DEF 14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant  þ

Filed by a Party other than the Registrant  ¨

Check the appropriate box:

 

¨   Preliminary Proxy Statement   ¨     Confidential, for Use of the Commission
þ   Definitive Proxy Statement           Only (as permitted by Rule 14a-6(e)(2))
¨   Definitive Additional Materials
¨   Soliciting Material Pursuant to §240.14a-12

Newmont Mining Corporation

 

(Name of registrant as specified in its charter)
(Name of person(s) filing proxy statement, if other than the registrant)
Payment of Filing Fee (Check the appropriate box):
þ       No fee required.
¨       Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
  (1)  

Title of each class of securities to which transaction applies:

 

   

 

  (2)  

Aggregate number of securities to which transaction applies:

 

   

 

  (3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

   

 

  (4)  

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  (5)   Total fee paid:
   
   

 

¨   Fee paid previously with preliminary materials.
¨   Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1)  

Amount Previously Paid:

 

   

 

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Form, Schedule or Registration Statement No.:

 

   

 

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  (4)  

Date Filed:

 

   

 

 

 

 


Table of Contents

 Newmont

 Proxy

 Statement

 2014

 

 

 

 

 

Annual Meeting of Stockholders

The Annual Meeting of Stockholders of

Newmont Mining Corporation will be held at:

Hotel du Pont

11th and Market Streets

Wilmington, Delaware 19801

On Wednesday, April 23, 2014

At 11:00 a.m., local time

 

LOGO


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LOGO   Newmont Mining Corporation

6363 South Fiddler’s Green Circle

Greenwood Village, Colorado 80111 USA

 

Notice of 2014 Annual Meeting of Stockholders

March 6, 2014

The Annual Meeting of Shareholders of Newmont Mining Corporation will be held on Wednesday, April 23, 2014 at 11:00 a.m., local time, at Hotel du Pont, 11th and Market Streets, Wilmington, Delaware 19801, to:

 

1. Elect Directors;

 

2. Ratify the Audit Committee’s appointment of PricewaterhouseCoopers LLP as Newmont’s independent auditors for 2014;

 

3. Approve, on an advisory basis, the compensation of the Named Executive Officers;

 

4. Consider and act upon a stockholder proposal regarding political spending disclosure, as set forth in the accompanying Proxy Statement, if properly introduced at the meeting; and

 

5. Transact such other business that may properly come before the meeting.

 

Record Date: February 25, 2014

Under the Securities and Exchange Commission rules, we have elected to use the Internet for delivery of Annual Meeting materials to our stockholders, enabling us to provide them with the information they need, while lowering the costs of delivery and reducing the environmental impact associated with our Annual Meeting.

All stockholders are cordially invited to attend the Annual Meeting in person. It is important that your shares be represented at the Annual Meeting whether or not you are personally able to attend. If you are unable to attend, please promptly vote your shares by telephone or Internet or by signing, dating and returning the enclosed proxy card at your earliest convenience. Voting by the Internet or telephone is fast, convenient, and enables your vote to be immediately confirmed and tabulated, which helps Newmont reduce postage and proxy tabulation costs. Your vote is important so that your shares will be represented and voted at the Annual Meeting even if you cannot attend.

 

By Order of the Board of Directors,  

Scan this QR code to

view digital versions

of our Proxy Statement

and 2013 Annual

Report.

  LOGO
LOGO    
STEPHEN P. GOTTESFELD    
Executive Vice President, General Counsel and Corporate Secretary            

 

  

You can vote in one of four ways:

 

  
LOGO   

Visit the website listed on your proxy card to vote VIA THE INTERNET

  
LOGO   

 

Call the telephone number on your proxy card to vote BY TELEPHONE

  
LOGO   

Sign, date and return your proxy card in the enclosed envelope to vote BY MAIL

 

  
LOGO   

 

 

Attend the meeting to vote IN PERSON

  

Our Notice of Meeting, Proxy Statement and Annual Report are available at www.envisionreports.com/nem


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LOGO

Table of Contents

 

   

2014 PROXY STATEMENT

    Page   

GENERAL INFORMATION

    1   

Notice of Internet Availability of Proxy Materials

    1   

Stockholders Entitled to Vote

    1   

Voting Your Shares

    1   

Quorum, Tabulation and Broker Non-Votes and Abstentions

    2   

Votes Required to Approve the Proposals

    3   

Revocation of Proxy or Voting Instruction Form

    4   

Solicitation Costs

    4   

Notes to Participants in Newmont Employee Retirement Savings Plans

    4   

Stockholder Proposals for the 2015 Annual Meeting of Stockholders

    4   

Voting Results

    4   

PROPOSAL NO. 1—ELECTION OF DIRECTORS

    5   

Voting For Directors

    5   

Majority Vote Standard for the Election of Directors

    5   

Director Skills and Qualifications

    5   

Board of Directors Recommendation

    5   

Nominees

    5   

Director Nomination Process and Review of Director Nominees

    15   

Independence of Directors

    15   

Stock Ownership of Directors and Executive Officers

    16   

Stock Ownership of Certain Beneficial Owners

    17   

Director Compensation

    18   

Committees of the Board of Directors and Attendance

    21   

Corporate Governance

    23   

Report of the Compensation Committee on Executive Compensation

    25   

COMPENSATION DISCUSSION AND ANALYSIS

    26   

Executive Summary

    27   

Philosophy and Principles

    34   

Components of Total Compensation

    35   

2013 Compensation

    39   

“Realizable” Compensation for 2013

    55   

Post-Employment Compensation

    56   

Other Policies and Considerations

    58   

EXECUTIVE COMPENSATION TABLES

    61   

Section 16(a) Beneficial Ownership Reporting Compliance

    78   

PROPOSAL NO. 2—RATIFY APPOINTMENT OF AUDITORS

    79   

Report of the Audit Committee

    80   

PROPOSAL NO. 3—APPROVE, ON AN ADVISORY BASIS, THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS

    81   

PROPOSAL NO. 4—STOCKHOLDER PROPOSAL REGARDING POLITICAL SPENDING DISCLOSURE

    83   

Other Matters

    85   

 

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LOGO

PROXY STATEMENT

General Information

This Proxy Statement is furnished to the stockholders of Newmont Mining Corporation (“Newmont,” the “Company” or “we”) in connection with the solicitation of proxies by the Board of Directors of the Company (the “Board of Directors” or the “Board”) to be voted at the Company’s 2014 Annual Meeting of Stockholders to be held on Wednesday, April 23, 2014 (the “Annual Meeting”). The Annual Meeting is being held for the purposes set forth in the accompanying Notice of 2014 Annual Meeting of Stockholders. The Proxy Statement, proxy card and 2013 Annual Report to Stockholders are being made available to stockholders on or about March 6, 2014.

 

   

Notice of Internet Availability of Proxy Materials.

 

On or about March 12, 2014, we will furnish a Notice of Internet Availability of Proxy Materials (“Notice”) to most of our stockholders containing instructions on how to access the proxy materials and to vote online. In addition, instructions on how to request a printed copy of these materials may be found on the Notice. For more information on voting your stock, please see “Voting Your Shares” below. If you received a Notice by mail, you will not receive a paper copy of the proxy materials unless you request such materials by following the instructions contained on the Notice. Your vote is important no matter the extent of your holdings.

 

Stockholders Entitled
to Vote.
 

The holders of record of common stock of Newmont, par value $1.60 per share,
at the close of business on February 25, 2014 (the “Record Date”) are entitled to
vote at the Annual Meeting. As of the Record Date, there were
497,925,418 shares outstanding.

 

 

Voting Your Shares.

  Newmont Common Stock. Each share of common stock that you own entitles you to one vote. Your Notice or proxy card shows the number of shares of common stock that you own. You may elect to vote in one of the following methods:
  LOGO   By Mail - If you have received or requested a paper copy of the proxy materials, please date and sign the proxy card and return it promptly in the accompanying envelope.
  LOGO   By Internet - If you received a Notice of Internet Availability of Proxy Materials, you can access our proxy materials and vote online. Instructions to vote online are provided in the Notice.
  LOGO   By Telephone - You may vote your shares by calling the telephone number specified on your proxy card. You will need to follow the instructions on your proxy card and the voice prompts.
  LOGO   In Person - You may attend the Annual Meeting and vote in person. We will give you a ballot when you arrive. If your stock is held in the name of your broker, bank or another nominee (a “Nominee”), then you must present a proxy from that Nominee in order to verify that the Nominee has not already voted your shares on your behalf.

 

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  If you hold Newmont Common Stock at your Broker - If your shares are held in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and the Notice or proxy materials, as applicable, are being forwarded to you by that organization. Your Voting Instruction Form from Broadridge or your Notice provides information on how to vote your shares. The organization holding your account is considered the shareholder of record for purposes of voting at the Annual Meeting.
  If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, the organization that holds your shares may generally vote on “routine” matters such as ratification of auditors but cannot vote on “non-routine” matters, which now include matters such as votes for the Election of Directors proposal, the Say-on-Pay proposal and the stockholder proposal regarding Political Spending Disclosure. Thus, if the organization that holds your shares does not receive instructions from you on how to vote your shares on a “non-routine” matter, that organization will inform the inspector of election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a “broker non-vote.”
  Newmont Canada Exchangeable Shares. On February 18, 2014, all of the exchangeable shares (“Exchangeable Shares”) of Newmont Mining Corporation of Canada Limited (“Newmont Canada”) were redeemed in accordance with their terms. In order to vote at the Annual Meeting, you must be a holder of Newmont’s common stock. Former registered holders who have not yet received their shares of Newmont common stock can do so by validly completing and duly executing a letter of transmittal and returning it, together with the certificate(s) representing their Exchangeable Shares, to the attention of Computershare Investor Services Inc. at the address set out in the letter of transmittal. The details of the procedures for the deposit of Exchangeable Share certificates are set out in the letter of transmittal for the redemption, a copy of which is available on Newmont Canada’s profile at www.sedar.com.
  If you held your Exchangeable Shares through a broker, dealer, bank, trust company or other intermediary you do not have to submit a letter of transmittal and you should vote your shares of common stock in accordance with the instructions set out above under the heading “Voting Your Shares — Newmont Common Stock.”

 

   

Quorum, Tabulation and Broker Non-Votes and Abstentions.

  Quorum. The holders of a majority of the outstanding shares of capital stock of the Company entitled to vote at the Annual Meeting must be present in person or represented by proxy in order to constitute a quorum for all matters to come before the meeting. For purposes of determining the presence of a quorum, “shares of capital stock of the Company” include all shares of common stock entitled to vote at the Annual Meeting.
  Tabulating Votes and Voting Results. Votes at the Annual Meeting will be tabulated by one or more inspectors of election who will be appointed by the Chairman of the meeting and who will not be candidates for election to the Board of Directors. The inspectors of election will treat shares of capital stock represented by a properly signed and returned proxy as present at the Annual Meeting for purposes of determining a quorum, without regard to whether the proxy is marked as casting a vote or abstaining.
  Broker Non-Votes and Abstentions. Abstentions and “broker non-votes” as to particular matters are counted for purposes of determining whether a quorum is present at the Annual Meeting. Abstentions are counted in tabulations of the votes cast on proposals presented to stockholders (except with respect to the

 

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  Election of Directors, where abstentions are excluded), whereas broker non-votes are not counted for purposes of determining whether a proposal has been approved. Except with respect to the Election of Directors, where abstentions are excluded, abstentions have the same effect as votes against proposals presented to stockholders. A “broker non-vote” occurs when a nominee holding shares for a beneficial owner votes on one proposal, but does not vote on another proposal because the nominee does not have discretionary voting power and has not received instructions to do so from the beneficial owner.
   

As such, please be reminded that if you hold your shares in “street name” it is critical that you cast your vote if you want it to count in the Election of Directors (Proposal 1). If you hold your shares in “street name” and you do not instruct your bank or broker how to vote in the Election of Directors, no votes will be cast on your behalf. Your bank or broker will, however, have discretion to vote any uninstructed shares on the ratification of the appointment of our independent registered public accounting firm (Proposal 2). They will not have discretion to vote uninstructed shares on the advisory vote to approve named executive officer compensation (Proposal 3), or the stockholder proposal regarding political spending disclosure (Proposal 4).

 

Votes Required to
Approve the
Proposals.
 

Proposal

 

Vote Required

  Election of Directors   Majority of votes cast for the Nominees.
  Ratification of independent auditors for 2014   Majority of stock present in person or by proxy and entitled to vote.
  Approve, on an advisory basis, the compensation of the Named Executive Officers   Non-binding advisory vote — majority of stock present in person or by proxy and entitled to vote.
  Stockholder proposal regarding political spending disclosure   Majority of stock present in person or by proxy and entitled to vote.
  Election of Directors. Brokers, banks and other financial institutions can no longer vote your stock on your behalf for the Election of Directors if you have not provided instructions on your voting instruction form, by telephone or by Internet. For your vote to be counted, you must submit your voting instructions to your broker or custodian.
  Ratify PricewaterhouseCoopers LLP as the Company’s Independent Auditors for 2014. The affirmative vote of a majority of the shares present and entitled to vote, in person or by proxy, at the Annual Meeting is required to ratify the Audit Committee’s appointment of PricewaterhouseCoopers LLP as the Company’s independent auditors for 2014. Even if you do not instruct your broker how to vote with respect to this item, your broker may vote your shares with respect to this proposal.
  Advisory Say-On-Pay Vote. Because the vote on Compensation of the Named Executive Officers is advisory in nature, it will not: (1) affect any compensation already paid or awarded to any Named Executive Officer, (2) be binding on or overrule any decisions by the Board of Directors, (3) create or imply any additional fiduciary duty on the part of the Board of Directors, and (4) restrict or limit the ability of stockholders to make proposals for inclusion in proxy materials related to executive compensation. If you do not instruct your broker how to vote with respect to this item, your broker may not vote with respect to this proposal. For your vote to be counted, you must submit your voting instructions to your broker or custodian.
   

Other Items. If any other items are presented at the Annual Meeting, they must receive an affirmative vote of a majority of the shares present and entitled to vote, in person or by proxy, in order to be approved.

 

 

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Revocation of Proxy or Voting Instruction Form.

