
|
$615,134
|
|
|
|
$650,000
|
|
|
|
$4,324,405
|
|
|
|
$0
|
|
|
|
$641,070
|
|
|
|
$98,313
|
|
|
|
$291,433
|
|
|
|
$6,620,354
|
|
Executive Vice President and Chief Operating
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Laurie Brlas
|
|
|
2016
|
|
|
|
$700,000
|
|
|
|
$0
|
|
|
|
$4,324,405
|
|
|
|
$0
|
|
|
|
$888,160
|
|
|
|
$0
|
|
|
|
$1,104,668
|
|
|
|
$7,017,232
|
|
Former Executive Vice President and Chief
Financial Officer
|
|
|
2015
2014
|
|
|
|
$700,000
$700,000
|
|
|
|
$0
$0
|
|
|
|
$4,511,366
$2,728,570
|
|
|
|
$0
$0
|
|
|
|
$908,740
$951,650
|
|
|
|
$250,062
$323,095
|
|
|
|
$28,721
$653,734
|
|
|
|
$6,398,889
$5,357,049
|
|
(1)
|
For Ms. Buese, represents salary since joining the Company on October 31, 2016. For Mr. Palmer, includes Australian earnings through
April 30, 2016, converted at an exchange rate of $1 Australian dollar: $0.734 U.S. dollar. For Ms. Brlas, represents
twenty-six
payroll periods (one year).
|
(2)
|
For 2016, amount shown for Ms. Buese represents a
sign-on
bonus paid in 2016 and differentiation from the Corporate
Performance and Personal Bonus payments. The differentiation from the Corporate Performance and Personal Bonus in 2016 for Ms. Buese is a calculation of such payout based on annualized salary rate rather than salary paid in the year.
Ms. Buese received a sign on bonus of $600,000 and a differentiation from the Corporate Performance and Personal Bonus of $741,150 in consideration of compensation forfeited from a prior employer as a result of joining Newmont. For
Mr. Palmer, represents a relocation bonus of $650,000 to assist with additional support for his transition from Australia to the U.S.
|
(3)
|
Amounts shown represent the aggregate grant date fair value computed in accordance
with the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 718 (ASC 718). For the Strategic Stock Units utilized in 2014, the grant date fair value is the target number of shares granted,
multiplied by the fair market value on the date of grant, and the maximum value is 150% of the target. The Companys 2005 and 2013 Stock Incentive Plans define fair market value of the stock as the average of the high and low sales price on the
date of the grant, which is the grant date fair value for the Strategic Stock Units (SSU) and the 2015 and 2016 restricted stock unit grants. For the 2014 SSU grants, the fair market value on the date of grant, February 26, 2014,
was $23.655. In 2015, the Company transitioned to a restricted stock unit program to replace the SSU program. The restricted stock unit grants have a three year
pro-rata
vesting schedule. For details of the
design of the program, see the CD&A. For the 2016 restricted stock unit grants, the fair market value on the date of the grant, February 22, 2016, was $24.785, except for Ms. Buese who received a grant on November 1, 2016, with a
fair market value of $37.85 pursuant to her offer of employment; the grant values are shown in the Grants of Plan Based Awards Table. For the 2015 restricted stock unit grants, the fair market value on the date of the grant, February 24, 2015,
was $25.555. Pursuant to ASC 718, the aggregate grant date fair value of Performance Leveraged Stock Units (PSU) is determined by multiplying the target number of shares by a Monte Carlo calculation model, which determined a grant date
fair value of the 2016-2018 (payout 2019) Performance Leveraged Stock Units of $37.53 per share for each participating Named Executive Officer (see Supplemental Note below for additional details). For 2015-2017 Performance Leveraged
Stock Units (payout 2018, reflected in 2015), the aggregate grant date fair value of Performance Leveraged Stock Units is determined by multiplying the target number of shares by a Monte Carlo calculation model value of $41.85 per share for each
participating Named Executive Officer. For 2014-2016 Performance Leveraged Stock Units (payout 2017, reflected in 2014), the aggregate grant date fair value of Performance Leveraged Stock Units is determined by multiplying the target number of
shares by a Monte Carlo calculation model value of $27.20 per share for each participating Named Executive Officer. The maximum value of the Performance Leveraged Stock Units is 200% of target. Amounts also include the special restricted unit grants
for Messrs. Engel and Gottesfeld which were provided to recognize long-term performance generally and strategic work over the course of the last several years in the sale and acquisition of assets in addition to serving as long-term retention tools
to maintain important institutional knowledge with the Company. The fair market value for these awards on the date of the grant, February 22, 2016, was $24.785. These awards will vest in full after five years from the date of grant.
|
Newmont Mining
Corporation 2017 Proxy Statement
67
(4)
|
Amounts shown represent Corporate Performance Bonuses and the Personal Bonuses paid in cash. The executives received bonuses as follows: Mr. Goldberg
corporate $1,846,642 and personal $857,751; Ms. Buese corporate $88,030 and personal $27,260; Mr. Engel corporate $546,865 and personal $304,817; Mr. Gottesfeld corporate $421,683 and personal $150,166, and; Mr. Palmer corporate
$472,798 and personal $168,272. For Ms. Buese, represents the value based on Corporate Performance bonus and Personal Bonus eligible wage basis which includes earnings beginning with her employment date of October 31, 2016.
|
(5)
|
Amounts shown represent the increase in the actuarial present value under the Companys qualified and
non-qualified
defined benefit pension plans. The PEP interest rate is based upon the PBGC interest rate. At December 31, 2016, the PBGC lump sum interest rate was 0.75%, at December 31, 2015, the PBGC lump sum interest rate was 1.25%, and at
December 31, 2014, the PBGC lump sum interest rate was 1.00%. At December 31, 2016, the FASB rate was 4.36%, December 31, 2015, the FASB rate was 4.80%, and at December 31, 2014, the FASB rate was 4.32%. Ms. Brlas was not
vested in her pension benefit at the time of her separation of employment.
|
(6)
|
Amounts shown are described in the All Other Compensation Table.
|
Supplemental note to Footnote (3)
Above2016 Target Stock Compensation Value
: With respect to the target long-term incentive or stock value, the following is provided to clarify the
differences in the amounts noted in the Summary Compensation Table and the target grant value as provided by the LDCC. The Summary Compensation Table indicates a value of $11,778,961 (comprised of $9,395,636 for PSUs and $2,383,326 for RSUs), the
PSU value is above the target value awarded due to the estimated projected accounting value (or Fair Value) for the 2016 Performance-Leveraged Stock Unit (PSU) grant (payable in 2019) which resulted from the Monte Carlo
simulation model (consistent with U.S. GAAP accounting standards for valuing performance stock awards). Due to the increase and volatility in Newmonts stock price during the first quarter of 2016, the model projected a 2019 payout or
performance result of 151.4% of target value. This estimated future value is the required amount to disclose in the Summary Compensation Table.
