After checking out New Gold’s (NGD) 1q22 numbers today, your humble scribe’s thoughts turned to other company documents and, while perusing the 2022 Management Information Circular published in March, a single repeated question began to show: “WHY?” Time to explain, with the help of screenshots from the biographies of each NGD director:
CEO Renaud Adams:
No questions. While its still a drop in the bucket compared to the 448.5m shares out at NGD, at least Renaud Adams owns a significant number and duly gets a pass. However…
Chair of the Board, Ian Pearce:
Question: WHY? You’re the company chair and only own 27k shares? Padding that out with awarded DSUs isn’t the level of skin you’d expect in the game of the Chair, so what gives Ian?
Next up, director Geoff Chater:
Question: WHY? Why does NGD allow a director with zero share purchases and under 55k of free shares a full two years to get straight with the rules? Is it to give the company enough time to dole out some RSUs or PSUs as well and get him up to speed for free? Why has this director never even bothered to buy on the open market?
Next, Director Nicholas Chirekos:
Question: WHY? Is this a joke? This man is head of the Corporate Governance committee! How does this meet corporate guidelines on director participation? Are you seriously suggesting DSUs qualifies as skin in this game?
Next, Director Gillian Davidson:
Question: WHY? She’s been on the board for four years, she chairs the Sustainability Committee, but can’t sustain the thought of buying a single share with her own money! How does this freebie bonanza meet NGD requirements for share ownership?
Next, Director James Gowans:
Question: WHY? He joined NGD just after his massive payola at Arizona Mining, but only has 30k shares using his own cash and once again, qualifies for the NGD ownership guidelines via freebie DSUs. Why is this considered acceptable by a company of this size?
Next, Director Thomas McCulley:
Question: WHY? Why on earth are these people allowed to stay in default, remain utterly devoid of personal financial risk while at the same time responsible for the direction and strategy of NGD? Presumably the head of Anglo’s Quellaveco project isn’t short of a penny or two.
Next, Director Margaret Mulligan:
Queston: WHY? Peggy Mulligan has been a director for four years, chairs the Compensation Committee, and owns zero shares! Not only does she set the rules, but she makes sure she uses them to her maximum advantage.
And finally, Director Marilyn Schonberner:
Question: WHY? Once again, zero personal financial pressure or responsbility, aside from freebie DSUs collected over the years. Under other circumstances you’d be blown away by the fact that Schonberner heads NGD’s Audit Committee, but by now you’ve probably spotted a pattern.
Is this truly the way to ensure corporate accountability at directorate level? These guidelines are so lax, they may as well not exist.