 

Revocation of Newmont Common Stock Proxy or Voting Instruction Form. A stockholder who executes a proxy or Voting Instruction Form (“VIF”) may revoke it by delivering to the Secretary of the Company, at any time before the proxies are voted, a written notice of revocation bearing a later date than the proxy or VIF, or by attending the Annual Meeting and voting in person (although attendance at the Annual Meeting will not in and of itself constitute a revocation of a proxy). A stockholder also may substitute another person in place of those persons presently named as proxies. Written notice revoking or revising a proxy should be sent to the attention of the Secretary, Newmont Mining Corporation, at 6363 South Fiddler’s Green Circle, Greenwood Village, Colorado 80111 USA.

 

Solicitation Costs.

 

The cost of preparing and mailing the Notice, requests for proxy materials, and the cost of solicitation of proxies on behalf of the Board of Directors will be borne by the Company. The Notice will be furnished to the holders of the Company’s common stock on March 12, 2014. In addition, solicitation of proxies and Voting Instruction Forms may be made by certain officers and employees of the Company by mail, telephone or in person. The Company has retained Georgeson Inc. to aid in the solicitation of brokers, banks, intermediaries and other institutional holders in the United States and Canada for a fee of $15,500. The Company also will reimburse brokerage firms and others for their expenses in forwarding proxy materials to beneficial owners of common stock.

 

   

Notes to Participants in Newmont Employee Retirement Savings Plans.

 

Participants in the Retirement Savings Plan of Newmont and Retirement Savings Plan for Hourly-Rated Employees of Newmont. If you are a participant in the Retirement Savings Plan of Newmont or Retirement Savings Plan for Hourly-Rated Employees of Newmont (the “401(k) Plans”) and hold the Company’s common stock under either of the 401(k) Plans, the shares of Newmont common stock which are held for you under the 401(k) Plans may be voted through the proxy card accompanying this mailing. The 401(k) Plans are administered by Fidelity Investments, as trustee. The trustee, as the stockholder of record of the Company’s common stock held in the plans, will vote the shares held for you in accordance with the directions you provide. If you do not vote your shares by 11:59 p.m. Eastern time on April 18, 2014, the trustee will not vote your common shares in the 401(k) Plans.

 

Stockholder Proposals for the 2015 Annual Meeting of Stockholders.

  For a stockholder proposal, including a proposal for the Election of Directors, to be included in the proxy statement and form of proxy for the 2015 Annual Meeting, the proposal must have been received by us at our principal executive offices no later than November 12, 2014. Proposals should be sent to the attention of the Secretary of the Company at 6363 South Fiddler’s Green Circle, Greenwood Village, Colorado 80111 USA. We are not required to include in our proxy statement and form of proxy a stockholder proposal that was received after that date or that otherwise fails to meet the requirements for stockholder proposals established by Securities and Exchange Commission regulations.
   

In addition, under our By-Laws, stockholders must give advance notice of nominations for Directors or other business to be addressed at the 2015 Annual Meeting and must be received at the principal executive offices of the Corporation no later than the close of business on February 23, 2015, and not earlier than the close of business on January 23, 2015. The advance notice must be delivered to the attention of the Secretary of the Company at 6363 South Fiddler’s Green Circle, Greenwood Village, Colorado 80111 USA.

 

Voting Results.

 

The results of the voting at the Annual Meeting will be reported on Form 8-K and filed with the Securities and Exchange Commission within four business days after the end of the meeting.

 

 

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Proposal No. 1 — Election of Directors

Voting for Directors. If you hold your Newmont stock through a broker, bank or other financial institution, your Newmont stock will not be voted on your behalf on the Election of Directors unless you complete and return the Voting Instruction Form or follow the instructions provided to you to vote your stock via telephone or the Internet. If you do not instruct your broker, bank or other financial institution how to vote, your votes will be counted as “broker non-votes” and your shares will not be represented in the Election of Directors vote at the Annual Meeting.

Majority Vote Standard for the Election of Directors. Our By-Laws provide that in an uncontested election each Director will be elected by a vote of the majority of the votes cast, which means the number of votes cast “for” a Director’s election exceeds 50% of the number of votes cast with respect to that Director’s election. Votes cast shall include votes to withhold authority, but shall exclude abstentions. Votes will not be deemed cast if no authority or direction is given.

If a nominee for Director does not receive the vote of at least a majority of votes cast at the Annual Meeting, it is the policy of the Board of Directors that the Director must tender his or her resignation to the Board. In such a case, the Corporate Governance and Nominating Committee will make a recommendation to the Board whether to accept or reject the tendered resignation, or whether other action should be taken, taking into account all of the facts and circumstances. The Director who has tendered his or her resignation will not take part in the deliberations. For additional information, our Corporate Governance Guidelines are available on our website at www.newmont.com/our-investors/our-governance.

Director Skills and Qualifications. In addition to meeting the minimum qualifications set out by the Board of Directors under “Director Nomination Process and Review of Director Nominees,” on page 15, each nominee also brings a strong and unique background and set of skills to the Board, giving the Board, as a whole, competence and experience in a wide variety of areas, including board service, corporate governance, compensation, executive management, private equity, finance, mining, operations, manufacturing, marketing, government, law, international business and health, safety, environmental and social responsibility. The unique background, skills and qualifications that led the Board of Directors and the Corporate Governance and Nominating Committee to the conclusion that each of the nominees should serve as a Director for Newmont are set forth in the “Nominees” section below.

 

Board of Directors Recommendation. The Board of Directors recommends that the stockholders vote “FOR” all of the following nominees and, unless a stockholder gives instructions on the proxy card to the contrary, the proxies named thereon intend so to vote.

Nominees. Each of the 9 persons named below is a nominee for election as a Director at the Annual Meeting for a term of one year or until his/her successor is elected and qualified. Unless authority is withheld, the proxies will be voted for the election of such nominees. All such nominees are currently serving as Directors of the Company. All such nominees were elected to the Board of Directors at the last Annual Meeting. If any such nominees cannot be a candidate for election at the Annual Meeting, then the proxies will be voted either for a substitute nominee designated by the Board of Directors or for the election of only the remaining nominees.

Simon R. Thompson, a Director of Newmont since 2008, provided notice to the board of Directors of his intention not to stand for re-election to the Board of Directors at the Annual Meeting. Mr. Thompson’s service as a Director will cease immediately prior to the 2014 Annual Meeting of Stockholders. Mr. Thompson’s decision not to stand for re-election to the Board of Directors was personal and not due to any disagreement with the Company. Newmont and the Board express their deepest appreciation to Mr. Thompson for his outstanding and dedicated service to Newmont and for his many contributions to the Board and committees of the Board, including as a valued member of the Safety and Sustainability Committee; the former Environmental, Social Responsibility, Operations & Safety Committee and as Chairman of the former Environmental and Social Responsibility Committee of the Board. No person is being nominated at the Annual Meeting to fill the vacancy created by his departure. Instead, the Directors expect to reduce the size of the Board of Directors from ten to nine members, effective when Mr. Thompson ceases to be a Director.

 

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The following table sets forth information as to each nominee for election, including his or her age (as of the Record Date), and background (including his or her principal occupation during the past five years, current directorships and directorships held during at least the past five years, and skills and qualifications):

 

 

LOGO

 

Director Since: 2011 Independent

 

Board Committees:

Audit

  

BRUCE R. BROOK

 

Bruce R. Brook, 58, currently serves as a Director for Boart Longyear Limited, Programmed Group (as Chairman) and CSL Limited. In addition, Mr. Brook retired in 2012 after six years of service as a member of the Financial Reporting Council in Australia, an agency of the Australian Commonwealth, which oversees the work of the Accounting Standards Board and the Auditing Standards Board, and advises the Australian Government on matters relating to corporate regulation. In 2013 Mr. Brook was appointed to the Director Advisory Panel of the Australian Securities and Investment Commission, the Australian Corporate Regulator.

 

Director Qualifications:

Financial Expertise  — Prior service as the Chairman of the Audit Committee of Lihir Gold Limited and as Chief Financial Officer of WMC Resources Limited, Deputy CFO of ANZ Banking Group Limited, Group Chief Accountant of Pacific Dunlop Limited, and General Manager, Group Accounting positions at CRA Limited and Pasminco Limited. Current Chairman of the Audit Committee of Boart Longyear Limited and Chairman of the Audit Committee of CSL Limited. Former member of the Financial Reporting Council, an agency of the Australian Commonwealth, which oversees the work of the Accounting Standards Board and the Auditing Standards Board, and advises the Australian Government on matters relating to corporate regulation.

 

International Experience — Extensive international experience as a director of multiple international companies, including Boart Longyear Limited, Programmed Group and CSL Limited.

 

Operational and Industry Expertise — Experience as a Director of Lihir Gold Limited, Energy Developments Limited and Consolidated Minerals Limited. Currently serves as a Director of Deep Exploration Technologies Cooperative Research Centre, a collaborative research program researching safer, more advanced and more cost effective geological exploration and drilling methods.

 

Board Experience:

Service on the Company’s Board of Directors since 2011, as well as on the boards of several companies, including Boart Longyear Limited since February 2007, and CSL Limited since August 2011, and as Chairman of Programmed Group since May 2011. Former Director and Chairman of the Audit Committees of Lihir Gold Limited, Consolidated Minerals Limited, Energy Developments Limited and Snowy Hydro Limited and former independent Chairman of Energy Developments Limited.

 

 

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LOGO

 

Director since: 2012

Independent

 

Board Committees:

Audit

  

J. KOFI BUCKNOR

 

J. Kofi Bucknor, 58, CEO of J. Kofi Bucknor & Associates, a Ghanaian corporate finance advisory and propriety investing firm established in 2000. Chairman of Ghana’s Investment Advisory Committee, which advises on the management of part of the country’s oil revenues, and former Chairman of the Ghana Stock Exchange. Managing partner of Kingdom Africa Management (formerly Zephyr Africa Management), a private equity fund manager, from 2003 to present.

 

Director Qualifications:

  CEO/Executive Management Skills — Experience as CEO of J. Kofi Bucknor & Associates since 2000; Treasurer, African Development Bank 1986 – 1994; Executive Director, Corporate Finance with Lehman Brothers International, London from 1994 – 1997; Managing Director of CAL Merchant Bank, Ghana, from 1997 – 2000; Managing Partner of Kingdom Africa Management from 2003 — present; and other executive management positions noted above.

 

   Financial Expertise — Over 30 years of international banking experience including as managing partner of several private equity funds in Africa. Member of the Commonwealth Secretary General’s Special Advisory Panel on the 1996 Asian Financial Crisis, former Chairman of the Ghana Stock Exchange, and former Treasurer, African Development Bank.

 

   International Experience — Extensive senior executive experience in global banking as noted above, as well as service on the boards of National Investment Bank (Ghana), CNIA Assurances (Morocco), Mixta Africa (Spain), ARM (Nigeria), Ecobank Transnational Corporation and Letshego (Botswana). Service on boards in Ghana, Botswana, Morocco, Spain and Nigeria.

 

   Operational and Industry Expertise — Experience with multinational mining operations including as a former Director of Ashanti Goldfields Corporation and as a member of the International Advisory Board of Normandy Mining Corporation. Served as a Director of Chirano Gold Mines. Chairman of Ghana’s Investment Advisory Committee established to advise on and oversee the management of Ghana’s oil reserves.

 

Board Experience:

Service on the Company’s Board of Directors since 2012, as well as on the boards of several companies, including National Investment Bank (Ghana), ARM (Nigeria), and CNIA Assurances (Morocco). Formerly served as a Director of Chirano Gold Mines, Ashanti Goldfields Corporation and Ecobank Transnational Corporation.

 

 

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LOGO

 

Director since: 2000

Independent Chairman

 

Board Committees:

Audit, Corporate

Governance and

Nominating (Chair)

  

VINCENT A. CALARCO

 

Vincent A. Calarco, 71, Non-Executive Chairman of Newmont Mining Corporation from 2008 to present. Former Chairman of Crompton Corporation (now known as Chemtura Corporation), a specialty chemical company, having served in that position from 1996 to 2004. President and Chief Executive Officer thereof from 1985 to 2004.

 

Director Qualifications:

CEO/Executive Management Skills — Experience as Chairman, President and Chief Executive Officer of Crompton Corporation and Non-Executive Chairman of Newmont.

 

Financial Expertise — Experience serving on the Company’s Audit Committee and as the Chairman of the Audit Committee of the Board of Directors of Consolidated Edison of New York. Extensive financial oversight experience in senior management roles.

 

International Experience — Extensive senior executive experience working with multinational operations at Crompton Corporation, which has global manufacturing facilities on five continents and conducts business in over 120 countries, as well as experience establishing inter-industry relationships and negotiating product safety regulations as Chairman of several domestic and international chemical industry trade associations.

 

Operational and Industry Expertise — Extensive experience in the chemical industry, a process industry with similar operating characteristics and issues, and prior service on the Board of Directors of a copper mining company, Asarco Corporation.

 

Compensation Expertise — Participation in compensation, benefits and related decisions in senior executive roles.

 

Board Experience:

Service on the Company’s Board of Directors since 2000, as well as on the boards of several other companies, including as a current director of Consolidated Edison, Inc., and prior service as a director at Asarco Corporation.

 

 

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LOGO

 

Director since: 2007

Independent

 

Board Committees:

Compensation, Safety and Sustainability

(Chair)

 

  

JOSEPH A. CARRABBA

 

Joseph A. Carrabba, 61, Retired Chairman, President and Chief Executive Officer of Cliffs Natural Resources Inc., formerly Cleveland-Cliffs Inc, from May 2007 to November 15, 2013. Served as Cliffs Natural Resources Inc.’s President and Chief Executive Officer from 2006 to 2007 and as President and Chief Operating Officer from 2005 to 2006. Previously served as President and Chief Operating Officer of Diavik Diamond Mines, Inc. from 2003 to 2005.

 

Director Qualifications:

  CEO/Executive Management Skills — Experience as former Chairman, President and Chief Executive Officer of Cliffs Natural Resources Inc. and other executive management positions noted above.

 

  Financial Expertise — Extensive financial management experience in senior executive roles.

 

   Operational and Industry Expertise — Operational experience in the mining industry, including as former President and Chief Operating Officer of Cliffs Natural Resources Inc., former President and Chief Operating Officer of Diavik Diamond Mines, Inc. and former General Manager of Weipa Bauxite Operation of Comalco Aluminum. Awarded a Bachelor’s Degree in Geology from Capital University and a MBA from Frostburg State University.