The following table is intended to clarify the decision by the LDCC in 2016, illustrating the value the LDCC utilized for the award versus the projected estimated stock value provided in the Summary Compensation
Table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016-2018 Performance Stock Unit
Value Comparison
|
|
Target Shares
Granted
(vesting 2019
subject to
performance)
|
|
|
Price Used to Value the PSU Grant
|
|
|
Comparison of
the Valuation
Approaches
for the PSU
Award
|
|
|
|
Price Used to
Determine Target
Shares Granted
(vesting 2018)
|
|
|
Newmonts
Stock
Price on
December 30,
2016
|
|
|
Fair Value
per share
Based on the
Monte Carlo
Projected
Value
a
|
|
|
Target Value as Awarded by the LDCC
|
|
|
250,350
|
|
|
|
$19.04
|
|
|
|
|
|
|
|
|
|
|
|
$4,766,664
|
|
Realizable Value as of December 30, 2016
|
|
|
250,350
|
|
|
|
|
|
|
|
$34.07
|
|
|
|
|
|
|
|
$8,529,425
|
|
2016 Fair Value
(projected) in Accordance with Disclosure Requirements
|
|
|
250,350
|
|
|
|
|
|
|
|
|
|
|
|
$37.53
|
|
|
|
$9,395,636
|
|
|
(a)
|
In comparison, the 2014 and 2015 Fair Value per share result from the Monte Carlo simulation was $27.20 and $41.85, respectively
|
If the PSUs awarded to Mr. Goldberg achieve the value disclosed in the Summary Compensation Table, the stock price performance required to meet
this level of payout would be an absolute shareholder return of 51% or a combination of above-peer group performance and shareholder return. If the Summary Compensation Table value is used to assess Mr. Goldbergs PSU value, then the stock
price performance required to result in this level of compensation should be assumed. (Details for the PSU program are provided in the CD&A.)
Refer
to the Compensation Discussion and Analysis section of this Proxy Statement for a description of the components of compensation, along with a description of all material terms and conditions of each component. In 2016, the Salary and Bonus columns
accounted for 8% of Mr. Goldbergs total compensation as reflected in the Summary Compensation Table. The Salary and Bonus columns accounted for 34%, 8%, 10%, 19%, and 10% of Ms. Bueses, Mr. Engels,
Mr. Gottesfelds, Mr. Palmers and Ms. Brlas total compensation, respectively, as reflected in the Summary Compensation Table.
68
Newmont Mining Corporation 2017 Proxy Statement
2016 ALL OTHER COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Company
Contributions
to
Defined Benefit Plans
(1)
($)
|
|
|
Change in Value
of Post-Retirement
Medical and Life
Insurance
(2)
($)
|
|
|
Perquisites
(3)
($)
|
|
|
Relocation
Reimbursement
and Tax
Gross-Ups
(4)
($)
|
|
|
Termination
Payments
(5)
($)
|
|
|
Total
($)
|
|
Gary Goldberg
|
|
|
$15,900
|
|
|
|
$81,471
|
|
|
|
$12,205
|
|
|
|
|
|
|
|
|
|
|
|
$109,576
|
|
Nancy Buese
|
|
|
|
|
|
|
$3,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$3,332
|
|
Randy Engel
|
|
|
$15,900
|
|
|
|
$27,102
|
|
|
|
$15,540
|
|
|
|
|
|
|
|
|
|
|
|
$58,542
|
|
Stephen Gottesfeld
|
|
|
$15,900
|
|
|
|
$27,282
|
|
|
|
$14,403
|
|
|
|
|
|
|
|
|
|
|
|
$57,585
|
|
Tom Palmer
|
|
|
$10,385
|
|
|
|
$45,360
|
|
|
|
|
|
|
|
$235,688
|
|
|
|
|
|
|
|
$291,433
|
|
Laurie Brlas
|
|
|
$15,900
|
|
|
|
|
|
|
|
$13,768
|
|
|
|
|
|
|
|
1,075,000
|
|
|
|
$1,104,668
|
|
(1)
|
Under the Companys defined contribution plan, the Savings Plan, the Company will match 100% of the first 6% of a participants base salary
contribution to the Savings Plan annually with a maximum match of $15,900.
|
(2)
|
Messrs. Engel and Gottesfeld are eligible for retiree medical, having been employed before January 1, 2003. Mr. Goldberg, Ms. Buese, Messrs.
Engel, Gottesfeld and Palmer are eligible for officer death benefits post-employment if they attain a total of 75 by adding age and years of service by retiring at the date of unreduced pension (65 years of age for Mr. Goldberg, 65 years of age
for Ms. Buese, 59.667 years of age for Mr. Engel, 57.667 years of age for Mr. Gottesfeld, and 65 years of age for Mr. Palmer).
|
(3)
|
The Company provides the named executive officers with the opportunity to obtain financial advisory services up to a value of $15,700, paid by the Company and
executive health assessment benefits with a maximum value of approximately $5,000. These amounts are not grossed up for taxes and any executive electing to obtain the services is responsible for the personal tax liability associated with the imputed
income for the benefit. Mr. Goldbergs perquisite consists of $9,405 for financial advisory services and $2,800 for the executive health assessment. Mr. Engels perquisite consists of $11,843 for financial advisory services,
$1,850 for the executive health assessment, and $1,848 for personal administrative services provided by Company staff. Mr. Gottesfelds perquisite consists of $11,843 for financial advisory services and $2,560 for the executive health
assessment. Ms. Brlas perquisite consists of $13,768 for personal administrative services provided by Company staff.
|
(4)
|
For Mr. Palmer, this amount includes $87,593 in relocation costs, $9,400 in imputed income for expenses related to an automobile lease, $84,573 in tax
gross-up
payments related to imputed income for relocation benefits, and $73,736 for the payout of his annual leave balance upon transitioning from Australia to U.S. employment. These amounts are in accordance with
the Companys standard relocation policies.
|
(5)
|
Amount shown represents severance benefits under the Executive Severance Plan of Newmont in the amounts of: $1,050,000 and $25,000 related to a payroll cycle for
2017 accelerated into 2016.
|
Newmont Mining
Corporation 2017 Proxy Statement
69
2016 GRANTS OF PLAN-BASED AWARDS TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
Under
Non-Equity
Incentive Plan
Awards
(1)
|
|
|
Estimated Future Payouts
Under
Equity Incentive Plan
Awards
(2)
|
|
|
All
Other
Stock
Awards:
Number
of
Shares
of
Stock
or
Units
(#)
|
|
|
Grant Date
Fair
Value
of
Stock and
Option
Awards
(3)
($)
|
|
Name
|
|
Grant
Date
|
|
|
Threshold
($)
|
|
|
Target
($)
|
|
|
Maximum
($)
|
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
|
Gary Goldberg
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 AICP Corporate Performance & Personal Bonus
|
|
|
|
|
|
|
$266,856
|
|
|
|
$1,906,113
|
|
|
|
$3,812,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 PSU (payable 2019)
|
|
|
2/22/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
250,350
|
|
|
|
500,700
|
|
|
|
|
|
|
|
$9,395,636
|
|
2016 RSU
|
|
|
2/22/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96,160
|
|
|
|
$2,383,326
|
|
Nancy Buese
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 AICP Corporate Performance & Personal Bonus
|
|
|
|
|
|
|
$12,721
|
|
|
|
$90,865
|
|
|
|
$181,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 RSU (fully vests 2021)
|
|
|
11/1/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68,692
|
|
|
|
$2,599,992
|
|
Randy Engel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 AICP Corporate Performance & Personal Bonus
|
|
|
|
|
|
|
$79,027
|
|
|
|
$564,477
|
|
|
|
$1,128,953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 PSU (payable 2019)
|
|
|
2/22/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
66,176
|
|
|
|
132,352
|
|
|
|
|
|
|
|
$2,483,585
|
|
2016 RSU
|
|
|
2/22/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,418
|
|
|
|
$629,985
|
|
2016 RSU (fully vests 2021)
|
|
|
2/22/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,520
|
|
|
|
$1,499,988
|
|
Stephen Gottesfeld
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 AICP Corporate Performance & Personal Bonus
|
|
|
|
|
|
|
$60,937
|
|
|
|
$435,263
|
|
|
|
$870,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 PSU (payable 2019)
|
|
|
2/22/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
48,686
|
|
|
|
97,372
|
|
|
|
|
|
|
|
$1,827,186
|
|
2016 RSU
|
|
|
2/22/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,700
|
|
|
|
$463,480
|
|
2016 RSU (fully vests 2021)
|
|
|
2/22/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,346
|
|
|
|
$999,976
|
|
Thomas Palmer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 AICP Corporate Performance & Personal Bonus
|
|
|
|
|
|
|
$65,439
|
|
|
|
$467,423
|
|
|
|
$934,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 PSU (payable 2019)
|
|
|
2/22/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
91,911
|
|
|
|
183,822
|
|
|
|
|
|
|
|
$3,449,420
|
|
2016 RSU
|
|
|
2/22/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,303
|
|
|
|
$874,985
|
|
Laurie Brlas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 AICP Corporate Performance & Personal Bonus
|
|
|
|
|
|
|
$98,000
|
|
|
|
$700,000
|
|
|
|
$1,400,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 PSU (payable 2019)
|
|
|
2/22/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
91,911
|
|
|
|
183,822
|
|
|
|
|
|
|
|
$3,449,420
|
|
2016 RSU
|
|
|
2/22/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,303
|
|
|
|
$874,985
|
|
(1)
|
Amounts shown represent threshold, target and maximum amounts for 2016 Corporate & Personal Bonuses. The Corporate Performance Bonus has a threshold of
20% payout, with the potential to have a zero payout, and the Personal Bonus has no threshold. The Leadership Development and Compensation Committee established the target for corporate metrics and personal objectives in March 2016. Payments of
Corporate Performance & Personal Bonuses for 2016 performance are shown in the
Non-Equity
Incentive Plan Compensation column of the Summary Compensation Table. Refer to the Compensation Discussion and
Analysis for a description of the criteria for payment of Corporate Performance & Personal Bonuses. Ms. Bueses 2016 AICP Corporate Performance & Personal Bonus is based on the start date of October 31, 2016.