 

   International Experience — Extensive senior executive experience working with multinational mining operations, including with Cliffs Natural Resources Inc., which has operations in North America, Australia, Latin America and Asia.

 

  Health, Safety, Environmental and Social Responsibility Experience — Experience serving on the Company’s Operations and Safety Committee and the Environmental and Social Responsibility Committee and current Chair of the Company’s Safety and Sustainability Committee.

 

   Compensation Expertise — Experience serving as a member of the Company’s Compensation Committee. Participation in compensation, benefits and related decisions in senior executive roles. Current Chair of the Compensation Committee of KeyCorp and current member of the Compensation Committee of Aecon.

 

Board Experience:

Service on the Company’s Board of Directors since 2007, as well as on the boards of several other companies, including as a current director of KeyCorp as Chair of the Compensation Committee and a member of the Nominating and Governance Committee, Aecon as a member of the Compensation Committee and the Nominating and Governance Committee and as a former director of Cliffs Natural Resources Inc. from 2006 through November 15, 2013.

 

 

Newmont Mining Corporation 2014 Proxy Statement   •  9


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LOGO

 

Director since: 2005

Independent

 

Board Committees:

Audit (Chair),

Corporate Governance

and Nominating

 

  

NOREEN DOYLE

 

Noreen Doyle, 64, Retired First Vice President of the European Bank for Reconstruction and Development (“EBRD”), having served in that position from 2001 to 2005, and in other executive positions with the EBRD since 1992.

 

Director Qualifications:

Financial Expertise  — Extensive experience in banking and finance at Bankers Trust Company and at the EBRD, including experience as head of risk management and head of banking at EBRD. Experience serving on the Company’s Audit Committee, including as Chair, and the Audit Committees of the Board of Directors of QinetiQ Group plc and Rexam PLC.

 

International Experience — Extensive senior executive experience working with businesses, global and local, and governments throughout eastern Europe and the former Soviet Union.

 

Health, Safety, Environmental and Social Responsibility Experience — Experience at EBRD included specific focus on environmental specifications of projects and attention to the social dimensions of investment. Experience serving on the Company’s Environmental and Social Responsibility Committee.

 

Board Experience:

Service on the Company’s Board of Directors since 2005, as well as on the boards of several other companies, including as a current director of Credit Suisse and QinetiQ plc and as a former director of Rexam PLC. Member of advisory panels for Macquarie European Infrastructure Fund and Macquarie Renaissance Infrastructure Fund.

 

 

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LOGO

 

Director since: 2013

Management—

President and CEO

 

  

GARY J. GOLDBERG

 

Gary J. Goldberg, 55, was appointed President and Chief Executive Officer and joined Newmont’s Board of Directors on March 1, 2013. Previously, Mr. Goldberg served as President and Chief Operating Officer of Newmont Mining Corporation from July 2012 until March 1, 2013, and as Executive Vice President and Chief Operating Officer from December 2011 to July 2012.

 

Director Qualifications:

CEO/Executive Management Skills — Served as President and Chief Executive Officer of Rio Tinto Minerals 2006 – 2011; President and Chief Executive Officer of Rio Tinto Borax 2004 – 2006; Managing Director, Coal and Allied Industries Ltd. 2001 – 2004; President and Chief Executive Officer, Kennecott Energy 1999 – 2001; and other leadership roles in Rio Tinto’s coal, copper, industrial minerals and gold businesses.

 

Operational and Industry Expertise — More than 30 years of mining industry experience with senior executive oversight of operations, marketing, mergers and acquisitions, divestments, procurement, labor relations and regulatory issues. Served as Chairman of the United States National Mining Association from 2008 to 2010. Awarded Bachelor of Science degree in Mining Engineering from the University of Wisconsin-Platteville.

 

International Experience — Extensive senior executive experience with responsibility for businesses in Africa, Australia, Asia, Europe, North America and South America; served in senior executive roles based in Australia, the UK and the US.

 

Health, Safety, Environmental and Social Responsibility Experience — Formed and led the United States National Mining Association’s CEO Task Force on Safety; under his leadership Rio Tinto Borax was the first mining company to receive California Governor Schwarzenegger’s Environmental and Economic Leadership Award for sustainable practices; Director of California’s Climate Action Registry; appointed to the Australian Government’s Business Roundtable on Sustainable Development. 2013 recipient of the coveted Daniel C. Jackling Award, for his lifelong commitment to health and safety and his demonstrable progress at both Newmont and Rio Tinto towards achieving zero harm.

 

Financial Expertise  — Extensive financial management experience in senior executive roles. Awarded MBA from the University of Utah.

 

Board Experience:

Former service as a director at Coal & Allied Industries Ltd. and Rio Tinto Zimbabwe.

 

 

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LOGO

 

Director since: 2005

Independent

 

Board Committees:

Compensation, Safety and Sustainability

  

VERONICA M. HAGEN

 

Veronica M. Hagen, 68, Chief Executive Officer of Polymer Group, Inc. from April 2007 through August 2013. President and Chief Executive Officer of Sappi Fine Paper North America from 2004 to 2007. Executive positions with Alcoa, Inc. from 1998 to 2004, including Vice President and Chief Customer Officer from 2003 to 2004 and Vice President, Alcoa North American Extrusions from 2001 to 2003.

 

Director Qualifications:

   CEO/Executive Management Skills — Experience as former Chief Executive Officer of Polymer Group, Inc., and former President and Chief Executive Officer of Sappi Fine Paper North America.

 

   Industry and Operational Expertise — Extensive mining industry experience, including in executive positions with Alcoa, Inc., an international aluminum producer, for over 10 years, including as former Vice President and Chief Customer Officer and former Vice President, Alcoa North American Extrusions.

 

  International Experience — Extensive senior executive experience including former Chief Executive Officer of Polymer Group Inc., a company operating manufacturing facilities in nine countries.

 

   Health, Safety, Environmental and Social Responsibility Experience — Experience serving on the Company’s Safety and Sustainability Committee, formerly the Operations and Safety Committee and prior experience on the Environmental and Social Responsibility Committee.

 

  Compensation Expertise — Experience serving as a member of the Company’s Compensation Committee and current Chair of Southern Company Compensation and Management Succession Committee. Participation in compensation, benefits and related decisions in senior executive roles.

 

Board Experience:

Service on the Company’s Board of Directors since 2005, as well as on the boards of several other companies, including as a current director of Southern Company and Chair of the Compensation and Management Succession Committee. Former director of Jacuzzi Brands, Inc.

 

 

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LOGO

 

Director since: 2011

Independent

 

Board Committees:

Safety and

Sustainability

  

JANE NELSON

 

Jane Nelson, 53, Founding Director of the Corporate Social Responsibility Initiative at Harvard Kennedy School, a nonresident senior fellow at the Brookings Institution, and a senior associate of the Programme for Sustainability Leadership at Cambridge University. Former Director at the International Business Leaders Forum from 1993 to 2009, and a senior advisor until 2013.

 

Director Qualifications:

International Experience — Former director at the International Business Leaders Forum, previously worked in the office of the United Nations Secretary-General, and for the Business Council for Sustainable Development in Africa, for FUNDES in Latin America, and as a Vice President at Citibank working in Asia, Europe and the Middle East. Service on the Economic Advisory Board of the International Finance Corporation (IFC) and the Leadership Council of the Initiative for Global Development.

 

Health, Safety, Environmental and Social Responsibility Expertise — Director of Harvard Kennedy School’s Corporate Social Responsibility Initiative. One of the five track leaders for the Clinton Global Initiative, leading the track on Developing Human Capital in 2009. Served on advisory committees to over 45 global corporations, non-governmental organizations and government bodies since 1992. Current service on the Company’s Safety and Sustainability Committee.

 

Academic Experience — Director, Corporate Social Responsibility Initiative and adjunct lecturer in Public Policy, Harvard Kennedy School. Faculty, Corporate Social Responsibility executive education program, Harvard Business School. Nonresident senior fellow at the Brookings Institution and a senior associate at Cambridge University’s Programme for Sustainability Leadership. Author of five books and over 70 publications on the topics of corporate responsibility, sustainability and international development.

 

Industry Expertise — Service on ExxonMobil’s External Citizenship Advisory Panel; Independent Advisory Panel, International Council on Mining and Metals Resource Endowment initiative; former external adviser to World Bank Group on social impacts in mining, oil and gas sector.

 

Board Experience:

Service on the Company’s Board of Directors since October 2011. Currently serves on the Boards of Directors of FSG, and Chevron’s Niger Delta Partnership Initiative Foundation. Prior service on the Boards of Directors of SITA (now SUEZ Environment) and the World Environment Center.

 

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LOGO

 

Director since: 2004

Independent

 

Board Committees:

Compensation (Chair),

Corporate Governance

and Nominating

 

  

DONALD C. ROTH

 

Donald C. Roth, 70, Retired. From 1992 until September 2013, Managing Partner of EMP Global LLC, an international private equity firm. Member of Advisory Committee to the National Treasury Management Agency, Republic of Ireland, since 1990. Vice President and Treasurer of the World Bank from 1988 to 1992.

 

Director Qualifications:

  Financial Expertise — Extensive financial management experience in various roles, including as former Vice President and Treasurer of the World Bank, as Chairman of the Audit Committee of Ireland’s National Pension Reserve Fund, and other executive management positions noted above.

 

   International Experience — Extensive experience in international investment banking and capital markets.

 

   Compensation Expertise — Experience serving as a member of the Company’s Compensation Committee, including as Chairman. Participation in compensation, benefits and related decisions in senior executive roles.

 

Board Experience:

Service on the Company’s Board of Directors since 2004 and as Chair of the Compensation Committee since 2010, as well as on the boards of several other companies, including as a current director of ISEQ Exchange Traded Fund Public Limited Company (Ireland).

The Board of Directors recommends a vote FOR election of each of the above-named nominees.

 

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Director Nomination Process and Review of Director Nominees. We have established a process for identifying and nominating Director candidates that has resulted in the election of a highly-qualified and dedicated Board of Directors. The following is an outline of the process for nomination of candidates for election to the Board: (a) the Chief Executive Officer, the Corporate Governance and Nominating Committee or other members of the Board of Directors identify the need to add new Board members, with careful consideration of the mix of qualifications, skills and experience represented on the Board of Directors; (b) the Chairman of the Corporate Governance and Nominating Committee coordinates the search for qualified candidates with input from management and other Board members; (c) the Corporate Governance and Nominating Committee engages a candidate search firm to assist in identifying potential nominees, if it deems such engagement necessary and appropriate; (d) selected members of management and the Board of Directors interview prospective candidates; and (e) the Corporate Governance and Nominating Committee recommends a nominee and seeks full Board endorsement of the selected candidate, based on its judgment as to which candidate will best serve the interests of Newmont’s stockholders.

The Board of Directors has determined that Directors should possess the following minimum qualifications: (a) the highest personal and professional ethics, integrity and values; (b) commitment to representing the long-term interest of the stockholders; (c) broad experience at the policy-making level in business, government, education, technology or public interest; and (d) sufficient time to effectively fulfill duties as a Board member. The Board will endeavor to recommend qualified individuals who provide the mix of Director characteristics and diverse experiences, perspectives and skills appropriate for the Company. The Corporate Governance and Nominating Committee considers any candidates submitted by stockholders on the same basis as any other candidate. Any stockholder proposing a nomination should submit such candidate’s name, along with curriculum vitae or other summary of qualifications, experience and skills to the Secretary, Newmont Mining Corporation, 6363 South Fiddler’s Green Circle, Greenwood Village, Colorado 80111 USA.

Newmont considers skills, diversity and age in deciding on nominees. The Corporate Governance and Nominating Committee considers a broad range of diversity, including diversity in terms of professional experience, skills and background, as well as diversity of domicile, nationality, race and gender, when evaluating candidates. We consider this through discussions at the Corporate Governance and Nominating Committee meetings. In evaluating a Director candidate, the Corporate Governance and Nominating Committee considers factors that are in the best interests of the Company and its stockholders.

Independence of Directors. The Board affirmatively determines the independence of each Director and each nominee for election as Director. For each individual deemed to be independent, the Board has determined (a) that there is no relationship with the Company, or (b) the relationship is immaterial. The Board has considered the independence standards of the New York Stock Exchange and adopted the categorical independence standards described below.

The Board has determined that the relationships that fall within the standards described in its independence standards are categorically immaterial. As such, provided that no law, rule or regulation precludes a determination of independence, the following relationships are not considered to be material relationships with the Company for purposes of assessing independence: service as an officer, Director, employee or trustee or greater than five percent beneficial ownership in (i) a supplier of goods or services to the Company if the annual sales to the Company are less than $1 million or two percent of the gross revenues or sales of the supplier, whichever is greater; (ii) a lender to the Company if the total amount of the Company’s indebtedness is less than one percent of the total consolidated assets of the lender; (iii) a charitable organization if the total amount of the Company’s total annual charitable contributions to the organization is less than $1 million or two percent of that organization’s total annual gross receipts (excluding any amounts received through the Company’s employee matching program for charitable contributions), whichever is greater; or (iv) any relationship arising out of a transaction, or series of transactions, in which the amount involved is less than $120,000 in aggregate during the last three years. For the avoidance of doubt, the foregoing is intended to identify certain (but not all) relationships which are not considered material relationships for purposes of assessing independence. Any relationships falling outside of those categories are not necessarily deemed material, rather they will be specifically considered by the Corporate Governance and Nominating Committee and the Board in connection with individual independence determinations.

In making its independence determinations, the Board considered the circumstances described below.

Mr. Brook is a director of Boart Longyear Limited, which provides drilling services to the Company, and Programmed Group, which provides certain staffing to the Company. Both the relationship with Programmed Group and with Boart Longyear Limited meet the categorical independence standards in (i) above.

 

Newmont Mining Corporation 2014 Proxy Statement   •  15


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Based on the foregoing analysis, the Board determined that the following Directors are independent:

 

Bruce R. Brook

   Joseph A. Carrabba    Jane Nelson

J. Kofi Bucknor

   Noreen Doyle    Donald C. Roth

Vincent A. Calarco

   Veronica M. Hagen   

In addition, based on these standards, the Board has affirmatively determined that Gary J. Goldberg is not independent because he is President and Chief Executive Officer of the Company.

Stock Ownership of Directors and Executive Officers. As of February 25, 2014, the Directors and executive officers of the Company as a group beneficially owned, in the aggregate, 777,007 shares of the Company’s outstanding capital stock, constituting, in the aggregate, less than 1% of the Company’s outstanding capital stock.

No Director or executive officer beneficially owned (a) more than 1% of the outstanding shares of the Company’s common stock or (b) shares voting power in excess of 1% of the voting power of the outstanding capital stock of the Company. Each Director and executive officer has sole voting power and dispositive power with respect to all shares beneficially owned by them, except as set forth below.

The following table sets forth the beneficial ownership of common stock as of February 25, 2014, held by (a) each then current Director and nominee; (b) the Chief Executive Officer, the Chief Financial Officer and each of the other highly compensated executive officers (the “Named Executive Officers”); and (c) all then current Directors and executive officers as a group. The address for each of the named individuals below is c/o Newmont Mining Corporation, 6363 South Fiddler’s Green Circle, Greenwood Village, Colorado 80111 USA.

 

Name of Beneficial Owner   Common
Stock(1)
    Restricted Stock,
Restricted Stock
Units and  Director
Stock Units(2)(3)
    401(k)
Plan(4) 
    Option
Shares(5)
    Beneficial
Ownership
Total
 

Non-Employee Directors

                                       

Bruce R. Brook

    8,269        —          —          —          8,269   

J. Kofi Bucknor

    6,719        —          —          —          6,719   

Vincent A. Calarco

    4,686        20,716        —           —           25,402   

Joseph A. Carrabba

    —          18,222        —          —          18,222   

Noreen Doyle

    —          20,537        —          —          20,537   

Veronica M. Hagen

    —          20,537        —          —          20,537   

Jane Nelson

    —          8,269        —          —          8,269   

Donald C. Roth

    1,081        20,716        —          —          21,797   

Simon R. Thompson

    —          18,652        —          —          18,652   

Named Executive Officers

                                       

Gary Goldberg(6)

    40,482        —          521        —          41,003   

Laurie Brlas

    —          —          —          —          —     

Elaine Dorward-King

    3,200        2,272        257        —          5,729   

Randy Engel

    75,988        3,171        4,091        150,845        234,095   

Chris Robison

    35,937        —          373        —          36,310   

Richard T. O’Brien

    224,068        —          2,071        300,000        526,139   

Russell Ball(7)

    70,040        —          2,388        —          72,428   

Thomas P. Mahoney

    19,999        4,759        3,691        82,755        111,204   

All Directors and executive officers as a group, including those named above (18 persons)(8)

    272,500        145,634        12,150        346,723        777,007   

 

(1) 

Represents shares of the Company’s common stock held, or which the officer has the right to acquire within 60 days after February 25, 2014, pursuant to Performance Leveraged Stock Units (“PSUs”) and Strategic Stock Units (“SSUs”). PSUs and SSUs are awards granted by the Company and payable, subject to performance and vesting requirements, as set forth more fully below in the CD&A, in shares of the Company’s common stock. Shares underlying PSUs vesting within 60 days after February 25, 2014, for which the performance measurements have been met, are included in this column as follows: Randy

 

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  Engel, 9,052; Richard T. O’Brien, 21,799; Russell Ball, 7,603 and all executive officers as a group, 21,659. Shares underlying SSUs vesting within 60 days after February 25, 2014, for which the performance metrics have been met, are included in this column as follows: Gary Goldberg, 21,297; Elaine Dorward-King, 3,200; Randy Engel, 8,938; Chris Robison, 35,937; Thomas P. Mahoney, 1,831 and all executive officers as a group, 84,150.

 

(2) 

For 2013, director stock units (“DSUs”) were awarded to all non-employee Directors under the 2013 Stock Incentive Compensation Plan, except Messrs. Brook and Bucknor elected to receive shares of the Company’s common stock. The DSUs represent the right to receive shares of common stock and are immediately fully vested and non-forfeitable. The holders of DSUs do not have the right to vote the underlying shares; however, the DSUs accrue dividend equivalents, which are paid at the time the common shares are issued. Upon retirement from the Board of Directors, the holder of DSUs is entitled to receive one share of common stock for each DSU. The amounts noted in this column for non-employee Directors represent DSUs.

 

(3) 

Restricted Stock Units (“RSUs”) and Financial Performance Stock (“FPS”) of the Company’s common stock granted prior to April 24, 2013, were awarded under the Company’s 2005 Stock Incentive Plan and RSUs and Strategic Stock Units (“SSUs”) of the Company’s common stock granted after April 24, 2013, are awarded under the Company’s 2013 Stock Incentive Plan. The RSUs do not have voting rights, and are subject to forfeiture risk and other restrictions. The RSUs accrue dividend equivalents, which are paid at the time the units vest and common stock is issued. Shares underlying RSUs vesting within 60 days after February 25, 2014, are included in this column as follows: Elaine Dorward-King, 2,272; Thomas P. Mahoney, 4,759 and all executive officers as a group, 12,581. This column does not include RSUs that vest more than 60 days after February 25, 2014. Shares underlying FPSs vesting within 60 days after February 25, 2014, for which the performance measurements have been met, are included in this column as follows: Randy Engel, 3,171 and all executive officers as a group, 5,404.

 

(4) 

Includes equivalent shares of the Company’s common stock held by the trustee in the Company’s 401(k) Plans for each participant as of the February 28, 2014, plan statement date and is based on the Company’s estimation of the share value correlated with the number of units in the fund. Each participant in such plan has the right to instruct the trustee as to how the participant’s shares should be voted.

 

(5) 

Includes shares of the Company’s common stock that the executive officers have the right to acquire through stock option exercises within 60 days after February 25, 2014.

 

(6) 

Mr. Goldberg’s ownership includes 5,000 shares held in the Gary J and Beth A Goldberg Revocable Trust.

 

(7) 

Mr. Ball’s ownership includes 1,800 shares of common stock held by his minor children who share the same household.

 

(8) 

Includes only the beneficial ownership of those persons serving as directors and executive officers as of February 25, 2014.

Stock Ownership of Certain Beneficial Owners. The following table sets forth information with respect to each person known by the Company to be the beneficial owner of more than 5% of any class of the Company’s voting securities. The share information contained herein is based on investor filings with the SEC pursuant to Section 13(d) of the Securities Exchange Act of 1934.

 

Name and Address of Beneficial Owner  

Title of

Class

    Amount and
Nature of
Beneficial Ownership
    Percentage
of Class
 

BlackRock, Inc.

    Common Stock                            (1 )      11.2

40 East 52nd Street

       

New York, NY 10022

                       

Van Eck Associates Corporation

    Common Stock        (2 )      5.59

335 Madison Ave. – 19th Floor

       

New York, New York 10017

                       

 

(1) 

As reported on Schedule 13G/A as filed on January 8, 2014, as of December 31, 2013, BlackRock, Inc. and its subsidiaries beneficially owned 55,182,334 shares, had sole voting power of 49,091,467 shares and sole dispositive power of 55,182,334 shares of Newmont common stock.

 

(2) 

As reported on Schedule 13/G as filed on February 12, 2014, as of December 31, 2013, 27,583,993 Common Shares are held within mutual funds and other client accounts managed by Van Eck Associates Corporation (“Van Eck”), none of which individually own more than 5% of the outstanding shares. Van Eck had sole voting power of 27,472,093 shares and sole dispositive power of 27,583,993 shares of Newmont common stock.

 

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Director Compensation. Effective January 1, 2014, the annual compensation for non-employee Directors for their service on the Board of Directors is set forth below. As compared to 2013, the Committee meeting attendance fees were eliminated from the annual compensation packages, which offset the modifications to the annual retainers as detailed below:

 

Annual Retainer:

  $115,000 for each Director
  $25,000 for the Chair of the Audit Committee
  $12,000 for each Audit Committee Member
  $20,000 for the Chairman of the Compensation Committee
  $12,000 for each Compensation Committee Member
  $15,000 for the Chairman of the Corporate Governance and Nominating Committee
  $10,000 for each Corporate Governance and Nominating Committee Member
  $15,000 for the Chairman of the Safety and Sustainability Committee
  $10,000 for each Safety and Sustainability Committee Member
  $275,000 for the Non-Executive Chairman of the Board

Stock Award:

  $140,000 of common stock or director stock units each year under the 2013 Stock Incentive Plan. The fair market value is determined on the first business day following election by the Board or re-election at the Company’s Annual Meeting, or as soon as administratively possible.

During 2013, the annual compensation for non-employee Directors for their service on the Board of Directors was as set forth below:

 

Annual Retainer:

  $110,000 for each Director
  $25,000 for the Chair of the Audit Committee
  $10,000 for each Audit Committee Member
  $20,000 for the Chairman of the Compensation Committee
  $15,000 for the Chairman of each standing committee, other than the Chairman of the Audit Committee and the Chairman of the Compensation Committee
  $275,000 for the Non-Executive Chairman of the Board

Attendance Fees:

  $2,000 for each Committee Meeting
  No attendance fees for Board meetings, except $2,000 for every meeting in excess of 15 per year.

Stock Award:

  $130,000 of common stock or director stock units each year under the 2005 Stock Incentive Plan. The fair market value is determined on the first business day following election by the Board or re-election at the Company’s Annual Meeting, or as soon as administratively possible.

The following table summarizes the total compensation paid or earned by the Company’s non-employee Directors during 2013:

2013 Director Compensation

 

Name(1)   Fees Earned or
Paid in Cash(2)
($)
    Stock Awards(3)
($)
    All Other
Compensation
($)
    Total
($)
 

Bruce R. Brook

    $132,000        $130,000        –0–        $262,000   

J. Kofi Bucknor

    $132,000        $130,000        –0–        $262,000   

Vincent A. Calarco(4)

    $432,000        $130,000        $2,500        $564,500   

Joseph A. Carrabba(5)

    $147,250        $130,000        –0–        $277,250   

Noreen Doyle

    $169,000        $130,000        –0–        $299,000   

Veronica M. Hagen

    $136,000        $130,000        –0–        $266,000   

Jane Nelson

    $120,000        $130,000        –0–        $250,000   

John B. Prescott(6)

    $43,492        $0        –0–        $43,492   

Donald C. Roth

    $156,000        $130,000        –0–        $286,000   

Simon R. Thompson

    $120,000        $130,000        –0–        $250,000   

 

(1) 

Mr. Goldberg’s compensation is shown in the Summary Compensation Table.

 

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(2) 

The amounts reported in this column represent all cash paid in 2013 for the annual retainer fees, chairmanships of the Board, and of the committees, as well as fees paid for attendance at committee meetings. Details are as follows:

 

Name   Annual
Retainer Fees
($)
    Chairmanships
($)
    Committee
Meeting Fees
($)
    Total
($)
 

Bruce R. Brook

    $120,000        $0        $12,000        $132,000   

J. Kofi Bucknor

    $120,000        $0        $12.000        $132,000   

Vincent A. Calarco

    $120,000        $290,000        $22,000        $432,000   

Joseph A. Carrabba

    $110,000        $11,250        $26,000        $147,250   

Noreen Doyle

    $120,000        $25,000        $24,000        $169,000   

Veronica M. Hagen

    $110,000        $0        $26,000        $136,000   

Jane Nelson

    $110,000        $0        $10,000        $120,000   

John B. Prescott

    $34,753        $4,739        $4,000        $43,492   

Donald C. Roth

    $110,000        $20,000        $26,000        $156,000   

Simon R. Thompson

    $110,000        $0        $10,000        $120,000   

 

(3) 

For 2013, all non-employee Directors elected to receive $130,000 in the form of director stock units (“DSUs”), except Messrs. Brook and Bucknor who elected to receive their awards in the form of the Company’s common stock. The amounts set forth next to each award represent the aggregate grant date fair value of such award computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 718 (“ASC 718”) which was the average of the high and low sales price on the date of grant, April 25, 2013 of $34.68. There are no other assumptions made in the valuation of the stock awards.

 

(4) 

The amount shown as All Other Compensation represents contributions made under the Company’s charitable Matching Gifts Program. Non-Employee Directors are eligible to participate in the Company’s Matching Gifts Program on the same basis as employees, pursuant to which the Company will match dollar-for-dollar, contributions to qualified tax-exempt organizations, not more than $10,000 per eligible donor per calendar year.

 

(5)

Mr. Carrabba became chairman of the Safety and Sustainability Committee effective April 24, 2013, and therefore received a prorated Chairman fee.

 

(6)

Mr. Prescott retired from the Board effective as of April 24, 2013.

Outstanding Awards. The following table shows outstanding equity compensation for all non-employee Directors of the Company as of December 31, 2013, calculated with the closing price of $23.03:

 

     Stock Awards(1)  
Name   Aggregate
Director
Stock Units
Outstanding
(#)
    Market Value
of Outstanding
Director Stock
Units
($)
 

Bruce R. Brook

    —         —    

J. Kofi Bucknor

    —         —    

Vincent A. Calarco

    20,716        $477,089   

Joseph A. Carrabba

    18,222        $419,653   

Noreen Doyle

    20,537        $472,967   

Veronica M. Hagen

    20,537        $472,967   

Jane Nelson

    8,269        $190,435   

Donald C. Roth

    20,716        $477,089   

Simon R. Thompson

    18,652        $429,556   

 

(1) 

In 2013, Messrs. Brook and Bucknor elected to receive their director equity awards in the form of common stock rather than in the form of DSUs, which amount is included in the Common Stock column of the Stock Ownership of Directors and Executive Officers Table set forth above. See footnote 2 to such table.

Share Ownership Guidelines. All Directors are encouraged to have a significant long-term financial interest in the Company. To encourage alignment of the interests of the Directors and the stockholders, each Director is expected to beneficially own shares of common stock (or hold director stock units) of the Company having a

 

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market value of five times the annual cash retainer payable under the Company’s Director compensation policy. Directors elected before January 1, 2011, are expected to meet this requirement. Directors elected after January 1, 2011, are expected to meet this requirement within five years of becoming a Director. Taking into consideration the volatility of the stock market, the impact of gold, copper and other commodity price fluxuations on the Company’s share price and the long-term nature of the ownership guidelines, it would be inappropriate to require Directors to increase their holdings because of a temporary decrease in the price of the Company’s shares. As such, once the guideline is achieved, future fluctuations in price are not deemed to affect compliance. Specifically, if a decline in the Company’s share price causes a Director’s failure to meet the guideline, the Director will not be required to purchase additional shares, but such Director will refrain from selling any shares until the threshold has again been achieved. Compliance is evaluated on a once-per-year basis, as of December 31 of each year. As of December 31, 2013, all Directors either met the share ownership guidelines or fell within the exceptions to the guidelines.