|
(2)
|
Amounts shown represent the threshold, target and maximum number of shares of the Performance Leveraged Stock Unit bonuses potentially awardable for the targets
set in 2016, which will pay out in 2019. See the Compensation Discussion and Analysis for a description of these awards and the rationale.
|
(3)
|
Amounts shown represent the aggregate grant date fair value computed in accordance with the Financial Accounting Standards Board (FASB) Accounting
Standards Codification Topic 718 (ASC 718). For the restricted stock units, the grant date fair value is the target number of shares granted multiplied by the fair market value on the date of grant. The Companys 2005 and 2013 Stock
Incentive Plans define fair market value of the stock as the average of the high and low sales price on the date of the grant, which is the grant date fair value for the restricted stock units. The fair market value on the date of grant,
February 22, 2016, was $24.785, and the grant values are shown in the Stock Awards column of the Summary Compensation Table. The restricted stock unit awards vest
pro-ratably
over three years, with the
exception of one award to Mr. Engel of 60,520 units that will cliff vest in full in 2021, one award to Mr. Gottesfeld of 40,346 that will cliff vest in full in 2021, and one award to Ms. Buese of 68,692 granted November 1, 2016
with fair market value of $37.85 that will vest ratably over two years. See the Compensation Discussion and Analysis for a description of this award and the rationale. Pursuant to ASC 718, the aggregate grant date fair value of Performance Leveraged
Stock Units is determined by multiplying the target number of shares by a Monte Carlo grant date fair value $37.53 for the 2016-2019 (payout 2019) Performance Leveraged Stock Unit grant, and such amounts are shown in the Stock Awards column of the
Summary Compensation Table.
|
70
Newmont Mining Corporation 2017 Proxy Statement
2016 OUTSTANDING EQUITY AWARDS AT FISCAL
YEAR-END
TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
(1)
(#)
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
|
|
|
Option
Exercise
Price
($)
|
|
|
Option
Grant
Date
|
|
|
Option
Expiration
Date
|
|
|
Number of
Shares or
Units of
Stock That
Have
Not Vested
(#)
|
|
|
Market
Value of
Shares
or
Units
of
Stock
that
Have Not
Vested
($)
(2)
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units
or
Other
Rights
that
Have
Not Vested
(#)
(3)
|
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value
of
Unearned
Shares,
Units
or Other
Rights
that
Have Not
Vested
($)
(2)
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
|
|
|
|
|
|
Gary Goldberg
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,827
|
(4)
|
|
|
$1,629,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96,160
|
(5)
|
|
|
$3,276,171
|
|
|
|
|
|
|
|
|
|
2014-2017 PSU (payout 2017)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
139,523
|
|
|
|
$4,753,549
|
|
2014 SSU (payout 2015-2017)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,106
|
|
|
|
$787,221
|
|
2015-2018 PSU (payout 2018)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
182,058
|
|
|
|
$6,202,716
|
|
2016-2019 PSU (payout 2019)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,350
|
|
|
|
$8,529,425
|
|
Nancy
Buese
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68,692
|
(6)
|
|
|
$2,340,336
|
|
|
|
|
|
|
|
|
|
Randy Engel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,066
|
(4)
|
|
|
$547,369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,418
|
(5)
|
|
|
$865,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,520
|
(7)
|
|
|
$2,061,916
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
$44.49
|
|
|
|
4/28/2008
|
|
|
|
4/28/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,863
|
|
|
|
|
|
|
|
$39.95
|
|
|
|
5/4/2009
|
|
|
|
5/4/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,982
|
|
|
|
|
|
|
|
$55.68
|
|
|
|
4/29/2010
|
|
|
|
4/29/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,000
|
|
|
|
|
|
|
|
$58.69
|
|
|
|
4/25/2011
|
|
|
|
4/25/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014-2017 PSU (payout 2017)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,339
|
|
|
|
$1,578,770
|
|
2014 SSU (payout 2015-2017)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,672
|
|
|
|
$261,385
|
|
2015-2018 PSU (payout 2018)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61,154
|
|
|
|
$2,083,517
|
|
2016-2019 PSU (payout 2019)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,176
|
|
|
|
$2,254,616
|
|
Stephen Gottesfeld
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,740
|
(4)
|
|
|
$399,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,700
|
(5)
|
|
|
$637,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,346
|
(7)
|
|
|
$1,374,588
|
|
|
|
|
|
|
|
|
|
|
|
|
14,000
|
|
|
|
|
|
|
|
$42.06
|
|
|
|
4/30/2007
|
|
|
|
4/30/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
$44.49
|
|
|
|
4/28/2008
|
|
|
|
4/28/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,026
|
|
|
|
|
|
|
|
$39.95
|
|
|
|
5/4/2009
|
|
|
|
5/4/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,494
|
|
|
|
|
|
|
|
$55.68
|
|
|
|
4/29/2010
|
|
|
|
4/29/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,240
|
|
|
|
|
|
|
|
$58.69
|
|
|
|
4/25/2011
|
|
|
|
4/25/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014-2017 PSU (payout 2017)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,046
|
|
|
|
$1,194,017
|
|
2014 SSU (payout 2015-2017)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,802
|
|
|
|
$197,674
|
|
2015-2018 PSU (payout 2018)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,687
|
|
|
|
$1,522,486
|
|
2016-2019 PSU (payout 2019)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,686
|
|
|
|
$1,658,732
|
|
Thomas Palmer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,927
|
(4)
|
|
|
$236,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,303
|
(5)
|
|
|
$1,202,773
|
|
|
|
|
|
|
|
|
|
2014-2017 PSU (payout 2017)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,152
|
|
|
|
$720,649
|
|
2014 SSU (payout 2015-2017)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,502
|
|
|
|
$119,313
|
|
2015-2018 PSU (payout 2018)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,368
|
|
|
|
$898,358
|
|
2016-2019 PSU (payout 2019)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
91,911
|
|
|
|
$3,131,408
|
|
Laurie Brlas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,826
|
(4)
|
|
|
$777,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,303
|
(5)
|
|
|
$1,202,773
|
|
|
|
|
|
|
|
|
|
2014-2017 PSU (payout 2017)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68,146
|
|
|
|
$2,321,734
|
|
2014 SSU (payout 2015-2017)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,282
|
|
|
|
$384,378
|
|
2015-2018 PSU (payout 2018)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
86,891
|
|
|
|
$2,960,376
|
|
2016-2019 PSU (payout 2019)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
91,911
|
|
|
|
$3,131,408
|
|
(1)
|
From 2006 to 2011 stock options were granted one time per year. Stock options were granted two times per year prior to 2006. The Company did not grant stock
options in 2012 or thereafter.