Compensation Consultant. The Board of Directors has engaged Frederic W. Cook & Co. (“Cook & Co.”) during 2013 to assist in the evaluation of independent Director compensation. For a description of executive compensation consulting services provided by Cook & Co. to the Compensation Committee of the Board of Directors, see page 35 of the Compensation Discussion and Analysis.

 

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Committees of the Board of Directors

and Attendance

Attendance at Meetings. During 2013, the Board of Directors held ten meetings. Each incumbent Director attended 75% or more of all meetings of the Board of Directors and committees of the Board of Directors on which he or she served. It is the policy and practice of the Company that nominees for election at the Annual Meeting of Stockholders attend the meeting. All of the Board members at the time of the 2013 Annual Meeting of Stockholders held on April 24, 2013, attended the meeting.

Board Committees. The Board of Directors has, in addition to other committees, Audit, Compensation, Corporate Governance and Nominating, and Safety and Sustainability Committees. All members of these four committees are independent, as defined in the listing standards of the New York Stock Exchange and the Company’s Corporate Governance Guidelines. Each Committee functions under a written charter adopted by the Board, which are available on our website at http://www.newmont.com/our-investors/our-governance. The current members of these Committees and the number of meetings held in 2013 are shown in the following table:

 

Audit Committee Members(1)

  Functions of the Committee   Meetings
in 2013

Noreen Doyle, Chair

 

Bruce R. Brook

 

J. Kofi Bucknor

 

Vincent A. Calarco

 

  assists the Board in its oversight of the integrity of the Company’s financial statements

  6
 

  assists the Board in its oversight of the Company’s compliance with legal and regulatory requirements and corporate policies and controls

   
 

  authority to retain and terminate the Company’s independent auditors

   
 

  approve auditing services and related fees and pre-approve any non-audit services

   
 

  responsible for confirming the independence and objectivity of the independent auditors

   
 

  please refer to “Report of the Audit Committee” on page 80

   

 

Compensation Committee Members   Functions of the Committee   Meetings
in 2013

Donald C. Roth, Chair

 

Joseph A. Carrabba

 

Veronica M. Hagen

 

  determines the components and compensation of the Company’s key employees, including its executive officers, subject to ratification by the full Board for CEO compensation

  8
 

  reviews plans for management development and senior executive succession

   
 

  administers (determines) awards of stock based compensation, which for the CEO are subject to ratification by the full Board of Directors

   
 

  please refer to “Report of the Compensation Committee on Executive Compensation” and the “Compensation, Discussion and Analysis” beginning on pages 25 and 26, respectively

   

 

Corporate Governance and Nominating Committee Members   Functions of the Committee   Meetings
in 2013

Vincent A. Calarco, Chair

 

Noreen Doyle

 

Donald C. Roth

 

  proposes slates of Directors to be nominated for election or re-election

  6
 

  proposes slates of officers to be elected

   
 

  conducts annual Board and committee evaluations

   
 

  conducts evaluations of the performance of the Chief Executive Officer

   
 

  responsible for recommending amount of Director compensation

   
 

  advises Board of corporate governance issues

   

 

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Safety and Sustainability

Committee Members(2)

  Functions of the Committee   Meetings
in 2013

Joseph A. Carrabba, Chair(3)

 

Veronica M. Hagen

 

Jane Nelson

 

Simon R. Thompson

 

  assists the Board in its oversight of safety issues

  5
 

  assists the Board in its oversight of sustainable development, environmental affairs, community relations and communications issues, including oversight of the Company’s Beyond the Mine Report

   
 

  assists the Board in furtherance of its commitments to adoption of best practices in promotion of a healthy and safe work environment, and environmentally sound and socially responsible resource development

   
 

  administers the Company’s policies, processes, standards and procedures designed to accomplish the Company’s goals and objectives relating to these issues

   

 

(1) 

The Board of Directors has determined that each of the members of the Audit Committee is an Audit Committee Financial Expert, as a result of his or her knowledge, abilities, education and experience.

 

(2) 

The name of the Environmental, Social Responsibility, Operations and Safety Committee and the Charter were changed to the Safety and Sustainability Committee effective June 6, 2013. The authority, structure, operations, purpose, responsibilities and specific duties of the Safety and Sustainability Committee are described under its written charter adopted by the Board which is available on our website at http://www.newmont.com/our-investors/our-governance.

 

(3) 

Mr. Carrabba was elected Chair effective April 23, 2013.

 

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Corporate Governance

Corporate Governance Guidelines and Charters. The Company has adopted Corporate Governance Guidelines that outline important policies and practices regarding the governance of the Company. In addition, each of the committees has adopted a charter outlining responsibilities and operations. The Corporate Governance Guidelines and the charters are available on our website at http://www.newmont.com/our-investors/our-governance.

Board Leadership and Independent Chairman. The Board of Directors selects the Chairman of the Board in the manner and upon the criteria that it deems best for the Company at the time of selection. The Board of Directors does not have a prescribed policy on whether the roles of the Chairman and Chief Executive Officer should be separate or combined. At all times, the Board of Directors has either a Non-Executive Chairman or Lead Director of the Board, which Chairman or Lead Director will meet the Company’s independence criteria and will be elected annually by the independent members of the Board of Directors.

Before 2008, the positions of Chairman of the Board and Chief Executive Officer were held by a single person. Due to the potential efficiencies of having the Chief Executive Officer also serve in the role of Chairman of the Board and the long tenure of the Chief Executive Officer, the Board of Directors determined that the interests of the Company and its stockholders were best served by the leadership and direction provided by a single person as Chairman and Chief Executive Officer. In 2007, the Board of Directors considered a stockholder proposal included in the 2007 Proxy Statement regarding the separation of such roles. The Board agreed to separate the roles as of January 1, 2008, in response to the stockholder vote and the Board’s determination regarding what was in the best interest of the Company at such time. The Board will continue to evaluate whether this leadership structure is in the best interests of the stockholders on a regular basis.

In January 2008, the independent members of the Board of Directors elected Vincent A. Calarco as independent Non-Executive Chairman of the Board. Mr. Calarco has been re-elected each year since 2008 as Non-Executive Chairman. He presides at Independent Directors sessions scheduled at each regular Board meeting. The Non-Executive Chairman serves as liaison between the Chief Executive Officer and the other Independent Directors, approves meeting agendas and schedules and notifies other members of the Board of Directors regarding any significant concerns of stockholders or interested parties of which he or she becomes aware. The Non-Executive Chairman presides at stockholders meetings and provides advice and counsel to the Chief Executive Officer.

Board Oversight of Risk Management. The Board of Directors is engaged in company-wide risk management oversight. Directors are entitled to rely on management and the advice of the Company’s outside advisors and auditors, but must at all times have a reasonable basis for such reliance. The Board of Directors relies upon the Chief Executive Officer and Chief Financial Officer to supervise the day-to-day risk management, each of whom provides reports directly to the Board of Directors and certain Board Committees, as appropriate. The Company has a global Enterprise Risk Management team, led by the Company’s Vice President and Treasurer. The Enterprise Risk Management team’s objectives include conducting the compensation risk assessment and reporting the process and findings to the Audit Committee, the Compensation Committee and Safety and Sustainability Committee regularly, and to the full Board of Directors on at least an annual basis.

The Board of Directors also delegates certain oversight responsibilities to its Board Committees. For a description of the functions of the various Board Committees, see “Board Committees” above. For example, while the primary responsibility for financial and other reporting, internal controls, compliance with laws and regulations, and ethics rests with the management of the Company, the Audit Committee provides risk oversight with respect to the Company’s financial statements, the Company’s compliance with legal and regulatory requirements and corporate policies and controls, the independent auditor’s selection, retention, qualifications, objectivity and independence, and the performance of the Company’s internal audit function. Additionally, the Compensation Committee provides risk oversight with respect to the Company’s compensation program. For a discussion of the Compensation Committee and Enterprise Risk Management team’s assessments of compensation-related risks, see “Compensation Discussion and Analysis — Executive Compensation Risk Assessment.” The Safety and Sustainability Committee provides oversight and direction with regard to environmental, social responsibility, community relations and safety risks.

Communications with Stockholders or Interested Parties. Any stockholder or interested party who desires to contact the Company’s Chairman, the non-management directors as a group or the other members of

 

Newmont Mining Corporation 2014 Proxy Statement   •  23


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the Board of Directors may do so by writing to the Secretary, Newmont Mining Corporation, 6363 South Fiddler’s Green Circle, Greenwood Village, Colorado 80111 USA. Any such communication should state the number of shares owned, if applicable. The Secretary will forward to the Chairman any such communication addressed to him, the non-employee Directors as a group or to the Board of Directors generally, and will forward such communication to other Board members, as appropriate, provided that such communication addresses a legitimate business issue. Any communication relating to accounting, auditing or fraud will be forwarded immediately to the Chair of the Audit Committee.

Majority Voting Policy. The Company’s By-Laws to require that in an uncontested election each Director will be elected by a vote of the majority of the votes cast, which means the number of votes cast “for” a Director’s election exceeds 50% of the number of votes cast with respect to that Director’s election. Notwithstanding the foregoing, in the event of a “contested election” of the Directors (as defined in the Company’s By-Laws), Directors shall be elected by the vote of a plurality of the votes cast at any meeting for the Election of Directors at which a quorum is present.

If a nominee for Director does not receive the vote of at least a majority of votes cast at an Annual Meeting, it is the policy of the Board of Directors that the Director must tender his or her resignation to the Board. In such a case, the Corporate Governance and Nominating Committee will make a recommendation to the Board, whether to accept or reject the tendered resignation, taking into account all of the facts and circumstances. The Director who has tendered his or her resignation will not take part in the deliberations. For additional information, our Corporate Governance Guidelines describing this policy are available on our website at www.newmont.com/our-investors/our-governance.

Retirement Age. The Company’s retirement policy for non-employee Directors provides that, except at the request of the Board of Directors, no non-employee Director may stand for re-election to the Board after reaching age 75. As of December 31, 2013, the average age of members of our Board of Directors was approximately 61 and the average tenure of our Board of Directors was approximately 6 years.

Code of Business Ethics and Conduct. Newmont has adopted a Code of Business Ethics and Conduct (the “Code”) applicable to all of its Directors, officers and employees, including the Chief Executive Officer, the Chief Financial Officer, the Chief Accounting Officer and other persons performing financial reporting functions. The Code is available on our website at http://www.newmont.com/our-investors/our-governance. The Code is designed to deter wrongdoing and promote: (a) honest and ethical conduct; (b) full, fair, accurate, timely and understandable disclosures; (c) compliance with laws, rules and regulations; (d) prompt internal reporting of Code violations; and (e) accountability for adherence to the Code. Newmont will post on its website a description of any amendment to the Code and any waiver, including any implicit waiver, by Newmont of a provision of the Code to a Director or executive officer (including senior financial officers), the name of the person to whom the waiver was granted and the date of the waiver.

Related Person Transactions. The Board has adopted written policies and procedures for approving related person transactions. Any transaction with a related person, other than transactions available to all employees generally or involving aggregate amounts of less than $120,000, must be approved or ratified by the Audit Committee, the Compensation Committee for compensation matters, or disinterested members of the Board. The policies apply to all executive officers, Directors and their family members and entities in which any of these individuals has a substantial ownership interest or control.

 

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Report of the Compensation Committee on Executive Compensation

The Compensation Committee of the Board of Directors (the “Compensation Committee”) is composed entirely of Directors who are not officers or employees of the Company or any of its subsidiaries, and are independent, as defined in the listing standards of the New York Stock Exchange and the Company’s Corporate Governance Guidelines. The Compensation Committee has adopted a Charter that describes its responsibilities in detail, and the Compensation Committee and Board review and assess the adequacy of the Charter on a regular basis. The Compensation Committee has the responsibility of taking the leadership role with respect to the Board’s responsibilities relating to compensation of the Company’s key employees, including the Chief Executive Officer, the Chief Financial Officer and the other executive officers. Additional information about the Compensation Committee’s role in corporate governance can be found in the Compensation Committee’s Charter, available on the Company’s website at http://www.newmont.com/our-investors/our-governance.

The Compensation Committee has reviewed and discussed with management the Company’s Compensation Discussion and Analysis section of this Proxy Statement. Based on such review and discussions, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis section be included in this Proxy Statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Submitted by the following members of the Compensation Committee of the Board of Directors:

Donald C. Roth, Chairman

Joseph A. Carrabba

Veronica M. Hagen

 

Newmont Mining Corporation 2014 Proxy Statement   •  25


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Compensation Discussion

and Analysis

Our Compensation Discussion and Analysis (“CD&A”) describes Newmont’s executive compensation programs and compensation decisions in 2013 for our Named Executive Officers (“Officers”), who for 2013 includes:

 

Name   Title

Gary Goldberg

  President and Chief Executive Officer

Laurie Brlas

  Executive Vice President and Chief Financial Officer

Elaine Dorward-King

  Executive Vice President, Sustainability and External Relations

Randy Engel

  Executive Vice President, Strategic Development

Chris Robison

  Executive Vice President, Operations and Projects

Thomas Mahoney

  Former Interim Chief Financial Officer (currently Vice President, Treasurer)

Richard T. O’Brien1

  Former Chief Executive Officer

Russell Ball1

  Former Executive Vice President and Chief Financial Officer

 

(1) 

On March 1, 2013, Mr. O’Brien separated employment with Newmont; on May 2, 2013, Mr. Ball separated employment with Newmont.

 

      Page  
  

Table of Contents:

 

  Executive Summary: Provides the highlights of the Company’s business performance, executive compensation structure and the alignment of pay and performance, as well as the key Compensation Committee actions in 2013

  

 

 

 

27

 
  

 

  Philosophy and Principles: Overview of the compensation philosophy and principles for executive compensation at Newmont

  

 

34

 
  

 

  Components of Total Compensation: Provides details of the components of executive pay, how they are structured and why they are used

  

 

35

 
  

 

  2013 Compensation: Provides context for executive compensation given transitions in 2013 and the details regarding 2013 pay and incentive programs

  

 

39

 
  

 

  "Realizable" Compensation for 2013: Due to the executive transitions in 2013, this table is provided as a supplement to assist stockholders with understanding the incentive compensation awarded or granted to executives as of December 31, 2013

 

  

 

55

 
  

  Post-Employment Compensation: Provides information on separation and retirement policies

   56  
  

 

  Other Policies and Considerations: Provides information on other policies, governance, risk and related items

 

  

 

58

 

 
       

 

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Executive Summary

COMPANY OVERVIEW

Newmont is one of the world’s largest gold producers, is the only gold company included in the S&P 500 Index and Fortune 500, and has been included in the Dow Jones Sustainability Index-World for seven consecutive years. The Company is also engaged in the exploration for and acquisition of gold and gold/copper properties. The Company has significant operations and/or assets in the United States, Australia, Peru, Indonesia, Ghana, Mexico, Suriname and New Zealand. In addition to being a leading gold producer, we remain dedicated to our industry-leading safety, environmental, social and community relations commitments.

2013 MARKET AND INDUSTRY CONTEXT

2013 was a year of extraordinary volatility in the mining industry and for gold-focused companies in particular. Gold prices continued to be under pressure, declining nearly 30% during the year. The drop in the gold price was largely related to macroeconomic forces such as interest rates, strength of the U.S. dollar and the lack of realized or anticipated inflation. As the U.S. and other economies displayed signs of improvement, investor preference trended away from commodity-based gold mining stocks towards potentially higher yields, furthering the decline in gold industry market capitalization. As a reflection of these events, during 2013, the Philadelphia Gold and Silver Index declined by approximately 50% and the aggregated total shareholder return (TSR) for major gold companies declined by an average of over 50%, underscoring the impacts noted above. As Newmont’s stock price is highly correlated and dependent on gold price, the Company was not immune to the industry shift and incurred a similar decline of approximately 50% in its TSR during the year. However, while noting the decline, relative to our gold competitors, Newmont performed above average (73rd percentile) in part due to a higher yield provided to stockholders.

The change in gold price and relative effect on the Philadelphia Gold and Silver index (XAU) and Newmont’s stock price (NEM) is displayed in the following charts:

 

LOGO

 

LOGO

 

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HOW NEWMONT HAS RESPONDED TO MARKET DYNAMICS

We moved quickly to address the market shift. Based on the Company’s succession planning process, we were able to establish a new leadership team to redirect the strategy and operations for 2013 and beyond. This began with the promotion of Mr. Gary Goldberg from President and Chief Operating Officer to the role of President and Chief Executive Officer in March 2013. Upon his promotion, Mr. Goldberg established a new leadership team, increasing the technical competency and diversity of the executive staff by recruiting accomplished mining executives in key roles such as Chief Financial Officer, Operations and Projects, Sustainability and External Relations, and Technical Services.

In 2013, the Company took the steps necessary to reposition the business in a challenging gold price environment, aggressively reducing costs while continuing to focus on safety and sustainability. During the year, Newmont delivered on the production targets, improved operational efficiencies and commissioned two new projects on time and on budget. Looking ahead, the Company is committed to strengthening the balance sheet and delivering value to stockholders by driving cash flow through further cost reductions, generating strong returns from assets and investing only in opportunities that enhance value, extend mine life, lower cost, and reduce risk in our portfolio of assets.

 

    
  

2013 BUSINESS RESULTS — OPERATING PERFORMANCE HIGHLIGHTS

 

Based on the positioning as noted above, in 20131 Newmont:

 

  Significantly exceeded cost reduction targets, reducing full year consolidated spending2 by nearly $1 billion ($966 million) year-over-year through our Full Potential/continuous improvement programs, a reconfigured operating model and restructuring;

 

  Delivered the top end of the 2013 Outlook on attributable gold production3 at 5.1 million ounces;

 

  Generated operating cash flow of $1.6 billion4, strengthening our balance sheet to support sustaining operations and future growth;

 

 Achieved the best safety performance on record and among the highest in the International Council on Mining and Metals (ICMM);

 

 Completed construction of new mining operations in Ghana and in the U.S., safely, on time and on budget; and

 

  Strengthened internal processes to evaluate investments, increase mine life, decrease cost and manage risk with our Technical Services department, Value Assurance department and Investment Committee.

(1)     See our 2013 Annual Report on Form 10-K under the heading “Management’s Discussion and Analysis” and 2013 earnings release dated February 20, 2014 for further details on Newmont’s 2013 results.

 

(2)     Consolidated spending is a non-GAAP measure. A reconciliation to costs applicable to sales, which was $5,186 million and $4,238 million for the twelve months ended December 31, 2013 and 2012, respectively, is provided in the Company’s earnings release, dated February 20, 2014.

 

(3)     Note regarding 2013 revenue: While gold production remained relatively steady year-over-year, sales decreased by 16% due to lower average realized gold price. To offset the reduced gold price, the Company focused on cost reductions and exceeded reduction targets for 2013.

 

(4)     Operating cash flow as used above refers to net cash provided from continuing operations. Note regarding 2013 earnings: In 2013, Newmont incurred asset impairments/write-downs of approximately $4.4 billion largely due to the reduction in long-term gold price assumptions, and higher operating costs due to grade, stripping and lower metal recoveries. However, these charges do not impact the Company’s cash flow and are considered one-time charges.

 

 
    
    

 

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COMPENSATION FRAMEWORK — BALANCING EXECUTIVE COMPENSATION IN THE COMMODITIES INDUSTRY

Our stock price is heavily influenced by gold, copper and other commodity prices, which are in turn primarily driven by macroeconomic factors that are outside of the Company’s control. Since our stock price is significantly influenced by these external factors, Newmont’s compensation program is designed to focus management’s 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 performance elements that support the goal of 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:

 

 

Annual and Long-Term Performance

 

  Operations and Market Performance
 

Absolute and Relative Performance

 

  Company and Individual Performance

While providing incentives for performance, the design of our program is intended to mitigate excessive risk taking by executives. Our Compensation Committee 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.)

PAY FOR PERFORMANCE STRUCTURE

Company results on operational, financial and relative stockholder return measures (the “incentive measures”) have a direct link to our incentive compensation plans. We believe our incentive measures are the key drivers for business results, support sustained long-term performance, and promote stockholder alignment as shown in our executive compensation structure below.

 

    
  

Newmont’s Executive Compensation Structure—

Portfolio of Leadership Measures

(percentages reflect mix of target compensation for the CEO)

 

LOGO

 

 
    

 

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SUMMARY OF 2013 PERFORMANCE AND RESULTING PAY

The Company’s performance on the incentive measures is directly correlated to the pay received by the Company’s Officers. Components of compensation for Officers increased or decreased in 2013 based on the level of achievement of these goals as further explained below. (See the “2013 Compensation” section of this Proxy Statement for additional information on the measures, results and payments.)

SUMMARY OF 2013 INCENTIVE MEASURES, COMPANY PERFORMANCE AND RESULTING COMPENSATION

The Company had strong 2013 operating performance which resulted in a corresponding 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. Noting the exceptional gold price and mining industry volatility over the past two years, performance for the long-term market measures was below target and resulted in payouts that are, as designed, below the target values for each long-term program.

 

Newmont’s Incentive Plans1   Incentive Plan
Measure(s)
  Corporate Metric /
Goal Supported
  Newmont Performance
vs. Target
  Resulting Officer
Compensation
  Overall
Payout Value2
Annual Operating Measures

Corporate Performance Bonus
(Annual Incentive Plan)

  Safety   Core Value;
Safe Production
  Significantly Above Target   Above target   143% of
Target
  Gold and
Copper Production
  Revenue   Above Target
for Gold;
Below for
Copper
  Above Target for Gold;
Below for Copper
 
  Total Cost   Expense   Exceeded Cost Reduction Target   Above target  
  Project Execution   Future Production/
Revenue
  Above Target   Above target  
  Reserves   Assets; Future
Revenue
 

Significantly

Below Target

  Below target  
  Resources   Assets; Future
Revenue
  Above Target   Above target  

Personal Objectives

  Key Annual
Objectives
  Safety,
Operations,
Leadership
  Above Target   Above Target   129% of
Target

Long-term Market (Stock) Based Measures

Strategic Stock Units

(Performance-based

Long-term Incentive)

  EBITDA & Stock
Price
  Profitability &
Stock Price
Performance
  Plan Performance Below Target at 97%   Below Target Due to Plan Performance Below Target and Declining Stock Price Over Performance Period   Below Target
Value3 60%
                     

Performance-Leverage Stock

Units (Performance-based

Long-term Incentive)

  Stock Price   Stock Price
Performance
  Plan Performance Below Target at 50%   Below target   Below Target
Value4 36%
  Total Stockholder
Return vs. Peers
  Stock Price
Performance plus
Dividends vs.
Peers
  Above Target - 73rd percentile adding 46% to Plan Performance   Above target  

 

(1) 

The Personal Objectives Bonus varies for each Officer based on their performance against stated goals; a summary of each Officer’s results and corresponding bonus award is provided in the section “2013 Compensation.”

 

(2) 

Long-term incentive program results are based on program performance and change in stock price from the date of the award; resulting share payments are based on Newmont’s stock price value as of 12/31/13 of $23.03.

 

(3) 

Represents Officers’ average value as a percent of target value based on plan performance of 97% and decrease in stock price over the performance period.

 

(4) 

Represents value as a percent of target value for the 2011-2013 performance period; includes plan performance of 96% (50% for stock price performance plus 46% for 73rd percentile relative TSR performance) and decrease in stock price over the performance period.

 

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As our leadership is responsible for long-term performance aligned with stockholder interests, our compensation is substantially weighted to long-term results as shown in the table below. Therefore, while the Company experienced strong operating results in 2013, exceeding our cost and production targets, the above target annual bonus payments are overshadowed by the decline in market share price performance. With this, incentive compensation value for the year measured as of December 31, 2013 was below target at approximately 70% of target value as noted in the following table:

 

LOGO

The above table represents an average of NEO (excluding Messrs. O’Brien, Ball and Mahoney) incentive pay (not including salary)

  (1) 

Percent of total target incentive pay; based on average NEO incentive mix.

  (2) 

Represents the average of NEO Personal Objectives bonus as performance and bonus awards vary by Officer.

  (3) 

Based on EBITDA performance of 98.5%; payout result of 97% multiplied by ending stock price as a % of target.

  (4) 

For officers eligible for the plan in 2011; PSU performance result was 96%, multiplied by ending stock price as a % of target.

SUMMARY OF 2013 CEO COMPENSATION

As noted above, Mr. Goldberg assumed the role of President and Chief Executive Officer on March 1, 2013 after serving as the Company’s President and Chief Operating Officer. Upon his promotion to the role, Mr. Goldberg’s salary and performance incentive targets were adjusted commensurate with his new role based on various factors reviewed by the Compensation Committee which included market information, internal comparisons, performance and recent compensation. Mr. Goldberg did not receive promotional or other forms of compensation outside of the standard structure upon assuming the role. Target compensation for Mr. Goldberg was set as follows upon his promotion to President and Chief Executive Officer which approximated the 25th-50th percentile of the peer group data at the time of the analysis:

 

Annual Salary   Annual Incentives     Long-Term Incentives         
  Corporate Performance
Bonus Target
    Personal Objectives
Target
    Strategic Stock
Units
    Performance
Leveraged
Stock Units
    Total Target
Compensation
 

$1,075,000

    $806,250        $806,250        $1,791,667        $3,583,333        $8,062,500   

% of Salary

    75%        75%        167%        333%           

This table is not intended to replace the Summary Compensation Table, but as a supplement to understand target compensation upon promotion to CEO.

While the above chart provides the target CEO compensation for 2013, Mr. Goldberg’s compensation varies from the amounts above as his pay was prorated for the period of time serving in each of the President and Chief Operating Officer role and the President and Chief Executive Officer role. Compensation for 2013 also varies from the amounts above based on actual performance for each of the programs. Details regarding Mr. Goldberg’s compensation are provided in the section “2013 Compensation” and in the Summary Compensation Table located on page 61.

Mr. Richard O’Brien, former Chief Executive Officer, separated employment on March 1, 2013. Mr. O’Brien received severance compensation in accordance with the standard terms of the Executive Severance Plan of Newmont as further described later in this CD&A and as disclosed in the Summary Compensation Table on page 61.

 

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CEO PAY FOR PERFORMANCE

Newmont regularly reviews the compensation programs to ensure they align with key business results, are aligned with stockholder interests and to ensure actual pay aligns with overall performance. As a supplement to other compensation information in this proxy statement, following is a summary of Newmont’s total CEO compensation for the prior three years. The chart is structured to assist in understanding the “realizable” compensation and its relationship to the Company’s performance as measured by three-year total shareholder return (“TSR”). As noted below, while Newmont’s three year TSR has declined, total “realizable” compensation has declined as well, and is approximately 50% of granted compensation for the same period.

 

LOGO

 

Note: Three-year compensation is based on pay for Mr. O’Brien, Former Chief Executive Officer for 2011 and 2012, and Mr. Goldberg for 2013. Mr. Goldberg’s CEO salary was annualized for the analysis to more accurately reflect CEO pay since he assumed the role on March 1, 2013.

 

   

Total Realizable Pay: We believe this provides the most valid measure of incentive compensation at a point in time as it reflects the actual end-of-year compensation value as:

Salary + actual bonus + intrinsic value1 of stock options + intrinsic value of performance stock programs2

 

   

Total Reported Pay: Sum of compensation as reported in the Summary Compensation Table for the prior three years excluding the change in pension value and all other compensation

 

   

Total Granted Pay: Salary + target bonus + grant date fair value of all equity awards during the prior three years

 

  (1) 

“Intrinsic value” is calculated using the closing price on December 31, 2013 which was $23.03.

 

  (2) 

Based on actual performance if known, or estimated performance.

2013 SAY ON PAY VOTE

Newmont has historically received strong support from stockholders in favor of the “Advisory Vote on the Compensation of the Name Executive Officers” (“Say on Pay”). In 2011 and 2012 we received a 95% vote in favor, increasing in 2013 to a 97% vote in favor (excluding abstentions). Additional information regarding the “Say on Pay” vote is on pages 58 and 81-82. While our historical results indicate strong support for Newmont’s Officer compensation, the Compensation Committee continues to review our executive compensation structure to increase its effectiveness and further align with stockholder interests in light of changing industry dynamics.