|
(2)
|
Assumes stock price of $34.07, the closing price on December 30, 2016.
|
(3)
|
Target number of Performance Leveraged Stock Unit bonuses are shown for all outstanding targets for which performance and grant are not yet determined, which are
described in the Compensation Discussion and Analysis. The maximum achievable amount of Performance Leveraged Stock Unit bonuses is 200% of target.
|
(4)
|
Vesting dates are February 24, 2017 and 2018.
|
(5)
|
Vesting dates are February 22, 2017, 2018 and 2019.
|
(6)
|
Vesting dates are November 1, 2017 and 2018.
|
(7)
|
Vesting date is February 22, 2021.
|
Newmont Mining
Corporation 2017 Proxy Statement
71
2016 OPTION EXERCISES AND STOCK VESTED TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
Name
|
|
Number of Shares
Acquired on Exercise
(#)
|
|
|
Value Realized
on Exercise
($)
|
|
|
Number of Shares
Acquired on Vesting
(#)
|
|
|
Value Realized
on Vesting
($)
|
|
Gary Goldberg
|
|
|
|
|
|
|
|
|
|
|
124,829
|
|
|
|
$3,234,654
|
|
Nancy Buese
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randy Engel
|
|
|
|
|
|
|
|
|
|
|
41,544
|
|
|
|
$1,076,511
|
|
Stephen Gottesfeld
|
|
|
|
|
|
|
|
|
|
|
20,556
|
|
|
|
$531,580
|
|
Thomas Palmer
|
|
|
|
|
|
|
|
|
|
|
6,965
|
|
|
|
$180,010
|
|
Laurie Brlas
|
|
|
|
|
|
|
|
|
|
|
96,118
|
|
|
|
$3,539,625
|
|
2016 PENSION BENEFITS TABLE
(1)(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Plan Name
|
|
Number
of Years
Credited
Service
(#)
|
|
|
Present
Value
of
Accumulated
Benefit
($)
|
|
|
Payments
During Last
Fiscal Year
($)
|
|
Gary Goldberg
|
|
Pension Plan
|
|
|
5.083
|
|
|
$
|
180,314
|
|
|
|
|
|
|
|
Pension Equalization Plan
|
|
|
5.083
|
|
|
$
|
2,116,789
|
|
|
|
|
|
Nancy Buese
|
|
Pension Plan
|
|
|
0.250
|
|
|
$
|
13,252
|
|
|
|
|
|
|
|
Pension Equalization Plan
|
|
|
0.250
|
|
|
|
|
|
|
|
|
|
Randy Engel
|
|
Pension Plan
|
|
|
23.000
|
|
|
$
|
1,153,545
|
|
|
|
|
|
|
|
Pension Equalization Plan
|
|
|
23.000
|
|
|
$
|
6,815,899
|
|
|
|
|
|
Stephen Gottesfeld
|
|
Pension Plan
|
|
|
19.833
|
|
|
$
|
774,693
|
|
|
|
|
|
|
|
Pension Equalization Plan
|
|
|
19.833
|
|
|
$
|
2,528,906
|
|
|
|
|
|
Thomas Palmer
|
|
Pension Plan
|
|
|
0.667
|
|
|
$
|
24,008
|
|
|
|
|
|
|
|
Pension Equalization Plan
|
|
|
0.667
|
|
|
$
|
74,304
|
|
|
|
|
|
(1)
|
All calculations in the 2016 Pension Benefits Table were calculated using target Corporate Performance Bonus and target Personal Bonus for 2016.
|
(2)
|
Ms. Brlas separated from the Company on December 31, 2016. She did not have
five years of service with the Company, and therefore did not have any vested benefits under either the Pension Plan or the Pension Equalization Plan.
|
The Company provides two
tax-qualified
retirement plans, a Pension Plan and a Savings Plan (401(k) plan). In addition, the Company offers a
non-qualified
pension plan (the Pension Equalization Plan), and
non-qualified
savings plan (the Savings Equalization Plan) for executive grade level
employees.
Pension Plan.
Mr. Goldberg, Ms. Buese, Mr. Engel, Mr. Gottesfeld and Mr. Palmer are participants
in the qualified Pension Plan. The Pension Plan is available to a broad group of Company employees, which generally includes U.S. domestic salaried employees of the Company. The plan provides for post-retirement payments determined by a formula
based upon age, years of service and pension-eligible earnings for employees hired before January 1, 2007, called the final average pay calculation, up to July 2014. For employees hired after January 1, 2007 and for all participants
accruing benefits beginning July 2014 including those formerly in the final average pay pension plan, the plan provides for post-retirement payments determined by a formula based upon years of service.
72
Newmont Mining Corporation 2017 Proxy Statement
Final Average Pay Calculation.
As of July 2014, all employees accrue pension benefits in the stable
value pension. However, those employees hired before January 1, 2007 retain previously accrued benefits in the final average pay pension. Age 62 is the normal retirement age under the Pension Plan for final average pay calculation, meaning
the age upon which the employee may terminate employment and collect benefits, or a participant may retire at age 55 with 10 years of service and collect reduced benefits immediately. If a Pension Plan participant terminates employment
prior to age 55, but has a vested benefit by having acquired 5 years of service with the Company, the participant will begin to collect a benefit at age 62. If the participant terminates employment prior to age 55, but has 10 or
more years of service with the Company, the participant may elect to collect a reduced benefit at age 55. If a participant attains the age of 48, has 10 years of service, and is terminated from employment within 3 years of a change of
control, the participant is entitled to commence benefits. The Pension Plan utilizes the same definition of change of control as the Executive Change of Control Plan. The formula based upon age and years of service for benefits provides a strong
incentive for Company employees to remain employed with the Company, even in times of high demand in the employment marketplace.
According to the
Pension Plan, at the normal retirement age of 62, the Company calculates the monthly pension benefit amount through the following formula:
1.75% of the average monthly salary
minus (-)
1.25% of the participants primary social security benefit
times
(×) the participants years of credited service
To determine the average monthly salary, the Company calculates the highest average
from 5 consecutive prior years of employment within the last 10 years of employment of regular pay, vacation pay, cash bonus and a change of control payment, if applicable. Severance payments are not included as pensionable earnings. Salary
does not include stock based compensation, foreign assignment premiums, signing bonuses, fringe benefits, payments from
non-qualified
plans or indemnity benefit payments. In the event a vested participant dies
prior to the commencement of benefit payments, the participants legal spouse receives survivor benefits which are calculated based upon the pension benefit that the participant would have received upon retirement the day prior to death with an
additional reduction factor applied. If the participant does not have a legal spouse, there is no benefit paid.
In the event of early retirement,
meaning after reaching the age of 55 and at least 10 years of service, a participant is eligible to collect a monthly pension benefit upon retirement using the formula above with the following reductions:
EARLY RETIREMENT REDUCTIONS
|
|
|
|
|
Age at
Termination
|
|
Years of
Service
|
|
Reduction
|
55
|
|
At least 30
|
|
No reduction payable upon termination
|
60
|
|
At least 10
|
|
Lesser of 1/3 of 1% for each month of service less than 30 years of service (4% per year) or 1/3 of 1% for each month by
which the date of benefit commencement precedes age 62 (4% per year) payable upon termination
|
At least 55
|
|
At least 10
|
|
1/3 of 1% for each month by which the date of benefit commencement precedes age 62 (4% per year) payable upon
termination
|
Under 55
|
|
At least 10
|
|
1/2 of 1% for each month by which the date of benefit commencement precedes age 62 (6% per year) payable following termination and
attainment of age 55
|
|
|
At least 30
|
|
No reduction payable at age 55
|
CHANGE OF CONTROL EARLY RETIREMENT
|
|
|
|
|
Age
|
|
Years of
Service
|
|
Reduction
|
48 at time of change of
control
|
|
At least 10
|
|
Lower reduction of 2% for each year by which termination precedes age 62, or applicable reduction
above
|
Newmont Mining
Corporation 2017 Proxy Statement
73
STABLE VALUE CALCULATION
For the stable value pension, benefits are determined as follows:
|
|
|
|
|
|
|
|
|
Full Years of Services Completed by the end of the Plan
Year
|
|
Percentage of Salary up
to and including Social
Security Wage
Base
|
|
|
|
Percent of Salary
Over the Social
Security Wage Base
|
|
|
0-9
|
|
13%
|
|
|
|
21%
|
|
|
10-19
|
|
15%
|
|
|
|
23%
|
|
|
20+
|
|
17%
|
|
|
|
25%
|
|
|
The stable value benefit, as of a given date, is the sum of all of the amounts accrued for each year of service. Salary in the
stable value pension is defined the same as in the final average pay pension. Normal retirement age under the stable value pension is 65 and the vesting period is 5 years. If a stable value participant has 5 years of service and separates
employment with Newmont prior to age 65, the participant is entitled to a reduced benefit. Under the stable value pension, participants may take their benefit in lump sum or an annuity.
Messrs. Engel and Gottesfeld have vested benefits under the final average pay (for service prior to July 2014) and the stable value (for service after July 2014) pensions by virtue of five or more years of
service. Mr. Goldberg, Ms. Buese, and Mr. Palmer participate in the stable value calculation of the Pension Plan of Newmont based upon their dates of hire. Mr. Goldberg has vested benefits under the stable value pension by virtue
of five or more years of service. Ms. Buese and Mr. Palmer do not have vested benefits under the Pension Plan, as they do not have five years of service with the Company.
The Pension Plan contains a cap on eligible earnings as required by the Internal Revenue Code as well as a cap on benefits as required by section 415 of the Internal Revenue Code. This cap limits the pension
benefits that executive-grade employees of the Company can receive under the Pension Plan.
Pension Equalization Plan.
The Pension
Equalization Plan provides for an actuarially determined present value cash lump sum amount upon retirement, or upon termination after 5 years of service with the Company. The Company determines the lump sum amount by calculating a full pension
benefit under the Pension Plan, utilizing the definition of Salary from the Pension Equalization Plan, and subtracting the actual benefit owed under the Pension Plan that is subject to the cap in benefits.
If a participant dies while employed with the Company, or after retirement but before receipt of benefits under the Pension Equalization Plan, and the participant
was entitled to benefits under the Pension Plan, the participants legal spouse receives survivor benefits which are calculated based upon the full Pension Equalization benefit minus the Pension Plan benefit amount. If the Company terminates a
participant for cause, the participant forfeits all benefits under the Pension Equalization Plan.
Pension Calculation
Assumptions.
For final average pay benefits, the qualified pension present value uses a discount rate at December 31, 2016, of 4.36% and FASB mortality. The final average pay pension equalization value uses a pension equalization
plan lump sum rate of .75% as of December 31, 2016, and mortality as defined in the Pension Equalization Plan to determine the lump sum payable at an executives earliest unreduced retirement age. For stable value benefits, from the
qualified plan and the pension equalization plan are defined as a lump sum at age 65, the age at which the stable value benefits are unreduced. All of the benefits shown are also discounted from the earliest unreduced retirement age to current age
using the FASB rate of 4.36%.
2016 NONQUALIFIED DEFERRED COMPENSATION TABLE
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Executive
Contributions
in Last Fiscal Year
($)
|
|
|
Registrant
Contributions
in Last Fiscal Year
($)
|
|
|
Aggregate
Earnings
in Last Fiscal Year
($)
|
|
|
Aggregate
Withdrawals /
Distributions
($)
|
|
|
Aggregate
Balance at
Last Fiscal Year-End
($)
|
|
Gary Goldberg
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nancy Buese
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randy Engel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen Gottesfeld
|
|
|
|
|
|
|
|
|
|
|
$4,732
|
|
|
|
|
|
|
|
$34,508
|
|
Thomas Palmer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Ms. Brlas separated from the Company on December 31, 2016. She did not participate in the Savings Equalization Plan during her employment.
|
74
Newmont Mining Corporation 2017 Proxy Statement
Amounts shown in the table above are part of the Companys Savings Equalization Plan. The Company maintains a
Savings Plan and a Savings Equalization Plan for eligible employees.
Savings Plan.
The Savings Plan is the Companys defined
contribution plan that is available to a broad group of Company employees, which generally includes U.S. domestic salaried employees of the Company. The Savings Plan provides that eligible employees may contribute
before-tax
or
after-tax
compensation to a plan account for retirement savings. Under the Savings Plan, the Company will match 100% of the first 6% of a
participants base salary (with a maximum of $265,000 in salary and a maximum match of $15,900) contribution to the Savings Plan annually. The Company contribution vests as follows:
SAVINGS PLAN VESTING SCHEDULE
|
|
|
|
|
Years of Service
|
|
Percentage of Company
Contribution Vested
|
|
Less than 1 year
|
|
|
0
|
|
1 year
|
|
|
20
|
|
2 years
|
|
|
40
|
|
3 years
|
|
|
60
|
|
4 or more years
|
|
|
100
|
|
In the event of death, disability, retirement, change of control (same definition as Executive Change of Control Plan explained in
the Potential Payments Upon Termination or Change of Control section below) or termination of the Savings Plan, a participant is fully vested in the Company contribution component of the Savings Plan. In accordance with the Internal Revenue Code,
the Savings Plan limits the
before-tax
and
after-tax
contributions that highly compensated participants may make to the Savings Plan.
Savings Equalization Plan.
The Savings Equalization Plan allows eligible participants the opportunity to defer up to 100% of compensation (minus
before-tax
contributions under the Savings Plan) beyond the Internal Revenue Code limitations set forth in the Savings Plan on a
pre-tax
basis. The Savings Equalization Plan
is a
non-qualified
deferred compensation plan. To participate in the Savings Equalization Plan, an employee must be executive grade or a grandfathered participant and be eligible to participate in the Savings
Plan of Newmont. The purpose of the Savings Equalization Plan is to allow executive grade level employees a way to defer additional compensation for post-employment savings purposes beyond the limits set forth in the Savings Plan. A
participants deferred compensation is contributed at the direction of the participant to various hypothetical investment alternatives. Such investments are selected by a committee of Company representatives, with the advice of professional
investment managers.
Upon distribution of Savings Equalization Plan accounts, the participant receives a cash amount equal to the value of the
contributions if such contributions had been invested in such hypothetical investments, as of the applicable valuation date. A participant receives distribution of Savings Equalization amounts in
lump-sum
form, or at a
pre-selected
distribution date in the future according to the provisions of the plan and 409A.
In
early 2010, the Company established a trust for participants account balances in the Savings Equalization Plan and the Company funds the participant account balances in the trust. The assets held in this trust may be subject to claims of the
Companys creditors in the event the Company files for bankruptcy.