SUMMARY OF KEY 2013 COMPENSATION COMMITTEE ACTIONS

The following highlights some of the key actions by the Compensation Committee in 2013:

 

 

Established Appropriate Compensation for the New CEO: Determined the level and structure of compensation for the newly promoted CEO which provides appropriate performance and retention incentives without providing additional promotional awards;

 

 

Revised the Annual Corporate Performance Bonus: Revised the annual Corporate Performance Bonus which included incorporating key safety metrics, a comprehensive total cost metric and improved project metrics to better align with current business drivers and improve the objectivity of the program;

 

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Adopted a New Stockholder Approved Stock Incentive Compensation Plan: The new plan included an updated and improved governance structure for long-term incentive programs and is structured to comply with tax-qualified performance-based requirements;

 

 

Conducted a Review of Independent Consultants: As a matter of governance practice, to gain insights from alternate advisors and review overall fees, the Committee conducted interviews of independent advisors and retained Frederic W. Cook & Co., Inc. (“Cook & Co.”) as later discussed in the CD&A; and

 

 

Incorporated Regular Talent, Leadership Succession, Global Inclusion and Diversity Reviews: Implemented regular reviews of the Company’s talent programs and leadership succession, as well as reviews of global inclusion and diversity providing oversight of the Company’s programs which are aligned with core values and Newmont’s focus on sustainability.

FOUNDATIONAL EXECUTIVE COMPENSATION PRACTICES

The actions above build upon our strong governance model and other policies that are in place, including:

 

 

Competitive Stock Ownership Requirements: Stock ownership requirements for Officers to own significant holdings of Newmont stock (five times salary for the CEO);

 

 

Well-Managed “Burn Rate”: Annual employee stock issuance “burn rate” under 1%;

 

 

Appropriate Vesting Terms: Equity grant practices for standard annual awards with at least three year combined performance and vesting periods for Officer awards;

 

 

Compensation Clawback Provision: A clawback policy to recover excess compensation from incentive payouts and stock gains if the financial results were misstated, whether intentionally or by administrative error;

 

 

No Hedging, Pledging or Margin Policy: Stock trading policy prohibiting executives from buying Newmont stock on margin, or hedging Newmont stock holdings;

 

 

Double-Trigger Change of Control: Change-of-control plans that provide payments only upon termination following a change-of-control (“double-trigger”), including stock acceleration only upon a double-trigger beginning with 2012 grants;

 

 

Discontinued Excise Tax Gross-ups for Employees Hired/Promoted into Change of Control Eligible roles in or after 2012: As of January 1, 2012, the new Change of Control plan removes the excise tax gross up for employees hired into, or current employees promoted into, eligible positions. The prior plan containing gross-ups remains in place for employees who were eligible on, or prior to, December 31, 2011 per plan requirements; three of the six active Officers listed in this CD&A are covered under the 2012 plan which does not provide the excise tax gross-up; additional details are provided in the section “Post Employment Compensation;”

 

 

No Employment Agreements: No employment agreements for Officers;

 

 

No Repricing: Prohibition against the repricing of stock options without stockholder approval;

 

 

Committee Governance Model: Compensation Committee operating model and annual work plan to support the governance activities of the Compensation Committee;

 

 

Committee Charter Review: The Compensation Committee Charter is reviewed on a regular basis to ensure it is current with best practices and maintains high governance standards;

 

 

Independent Committee Advisor: Use of an independent compensation consultant, Cook & Co., to advise the Compensation Committee regarding executive compensation (the consultant does not perform any other services for the Company);

 

 

Audit of Incentive Plan Processes, Results and Payments: The Internal Audit function (which formally reports to the Audit Committee of the Board of Directors) reviews plan processes and calculations to ensure accuracy, and to ensure that the results and payments conform to the rules contained within each respective plan;

 

 

Regular Executive Sessions: Executive sessions of the Compensation Committee without management present; and

 

 

Succession Planning: Executive succession planning review by the Compensation Committee and Board of Directors.

 

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Philosophy and Principles

Compensation Philosophy. Newmont’s 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 Newmont’s 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 welcome stockholder input and have regularly responded to feedback from stockholders in this regard.

Transparency and open disclosure are core components of Newmont’s values.

Structural Principles that Guide Appropriate Compensation Design. The following table outlines the guiding principles in structuring our executive compensation plans:

 

LOGO

 

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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.

 

LOGO

Developing Our Executive Compensation Program. Each year the Compensation Committee conducts a detailed analysis of executive compensation designed to:

 

 

Assess the competitiveness of the Company’s 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 Compensation Committee meets on a regular basis with the Chief Executive Officer and representatives from the Company’s Human Resources and Corporate Legal departments. The role of management is to provide the Compensation Committee with perspectives on the business context and individual performance of our Officers to assist the Compensation Committee in making its decisions. The Company’s Human Resources Department supports the Compensation Committee by providing data and analyses on compensation levels and trends. In addition, external independent compensation experts consult with the Compensation Committee regarding specific topics as further described in the following paragraph. An executive session, without management present, is generally held at the end of each Compensation Committee meeting. The independent members of the Board of Directors make all decisions regarding the Chief Executive Officer’s compensation in executive session, upon the recommendation of the Compensation Committee. The Compensation Committee Chairman provides regular reports to the Board of Directors regarding actions and discussions at Compensation Committee meetings.

Use of Independent Compensation Advisors. The Compensation Committee, 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 Compensation Committee 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 Compensation Committee. Cook & Co. has reviewed the compensation philosophy, objectives, strategy, benchmark analyses and recommendations regarding Officer compensation.

In 2013, as a matter of governance practice, the Compensation Committee conducted a review and completed interviews of independent compensation advisors to ensure the level of support, consultation and fees are appropriate and aligned with the Compensation Committee’s needs. Upon completing the interviews, the Committee retained the services of Cook & Co. based on their approach, expertise and fee structure.

Cook & Co. is engaged solely by the Compensation Committee 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 Compensation Committee 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

 

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these and other factors, the Compensation Committee 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 Chairman of the Compensation Committee.

Compensation Decision Process. When making compensation decisions for Officers, the Compensation Committee considers factors beyond market data and the advice of consultants. The Compensation Committee considers the individual’s performance, tenure and experience, the overall performance of the Company, any retention concerns, the individual’s historical compensation and the compensation of the individual’s peers within the Company and market. While the Compensation Committee 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 Compensation Committee. In making decisions for executives other than the Chief Executive Officer, the input and perspective of the Chief Executive Officer is considered by the Compensation Committee.

Compensation Components and Alignment to Compensation Philosophy

The components of our executive compensation program contain five main elements as shown in the previous chart. We explain the philosophy and key features of each below.

Determining the Proper Mix of Different Pay Elements. In determining how we allocate an Officer’s 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.

 

LOGO

Components of Compensation and Alignment to Goals. The Company recognizes that its stock price is heavily 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-based strategic stock units (based on operating earnings) and performance-leveraged stock units (based on share return measures) to align the interests of management with the long-term interests of stockholders. This balanced approach means that management needs to achieve specific performance goals to earn the common stock and restricted stock units 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 Company’s gold mining peers.

 

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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;

 

Targeted to the 50th percentile of the peer group to ensure the ability to compete in a difficult leadership talent environment;

 

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

  Annual Incentive Compensation Plan   Supports annual operating and financial performance, based on defined performance metrics.  

Annual cash award which ranges from 0-200% of target based on:

  Production;

 Total Costs;

  Safety;

  Project execution and cost, and;

 Reserve and resource additions

 

Personal Objectives

Bonus

  Rewards for 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 approved in advance by the Compensation Committee.

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.
  Strategic Stock Units   An incentive to deliver against the Company’s earnings targets and strategic growth plans for the purpose of providing a return to stockholders’ investment.   Awards are based on the achievement of the Company’s annual “EBITDA” target (earnings before interest, taxes, depreciation and amortization). The program contains a minimum performance threshold for payment and a cap for maximum payout.

Determination of 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:

 

 

Market information;

 

 

Individual performance;

 

 

Experience, skills and scope of responsibilities;

 

 

Company performance;

 

 

Succession planning; and

 

 

Value of the compensation relative to the corresponding objective.

 

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Other key measures which assist in providing a comprehensive understanding of pay include:

 

Analysis   Purpose

Pay Mix

  To ensure pay “at-risk” is consistent with philosophy and comparator group practices; a significant majority of pay should be “at-risk.”

Internal 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 Officers competitively relative to industry peers. As part of the Compensation Committee’s charter and to ensure the reasonableness and competitiveness of Newmont’s position in the industry, the Compensation Committee regularly evaluates Newmont’s 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 Compensation Committee’s analysis includes a review of information regarding each potential peer company’s 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.

2013 Peer Group. The peer group is structured to ensure it is a valid representation of Newmont’s business and operating environment. Given this, the peer group is weighted towards Newmont’s 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 Newmont’s project development group). The Compensation Committee regularly reviews the peer group with the assistance of the Committee’s consultant and management. During 2012, in preparation for reviewing 2013 target compensation, the Compensation Committee reviewed the peer group to ensure the reference companies continue to meet the established criteria for comparison. Based on the review, the Compensation Committee decided to reduce the peer group by one company, removing Chesapeake Energy, as its compensation structure was not a valid comparison for Newmont. This revised peer group was used as the reference point to determine the competitiveness of Newmont’s pay for 2013. Based on the criteria, the revised peer group for 2013 was as follows:

 

Alcoa Inc.

  Freeport-McMoran Copper and Gold Inc.

Anglo American

  Gold Fields Limited

AngloGold Ashanti Limited

  Goldcorp Inc.

Apache Corporation

  Kinross Gold Corporation

Barrick Gold Corporation

  Peabody Energy Corporation

Canadian Natural Resources Limited

  Rio Tinto plc.

EOG Resources, Inc.

  Talisman Energy Inc.

Fluor Corporation

  Teck Resources Limited

 

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Newmont’s ranking within the peer group is consistent with benchmarking standards and generally ranks at or near the median on key scope metrics:

 

LOGO

(1) 

Data based on the market statistics at the time of the Officer compensation review in 2012.

The peer group may differ from the peer groups used by proxy advisory services. The Committee believes Newmont’s peer group more appropriately represents the relevant industry and companies where Newmont competes for employees.

Positioning of Pay Relative to Peers for 2013. For 2013 compensation, the Compensation Committee determined that the appropriate target pay philosophy is a range centered on the 50th percentile, and that actual compensation may be above or below the 50th percentile depending on the Company’s performance and other factors described in this section.

Material Differences Among Officers. The targets for salary and incentive compensation vary among Newmont’s 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 Compensation Committee takes into consideration a variety of elements, such as the Officer’s skill set, individual achievements and role with Newmont during the relevant fiscal year. Additionally, an assessment of each Officer’s progress against his or her Personal Objectives (discussed later in this CD&A) is completed by the Compensation Committee based on input provided by the Chief Executive Officer. The Compensation Committee ultimately makes the compensation decisions for all of the Officers, including the Chief Executive Officer, based on the Compensation Committee 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 Compensation Committee 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.

2013 Compensation

While the amount of compensation may differ among our Officers, the compensation policies and factors affecting the amounts, as considered by the Compensation Committee, are generally the same for each of our Officers, including our Chief Executive Officer. In this section, we discuss the Compensation Committee’s considerations with respect to each element of compensation paid in 2013.

 

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Introduction: Executive Transitions During 2013. As noted in the executive summary, the Executive Leadership Team (the “ELT”) was restructured as the Company responded to changes in our business environment. A key element of this restructuring effort was our CEO succession process under the oversight of the Board of Directors. After successfully leading our operations as the Company’s President and Chief Operating Officer, the Board appointed Mr. Gary Goldberg to President and Chief Executive Officer in March of 2013, and Mr. Richard O’Brien, Former Chief Executive Officer, departed Newmont.

As Mr. Goldberg assumed the role of President and Chief Executive Officer, the Company refocused its efforts on cost, value, excellence in health & safety, sustainability & external relations.

Mr. Goldberg recruited seasoned leaders with industry and functional expertise. Following is a summary of Named Executive Officers who joined Newmont or transitioned roles in 2013:

 

 

Gary Goldberg, President and Chief Executive Officer, was promoted to this role effective March 1, 2013. Mr. Goldberg previously served as Newmont’s President and Chief Operating Officer; prior to joining Newmont, Mr. Goldberg served as the Chief Executive Officer of Rio Tinto Minerals.

 

   

Promotion compensation: Mr. Goldberg did not receive any supplemental awards for his promotion to Chief Executive Officer. Mr. Goldberg did receive an increase in salary, short-term incentives target and long-term incentive targets commensurate with the scope of the role as described later in this CD&A.

 

 

Laurie Brlas, Executive Vice President and Chief Financial Officer, was hired in September 2013. Ms. Brlas has extensive accounting and financial background as well as executive leadership experience in the mining industry. Ms. Brlas took over the duties of Chief Financial Officer from Mr. Thomas Mahoney, who served as Interim Chief Financial Officer following the departure of Mr. Russell Ball.

 

   

New hire compensation: In addition to the salary, short-term incentive and long-term incentive components described later in this section, Ms. Brlas received a sign-on bonus in the amount of $500,000 as an additional incentive to address potential competing opportunities. 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, for 2013, Ms. Brlas’ cash bonus is based upon annualized base salary, rather than base salary earned in 2013.

 

 

Dr. Elaine Dorward-King, Executive Vice President, Sustainability and External Relations, was hired in March 2013. Dr. Dorward-King is an accomplished leader in developing and implementing sustainable development, safety, health and environmental programs in the mining industry. She held senior leadership roles at major global mining companies prior to joining Newmont.

 

   

New hire compensation: In addition to the salary, short-term incentive and long-term incentive components described later in this section, Dr. Dorward-King received a sign-on award in the amount of $600,000 to address forfeited unvested long-term compensation from her former employer. Approximately half of this amount was delivered in restricted stock units that vest over three years; the remaining amount was provided in cash and 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. In addition, Dr. Dorward-King received $49,368, the amount of annual bonus that she would have otherwise received for 2012 from her former employer, and for 2013, Dr. Dorrward-King’s cash bonus is based upon annualized base salary, rather than base salary earned in 2013.