Potential Payments Upon Termination or Change of Control
Terms of Plans:
See the Compensation Discussion and Analysis section and the text following the tables for a description of the material terms,
conditions and assumptions for any of the Companys benefit plans.
Retirement Benefits:
Messrs. Goldberg, Engel and
Gottesfeld have vested benefits under the Pension Plan and Pension Equalization Plan. Ms. Buese and Mr. Palmer have not yet vested in the Pension Plan or the Pension Equalization Plan as they have not attained 5 years of service. See the
Pension Benefits Table for the present value of benefits under these plans.
Voluntary Termination:
The Named Executive Officers would
receive no payments or other benefits upon voluntary termination, except for vested benefits under the Pension Plan and Pension Equalization Plan. See the Pension Benefits Table for the present value of benefits under these plans.
Termination Not For Cause:
On October 25, 2011, the Board of Directors and the Compensation Committee of the Board adopted an Executive
Severance Plan applicable to the Senior Director and above levels of the
Newmont Mining
Corporation 2017 Proxy Statement
75
Company. Under the Executive Severance Plan, any eligible employee who is subject to involuntary termination of employment for any reason other than cause is entitled to severance benefits. Cause
is defined as engagement in illegal conduct or gross negligence, or willful misconduct or any dishonest or fraudulent activity, breach of any contract, agreement or representation with the Company, or violation of Newmonts Code of Conduct.
Severance benefits consist of: 1) a fixed number of months of base salary; 2)
pro-rated
actual bonus (this benefit is contained in the bonus plan); 3) medical benefits for the severance period, not to exceed
18 months; and 4) outplacement services for up to 18 months. The range of fixed number of months of base salary for the Named Executive Officers is 24 months of salary for Mr. Goldberg, 15 months of salary + 1 month of salary for every year of
service up to a maximum of 18 months of salary for Ms. Buese, Mr. Engel, Mr. Gottesfeld and Mr. Palmer. For equity grants in the case of separation of employment under the Executive Severance Plan, there shall be a
pro-rata
percent acceleration of restricted stock units that have already been granted. For Performance Leveraged Share Unit bonus granted prior to 2015, there shall be a
pro-rata
grant of any Performance Leveraged Share Unit bonus that is beyond the first performance year in the lesser amount of target or actual payout. For Performance Leveraged Share Unit bonus granted
beginning in 2015 and forward, there shall be a
pro-rata
payout based upon the most recent calculation of the performance against the metrics. The calculations below in the termination tables utilize the
target payout for Performance Leveraged Share Unit bonuses.
Termination For Cause:
No additional benefits are payable in any case of
termination for cause. The Companys plans generally define cause as stated above.
Change of Control:
Acceleration of any equity
grant requires a double-trigger of a change of control and a termination of employment. The cash bonus plan provides for payment of target Corporate Performance Bonus and Personal Bonus upon a change of control between September 1 and
December 31, and a target
pro-rata
bonus payment in the event of a change of control between January 1 and August 31. The final average pay Pension Plan (applicable only to Messrs. Engel and
Gottesfeld) provides a retirement option at age 48 with 10 years of service and a lesser reduction factor in benefits, compared to circumstances not involving a change of control. Additionally, the Savings Plan provides for immediate
vesting of the Company matching contributions which is capped at a total of $15,900 per year.
The Companys Executive Change of Control Plan
applies to Senior Director level employees and above, including the Officers, in the event of a change of control, which is generally defined as:
1)
|
The acquisition of beneficial ownership of 20% or more of either (a) the then outstanding shares of the Company; or (b) the combined voting power of the then
outstanding shares of the Company entitled to vote generally in the Election of Directors (but not an acquisition by a Company entity or Company benefit plan); or
|
2)
|
The individuals constituting the Companys Board of Directors on January 1, 2008 (for 2008 Executive Change of Control Plan) and January 1, 2012 (for 2012
Executive Change of Control Plan), cease to constitute at least a majority of the Board, with certain exceptions allowing the Board the ability to vote in new members by a majority; or
|
3)
|
Consummation of a reorganization, merger, consolidation, sale or other disposition of all or substantially all of the assets of the Company or an acquisition of assets of another
corporation. The acquisition of assets of another corporation does not constitute a change of control if certain requirements are met to evidence that the Company is the acquiring company and will conduct the business of the combined entity going
forward.
|
Termination After Change of Control:
Messrs. Goldberg, Engel and Gottesfeld are subject to the 2008 Executive
Change of Control Plan and Ms. Buese and Mr. Palmer are subject to the 2012 Executive Change of Control Plan. The plans provide for enhanced benefits in the case of termination following change of control of the Company (within three years
for the 2008 plan and within two years for the 2012 plan), in most cases based on salary and bonus payments in previous years.
76
Newmont Mining Corporation 2017 Proxy Statement
Executives are eligible for benefits under the change of control plans if terminated within the requisite time period
of a change of control or if the executive terminates for good reason within the requisite time period of a change of control. The Change of Control Plans generally define good reason as any of the following without the executives prior
consent: (a) material reduction in salary or bonus compensation from the level immediately preceding the change of control; (b) requiring the executive to relocate his or her principal place of business more than 35 miles (50 miles in
the 2012 Executive Change of Control Plan) from the previous principal place of business; (c) failure by the employer to comply with the obligations under the Change of Control Plan; or (d) assigning the executive duties inconsistent with
the executives position immediately prior to such assignment or any action resulting in the diminution of the executives position, authority, duties or responsibilities.
If an executive is eligible for termination benefits under the Executive Change of Control Plan, the executive is entitled to:
|
|
pro-rated
bonus determined by percentage of the year worked at target level (or the full target bonus if change of
control occurs between September 1 and December 31 according to the cash bonus plan);
|
|
|
2 times the annual pay for most executives and up to 3 times for individuals specified by the Board. Annual pay is defined as annual salary, annual
cash bonus at the highest amount that the executive received in the three years prior to the change of control, and the highest employer matching contribution made to the Savings Plan on behalf of the executive in the three years prior to the change
of control;
|
|
|
for a three-year period (or the COBRA period for the 2012 Executive Change of Control Plan), health, dental, vision, prescription and life insurance benefits for
the executive and his or her family; and
|
|
|
outplacement services consistent with the Companys practices during the
one-year
period prior to the change of
control.
|
For participants in the 2008 Executive Change of Control Plan, the executive is entitled to the following additional
benefits:
|
|
a cash amount equal to the actuarial equivalent of three years of additional benefits under the Pension Plan, Pension Equalization Plan, Savings Equalization
Plan and credit for three additional years under these plans for purposes of actuarial calculations; and
|
|
|
certain
gross-up
payments for excise taxes on the change of control payment.
|
Messrs. Goldberg, Engel and Gottesfeld participate in the 2008 Executive Change of Control Plan at three times annual pay level as of December 31, 2016.
Ms. Buese and Mr. Palmer participate in the 2012 Executive Change of Control Plan with Ms. Buese at two and one half times annual pay level and Mr. Palmer at three times annual pay level as of December 31, 2016. These
individuals are designated for the enhanced benefits because they all hold positions that would require continuity during a change of control or threatened change of control. In addition, the positions that the designated individuals hold are at
high risk for change of personnel in the event of a change of control and the enhanced benefit provides additional incentive for such executives to stay with the Company despite any concerns regarding a change of control.
An unvested participant of the pension plan who is separated from employment following a change of control vests in the pension plan. See the Pension Benefits Table
and following text for pension values and unvested participants.
Death:
Upon the death of one of the Named Executive Officers,
payment is made to the estate based on the terms of the Officers Death Benefit Plan. The Officers Death Benefit Plan provides for a cash payment upon the death of currently employed executive-level officers of the Company, as well as
eligible (eligibility acquired prior to January 1, 2017) retired executive-level officers. The Officer Death Benefit Plan provides a lump sum cash benefit paid by the Company upon death as follows:
|
|
3 times final annual base salary for an executive officer who dies while an active employee;
|
|
|
1 times final annual base salary for an eligible executive officer who dies after retiring at or after normal retirement age; and
|
|
|
30% to 90% of final annual base salary for an eligible executive officer who dies after separating employment but who retired prior to normal retirement age,
depending on the number of years remaining to normal retirement age.
|
Newmont Mining
Corporation 2017 Proxy Statement
77
As of December 31, 2016, Mr. Goldberg, Ms. Buese, Mr. Engel, Mr. Gottesfeld and
Mr. Palmer were currently employed executive-level officers of the Company, and thus eligible for the Officer Death Benefit Plan. In the event of death during employment an unvested participant of the pension plan who dies while employed vests
in the pension plan. See the Pension Benefits Table and following text for pension values and unvested participants.
Disability:
Short-term disability benefits provide for 100% of base pay (salary and bonus) for the initial eight weeks of disability and 60% of
base pay for the remainder of short-term disability for a total period of up to six months. In the event of long-term disability, the Company has an insurance plan that provides a maximum monthly benefit to executives and officers of the Company of
$15,000 per month. The maximum benefit period for the long-term disability benefit varies depending upon the age on date of disability.
2016
Performance Bonuses:
All amounts shown for Bonuses include Corporate Performance Bonuses, Personal Bonuses, Performance Leveraged Stock Unit bonuses, Restricted Stock Unit bonuses and are calculated at target level for 2016 performance.
Accelerated Vesting of Restricted Stock:
The amounts shown assume vesting as of December 30, 2016, of restricted stock units at the
December 30, 2016, closing price of $34.07. The amounts shown do not include any vested stock awards.
Performance Leverage Stock Unit
Bonus:
The amounts shown for the Performance Leveraged Stock Unit Bonus in the event of a Change of Control assume target payout and a stock price of $34.07, the December 30, 2016, closing price, because there is no change of control
price to determine actual payout, as contemplated by the PSU program.
Restricted Stock Unit Bonus:
The amounts shown for the Restricted
Stock Unit Bonus in the event of termination following a change of control represent the target bonus granted upon a change of control for the year of the change of control in the form of restricted stock units that are then subject to a vesting
period beginning with
one-third
vesting the following January 1 and the following
two-thirds
each vesting with the two anniversaries after the initial vesting. The
vesting accelerates upon a termination of employment after a change of control. The figures shown represent target payout and a stock price of $34.07, the December 30, 2016, closing price.
Incremental
Non-Qualified
Pension:
The amounts shown as Incremental
Non-Qualified
Pension are based on three additional years of service credit following termination of employment in the case of change of control for those Named Executive Officers who participate in the 2008
Executive Change of Control Plan. All amounts payable are based upon the same assumptions and plan provisions used in the Summary Compensation Table and Pension Benefits Table, except that the Termination After Change of Control calculation does not
include a present value discount.
Health Care Benefits:
The value of health care benefits disclosed below is based on the incremental
additional cost to the Company for the length of coverage specified in the Executive Severance Plan of Newmont or the Executive Change of Control Plans, except that for Change of Control, the amount is determined without any present value discount.
Life Insurance:
Life insurance coverage and proceeds are provided under the terms of the Officers Death Benefit Plan.
78
Newmont Mining Corporation 2017 Proxy Statement
280G Tax
Gross-Up:
The Company adopted an Executive Change
of Control Plan in 2012 that eliminates a 280G tax
gross-up,
and provides for the payment of the higher of the change of control payment with the application of the excise tax imposed by Section 4999 of
the Code, or a reduced change of control payment to an amount at which the excise tax does not apply. For named Executive Officers eligible for benefits under the 2008 Change of Control Plan (which has been frozen to new participants as of
January 1, 2012), the Company has agreed to reimburse the executive for all excise taxes that are imposed on the executive under Section 280G and any income taxes and excise taxes that are payable by the executive as a result of any
reimbursements for Section 280G taxes, if payment to an individual beneficiary exceeds 110% of the safe harbor under Section 4999. If the payment to the individual does not exceed 110% of the safe harbor under Section 4999, the change
of control benefit will be reduced to fall within the safe harbor, rather than providing an excise tax
gross-up.
Any 280G tax
gross-up
amounts reflected in the tables
below assume that the executive is entitled to a full reimbursement by the Company of any (a) excise taxes that are imposed on the executive as a result of the change of control, (b) any income and excise taxes imposed on the executive as
a result of the Companys reimbursement of the excise tax amount, and (c) any additional income taxes and excise taxes that are imposed on the executive as a result of the Companys reimbursement to the executive for any excise or
income taxes. The calculation of the 280G
gross-up
amount in the tables below is based upon a 280G excise tax rate of 20%, a 39.6% federal income tax rate, a 2.35% Medicare tax rate and a 4.63% state income
tax rate. For purposes of the Section 280G calculation, it is assumed that no amounts will be discounted as attributable to reasonable compensation and no value will be attributed to the executive executing a
non-competition
agreement. For any employee hired or promoted into an executive position after January 1, 2012, the Company does not provide a 280G tax
gross-up
benefit.
Newmont Mining
Corporation 2017 Proxy Statement
79
The following tables describe the estimated potential payments upon termination or change of control of the Company
for the Named Executive Officers. The amounts shown assume that the termination or change of control occurred on December 31, 2016. The actual amounts to be paid can only be determined at the time of such executives separation from the
Company.
POTENTIAL PAYMENTS ON TERMINATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
Not For Cause
($)
|
|
|
Change
of
Control
($)
|
|
|
Termination
After
Change
of
Control
($)
|
|
|
Death
($)
|
|
|
Disability
($)
|
|
Gary Goldberg
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Benefit
|
|
|
$2,600,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus (Corporate Performance and
Personal)
|
|
|
$1,906,113
|
|
|
|
$1,906,113
|
|
|
|
|
|
|
|
$1,906,113
|
|
|
|
$1,906,113
|
|
Restricted Stock Unit
Bonus
|
|
|
|
|
|
|
|
|
|
|
$2,383,333
|
|
|
|
|
|
|
|
|
|
Performance Leveraged Stock Unit
Bonus
|
|
|
$11,731,766
|
|
|
|
$11,731,766
|
|
|
|
$7,753,923
|
|
|
|
$11,731,766
|
|
|
|
$11,731,766
|
|
Change of Control
Payment
|
|
|
|
|
|
|
|
|
|
|
$11,349,483
|
|
|
|
|
|
|
|
|
|
Accelerated Vesting of Restricted Stock
Units
|
|
|
$2,316,147
|
|
|
|
|
|
|
|
$5,692,859
|
|
|
|
$5,692,859
|
|
|
|
$5,692,859
|
|
Incremental
Non-Qualified
Pension
|
|
|
|
|
|
|
|
|
|
|
$2,344,934
|
|
|
|
|
|
|
|
|
|
Health Care Benefits and Life Insurance
Coverage
|
|
|
$69,871
|
|
|
|
|
|
|
|
$135,834
|
|
|
|
|
|
|
|
|
|
Life Insurance
Proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$3,900,000
|
|
|
|
|
|
Outplacement Services
|
|
|
$14,800
|
|
|
|
|
|
|
|
$14,800
|
|
|
|
|
|
|
|
|
|
280G Tax
Gross-Up
|
|
|
|
|
|
|
|
|
|
|
$21,260,699
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$18,638,697
|
|
|
|
$13,637,879
|
|
|
|
$50,935,865
|
|
|
|
$23,230,738
|
|
|
|
$19,330,738
|
|
Nancy
Buese
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Benefit
|
|
|
$843,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus (Corporate Performance and
Personal)
|
|
|
$90,865
|
|
|
|
$90,865
|
|
|
|
|
|
|
|
$90,865
|
|
|
|
$90,865
|
|
Restricted Stock Unit Bonus
|
|
|
|
|
|
|
|
|
|
|
$2,599,984
|
|
|
|
|
|
|
|
|
|
Performance Leveraged Stock Unit
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change of Control Payment
|
|
|
|
|
|
|
|
|
|
|
$3,375,000
|
|
|
|
|
|
|
|
|
|
Accelerated Vesting of
Restricted Stock Units
|
|
|
$198,764
|
|
|
|
|
|
|
|
$2,340,336
|
|
|
|
$2,340,336
|
|
|
|
$2,340,336
|
|
Incremental
Non-Qualified
Pension
|
|
|
|
|
|
|
|
|
|
|
$13,003
|
|
|
|
|
|
|
|
|
|
Health Care Benefits and Life
Insurance Coverage
|
|
|
$31,622
|
|
|
|
|
|
|
|
$38,412
|
|
|
|
|
|
|
|
|
|
Life Insurance Proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$2,025,000
|
|
|
|
|
|
Outplacement
Services
|
|
|
$9,990
|
|
|
|
|
|
|
|
$9,990
|
|
|
|
|
|
|
|
|
|
280G Tax
Gross-Up
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$1,174,991
|
|
|
|
$90,865
|
|
|
|
$8,376,725
|
|
|
|
$4,456,201
|
|
|
|
$2,431,201
|
|
Randy Engel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Benefit
|
|
|
$945,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus (Corporate Performance and
Personal)
|
|
|
$564,477
|
|
|
|
$564,477
|
|
|
|
|
|
|
|
$564,477
|
|
|
|
$564,477
|
|
Restricted Stock Unit
Bonus
|
|
|
|
|
|
|
|
|
|
|
$629,988
|
|
|
|
|
|
|
|
|
|
Performance Leveraged Stock Unit
Bonus
|
|
|
$3,719,286
|
|
|
|
$3,719,286
|
|
|
|
$2,197,617
|
|
|
|
$3,719,286
|
|
|
|
$3,719,286
|
|
Change of Control
Payment
|
|
|
|
|
|
|
|
|
|
|
$4,483,200
|
|
|
|
|
|
|
|
|
|
Accelerated Vesting of Restricted Stock
Units
|
|
|
$1,063,802
|
|
|
|
|
|
|
|
$3,736,661
|
|
|
|
$3,736,661
|
|
|
|
$3,736,661
|
|
Incremental
Non-Qualified
Pension
|
|
|
|
|
|
|
|
|
|
|
$3,611,928
|
|
|
|
|
|
|
|
|
|
Health Care Benefits and Life Insurance
Coverage
|
|
|
$46,246
|
|
|
|
|
|
|
|
$99,141
|
|
|
|
|
|
|
|
|
|
Life Insurance
Proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1,890,000
|
|
|
|
|
|
Outplacement Services
|
|
|
$14,800
|
|
|
|
|
|
|
|
$14,800
|
|
|
|
|
|
|
|
|
|
280G Tax
Gross-Up
|
|
|
|
|
|
|
|
|
|
|
$8,602,164
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$6,353,611
|
|
|
|
$4,283,763
|
|
|
|
$23,375,499
|
|
|
|
$9,910,424
|
|
|
|
$8,020,424
|
|
80
Newmont Mining Corporation 2017 Proxy Statement
POTENTIAL PAYMENTS ON TERMINATION, CONTINUED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
Not For Cause
($)
|
|
|
Change
of
Control
($)
|
|
|
Termination
After
Change
of
Control
($)
|
|
|
Death
($)
|
|
|
Disability
($)
|
|
Stephen
Gottesfeld
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Benefit
|
|
|
$772,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus (Corporate Performance and
Personal)
|
|
|
$435,263
|
|
|
|
$435,263
|
|
|
|
|
|
|
|
$435,263
|
|
|
|
$435,263
|
|
Restricted Stock Unit Bonus
|
|
|
|
|
|
|
|
|
|
|
$463,488
|
|
|
|
|
|
|
|
|
|
Performance Leveraged Stock Unit
Bonus
|
|
|
$2,761,885
|
|
|
|
$2,761,885
|
|
|
|
$1,613,351
|
|
|
|
$2,761,885
|
|
|
|
$2,761,885
|
|
Change of Control Payment
|
|
|
|
|
|
|
|
|
|
|
$3,372,579
|
|
|
|
|
|
|
|
|
|
Accelerated Vesting of
Restricted Stock Units
|
|
|
$761,499
|
|
|
|
|
|
|
|
$2,609,353
|
|
|
|
$2,609,353
|
|
|
|
$2,609,353
|
|
Incremental
Non-Qualified
Pension
|
|
|
|
|
|
|
|
|
|
|
$2,321,248
|
|
|
|
|
|
|
|
|
|
Health Care Benefits and Life
Insurance Coverage
|
|
|
$41,960
|
|
|
|
|
|
|
|
$90,098
|
|
|
|
|
|
|
|
|
|
Life Insurance Proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1,545,000
|
|
|
|
|
|
Outplacement
Services
|
|
|
$14,800
|
|
|
|
|
|
|
|
$14,800
|
|
|
|
|
|
|
|
|
|
280G Tax
Gross-Up
|
|
|
|
|
|
|
|
|
|
|
$6,420,337
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$4,787,907
|
|
|
|
$3,197,148
|
|
|
|
$16,905,254
|
|
|
|
$7,351,501
|
|
|
|
$5,806,501
|
|
Thomas Palmer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Benefit
|
|
|
$1,062,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus (Corporate Performance and
Personal)
|
|
|
$467,423
|
|
|
|
$467,423
|
|
|
|
|
|
|
|
$467,423
|
|
|
|
$467,423
|
|
Restricted Stock Unit Bonus
|
|
|
|
|
|
|
|
|
|
|
$874,986
|
|
|
|
|
|
|
|
|
|
Performance Leveraged Stock Unit
Bonus
|
|
|
$2,363,300
|
|
|
|
$2,363,300
|
|
|
|
$2,387,115
|
|
|
|
$2,363,300
|
|
|
|
$2,363,300
|
|
Change of Control Payment
|
|
|
|
|
|
|
|
|
|
|
$3,937,500
|
|
|
|
|
|
|
|
|
|
Accelerated Vesting of Restricted Stock
Units
|
|
|
$549,481
|
|
|
|
|
|
|
|
$1,558,089
|
|
|
|
$1,558,089
|
|
|
|
$1,558,089
|
|
Incremental
Non-Qualified
Pension
|
|
|
|
|
|
|
|
|
|
|
$20,274
|
|
|
|
|
|
|
|
|
|
Health Care Benefits and Life Insurance
Coverage
|
|
|
$67,947
|
|
|
|
|
|
|
|
$72,245
|
|
|
|
|
|
|
|
|
|
Life Insurance Proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$2,250,000
|
|
|
|
|
|
Outplacement Services
|
|
|
$9,990
|
|
|
|
|
|
|
|
$9,990
|
|
|
|
|
|
|
|
|
|
280G Tax
Gross-Up
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$4,520,641
|
|
|
|
$2,830,723
|
|
|
|
$8,860,199
|
|
|
|
$6,638,812
|
|
|
|
$4,388,812
|
|
Newmont Mining
Corporation 2017 Proxy Statement
81