 

 

Chris Robison, Executive Vice President, Operations and Projects, was hired in May 2013. Mr. Robison has over 32 years of experience in mining, including gold and copper operations. Most recently, Mr. Robison served as Chief Operating Officer of Rio Tinto Minerals.

 

   

New hire compensation: In addition to the salary, short-term incentive and long-term incentive components described later in this section, Mr. Robison received a sign-on bonus in the amount of $500,000. The sign-on bonus requires repayment equal to 1/24th of the full amount for each month of a 24 month period after his hire date if he voluntarily departs Newmont during such period. Additionally, for 2013, Mr. Robison’s cash bonus is based upon annualized base salary, rather than base salary earned in 2013. Mr. Robison’s compensation is structured to address certain objectives for his role as described later in this CD&A. Mr. Robison joined Newmont after having retired from Rio Tinto; he joined Newmont with the intent to be employed at least two years to lead the operations role and effectively transition his responsibilities to his successor. Accordingly, Mr. Robison’s compensation terms are customized to this specific timeline and succession objective, specifically, Mr. Robison participates in the strategic stock unit program, with a

 

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customized two year period, and does not participate in the performance leveraged stock unit program which contains a three year performance period. The compensation terms for Mr. Robison will be reviewed in 2014 pending the assessment and determination of Mr. Robison’s service to the Company in and beyond 2015 in the role of Executive Vice President, Operations and Projects.

 

   

Consulting compensation prior to employment: Prior to joining Newmont, Mr. Robison provided consulting services to Newmont in the areas of labor negotiation strategy, safety effectiveness and operational efficiencies. The total amount of fees paid in 2013 to Mr. Robison for these services was $32,659.

 

 

Thomas Mahoney, Former Interim Chief Financial Officer, served as Interim Chief Financial Officer from May 2013 to September 2013. Mr. Mahoney has been Newmont’s Vice President and Treasurer since 2002 and continues in this role today. Mr. Mahoney assumed interim responsibility from Russell Ball, Former Executive Vice President and Chief Financial Officer, upon Mr. Ball’s departure from Newmont in May 2013.

 

   

Interim compensation: In addition to the salary, short-term incentive and long-term incentive components described later in this section, Mr. Mahoney received an interim assignment premium of $20,000 for each month served as the Interim Chief Financial Officer. Additionally, his short-term incentive target increased to 90% for this same period.

 

 

Mr. Randy Engel, Executive Vice President, Strategic Development, who has served in this capacity since 2009, remains in this role.

Former executives of Newmont discussed in this section include:

 

 

Richard O’Brien, Former Chief Executive Officer, departed Newmont in March of 2013.

 

   

Severance compensation: Mr. O’Brien 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 Strategic Stock Units. Please reference the “All Other Compensation” column of the Summary Compensation Table for payments made under the Executive Severance Plan of Newmont.

 

 

Russell Ball, Executive Vice President and Chief Financial Officer, departed Newmont in May of 2013.

 

   

Severance compensation: Mr. Ball 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 Strategic Stock Units. Please reference the “All Other Compensation” column of the Summary Compensation Table for payments made under the Executive Severance Plan of Newmont.

Base Salary. The Compensation Committee 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 Compensation Committee 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 Compensation Committee determines total compensation for our Officers.

Base salaries for 2013 were set as follows based on the criteria noted above.

 

Name1   2012 Base
Salary
    2013 Base
Salary
    Change  

Gary Goldberg2

    $800,000        $1,075,000        34.4

Laurie Brlas3

    —          $700,000        —     

Elaine Dorward-King3

    —          $450,000        —     

Randy Engel

    $575,000        $595,000        3.5

Chris Robison3

    —          $700,000        —     

Thomas Mahoney4

    $375,000        $386,250        3.0

 

(1) 

Messrs. O’Brien and Ball are not listed in the table as they separated employment with Newmont in 2013 and did not receive an increase in 2013. Actual base salary received in 2013 was prorated for the amount of time they served in their roles prior to departing from Newmont.

 

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(2) 

Mr. Goldberg was promoted to the role of President and Chief Executive Officer in March 2013. Upon his promotion to the role, Mr. Goldberg received a base salary adjustment to the amount noted above for 2013 to reflect the change in responsibilities from his prior role as President and Chief Operating Officer. Actual salary received was prorated for the time in each role in 2013.

 

(3) 

Ms. Brlas, Dr. Dorward-King and Mr. Robison were hired in 2013 and therefore do not have a 2012 salary comparison.

 

(4) 

Mr. Mahoney did not receive an additional salary increase while serving as Interim Chief Financial Officer; however, he did receive an interim assignment premium, discussed previously in this CD&A, to recognize his interim responsibilities.

Short-Term Non-Equity Incentive Compensation.

 

Short-Term Incentive Compensation Highlights:

 

   

Comprised of two components:

 

   

Corporate Performance Bonus (50% of the total short-term incentive opportunity); and

 

   

Personal Objectives Bonus (50% of the total short-term incentive opportunity).

Short-term cash incentives include a Corporate Performance Bonus and a Personal Objectives Bonus. Each is expressed as an equal percentage of base salary. The Corporate Performance Bonus and the Personal Objectives bonus have a target and a maximum level of 200% of target.

2013 SHORT-TERM INCENTIVE TARGETS

 

Name   Target Corporate Performance
Bonus as a Percentage of
Base Salary (A)
    Target Personal Objectives
Bonus as a Percentage of
Salary (B)
    Total as a Percentage of Base
Salary (A+B)
 

Gary Goldberg (1)

    73     73     146

Laurie Brlas

    50     50     100

Elaine Dorward-King

    42.5     42.5     85

Randy Engel

    45     45     90

Chris Robison

    62.5     62.5     125

Thomas Mahoney(2)

    35.3     35.3     70.6

Richard O’Brien(3)

    75     75     150

Russell Ball(3)

    45     45     90

 

(1) 

Mr. Goldberg’s bonus target for 2013 was prorated for the amount of time in each role at each respective bonus target as noted above in the section discussing “Base Salary.”

 

(2) 

Mr. Mahoney’s bonus target for 2013 was prorated for the amount of time in each role at each respective bonus target for his regular and interim roles in 2013.

 

(3) 

Messrs. O’Brien and Ball were eligible for prorated 2013 Corporate Performance Bonuses and Personal Objectives Bonuses at target performance per the terms of the Executive Severance Plan of Newmont.

Corporate Performance Bonus.

 

Corporate Performance Bonus Summary:

 

   

Performance measure revised in 2013 to improve alignment with annual financial and operational measures;

 

   

Payment based on overall corporate performance;

 

   

Payment ranges from 0-200% of target corporate performance;

 

   

Five of seven measures performed above target levels in 2013;

 

   

Below target or no payment for the two measures that were below target levels in 2013; and

 

   

Weighted performance resulted in an award of 143.4% of target payment for 2013.

 

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The Corporate Performance Bonus provides an annual reward based on seven measures1 designed to balance short-term and long-term factors, business performance and successful investment in and development of Company assets. The Compensation Committee reviews and approves the performance metrics and target levels of performance annually. The amounts of 2013 Corporate 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 Compensation Committee established for 2013 are listed below.

Revisions to the 2013 Corporate Performance Bonus. With the Company’s core themes of safety, profitability and growth, the 2013 Corporate Performance Bonus was revised for improved alignment to these areas as follows:

 

 

Safety was included as an objective measure in the 2013 program to further support the Company’s commitment to safety;

 

 

A new Total Cost measure, a more comprehensive measure of cost, replaced Cost Applicable to Sales with a higher weighting given Newmont’s focus on improving profitability; and

 

 

The Project Execution component was redesigned for simplicity and improved objective measurement of project results.

 

Corporate Performance Bonus Measure    What It Is    Why It Is Used

Safety

   Measures both leading and lagging indicators to ensure we continuously improve our safety results.      Safety is a core value and
Newmont’s highest priority.

Production

  

Measures the ounces of gold and

pounds of copper produced each year.

     Production of  gold and copper is the
basis of Newmont’s business;
production is the primary factor
within the Company’s control.

Total 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 writedowns.

 

The target includes assumptions for variables such as commodities prices, currency fluctuation, and deferral or acceleration of projects. At the end of the year, the actual impact of these variables is determined, and the target is adjusted up or down, accordingly.

     Cost is a key financial metric within
employees’ control and helps to
ensure efficiency and accountability.

 

  For 2013, cost is an important
operating metric due to changes in
gold price and the mining industry.

Project Execution

   Measures the progress of new key capital projects which are expected to add to Newmont’s 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 Newmont’s business over
the long-term as well as providing
the opportunity to grow production
capability.

Reserves and Resources

   Measures the reserves potentially available for future mining as well as the mineralization not yet proven to the level required for public disclosure.      The Reserves and Resources
metrics promote the discovery of
new deposits and the successful
completion of the work needed to
report new deposits.

 

(1) 

For Production, gold and copper are measured separately. In addition, Reserves and Resources are also measured separately, resulting in a total of 7 measures.

Calculation of Corporate Performance Bonuses. The 2013 targets were a mix of demanding financial, production, and growth targets derived from the annual business planning process. It is the Compensation Committee’s perspective that the target should be challenging, yet achievable, and the target is structured accordingly. The Company bonus plan for Officers has paid below target in five of the last ten years, which we consider as one measure of the level of difficulty of achieving a target award. Based on this experience, the level of difficulty in the targets is deemed to be validated as reasonably challenging.

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

 

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“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 200%. The slope of the bonus payout range increases upon reaching target performance in an effort to provide a stronger incentive and reward for outperforming the targets. Below target performance, upon reaching the threshold level, the incremental payout for each increment of performance remains moderate, ensuring an appropriate incentive and reward while not compensating beyond the reasonable amount for the given level of performance.

2013 CORPORATE PERFORMANCE BONUS METRICS AND CALCULATION

The structure of the Corporate Performance Bonus as well as the performance and bonus results for 2013 are provided in the table below:

 

Bonus Structure   Bonus Payment Range   2013 Results  
Performance
Metric
  Measure/
Unit
  Weighting   Minimum
(20%)
  Target
(100%)
  Maximum
(200%)
  2013
Performance
  Percentage
Performance
  Payout
Percentage(1)
 
Safety   Leading /
Lagging
  10%   Details provided below   Above
Target
  180%     18%   

Production

  Gold
(oz. 000)
  18%   4,590   5,000   5,170   5,080   147%     26.5%   
  Copper
(million lb.)
  2%   188   205   212   184   0%     0%   
Total Cost   Gold ($/
ounce)
  40%   $1,383   $1,269   $1,205   $1,150   200%     80%   
Project Execution   Milestone/
Cost
  10%   Details provided below   Above
Target
  118%     11.8%   

Reserves

  (oz. 000)   13%   2.00   6.10   7.50   Below
Threshold
  0%     0%   

Resources

  (oz. 000)   7%   3.00   7.50   20.00   8.30   107%     7.1%   

(1) Calculated by multiplying “Weighting” x “Performance Percentage”

               

Total Result =

                                143.4

Summary of the Safety metric for 2013: In 2013, we revised our Corporate Performance Bonus to include leading safety metrics which aim to identify and remediate potential safety risks before they result in safety incidents, and to establish visible safety leadership to further instill safe behavior across the Company. We also included a lagging safety metric to measure the results of our continuous improvement efforts and ensure our actions are improving safety performance. In 2013, our safety result was the highest in the Company’s history and among the highest in the ICMM. These results are provided in the following table.

 

Bonus Structure   Bonus Payment Range   2013 Results
Safety Metric &
Purpose
  Weighting   Minimum
(20%)
  Target
(100%)
  Maximum
(200%)
  2013
Performance
 

Performance

Percentage

 

Payout

Percentage (1)

Corrective Actions:

 

Identify potential risks and implement actions to remediate

  2%   Complete 91% of all actions   Complete
95% of all
actions
  Complete
100% of all
actions
  100%   200%   4%

Safety Interactions:

 

Implement additional leadership and engagement actions

  2%   Complete 82% of all interaction targets   Complete
90% of all
interaction
targets
  Complete
100% of all
interaction
targets
  114%   200%   4%

Formal Safety Audits:

 

Implement additional leadership and engagement actions

  2%   Complete 13 Safety Audits   Complete 15
Safety Audits
  Complete 16
Safety Audits
  15   100%   2%

TRAFR:

 

Reduce year-over-year Total Reportable Accident Frequency Rate

(% reduced)

  4%   2%   10%   20%   28%   200%   8%

(1) Calculated by multiplying “Weighting” x “Performance Percentage”

 

Total Result =

  10%                   180%   18.0%

 

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Summary of the Project Execution metric for 2013: In 2013, we also revised our project execution metric to ensure it is a more 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. The results and corresponding payment are audited by the Company’s Internal Audit department. For 2013, the total project performance yielded a score of 117.8% as noted in the table below.

 

Project Execution Elements   Factor
Weighting
    Performance
Percentage
 

Akyem

    40     144

Phoenix Copper Leach

    15     69

Conga

    20     200

Project Advancement

    25     40

Total Achievement =

    100     117.8

Corporate Performance Bonus Payments. To calculate the Corporate Performance Bonus percentage for each of the Officers, the respective target percentage of eligible earnings or base salary (in the case of Ms. Brlas, Dr. Dorward-King and Mr. Robison) was multiplied by 143.4%. This percentage is then multiplied by the employee’s eligible earnings (i.e., prorated salary), or annual base salary in the case of Ms. Brlas, Dr. Dorward-King and Mr. Robison, for the year to determine the actual value of the bonus. For Ms. Brlas, Dr. Dorward-King and Mr. Robison, the Company paid corporate performance bonus in 2013 based upon annual base salary, rather than pro-rated base salary earned for partial year employment. The amount of the corporate performance bonus based upon this differentiation from the plan is reflected in the Bonus column of the Summary Compensation Table, rather than the Non-Equity Incentive Plan column of the Summary Compensation Table.

 

Name(4)   2013
Eligible
Earnings
(A)
    Target
Payout
(%) (B)
    Company
Performance
% (C)
    2013
Payout
(A*B*C)
 

Gary Goldberg(1)

    $1,055,151        73.0     143.4     $1,104,242   

Laurie Brlas(2)

    $700,000        50.0     143.4     $501,900   

Elaine Dorward-King(2)

    $450,000        42.5     143.4     $274,253   

Randy Engel

    $613,434        45.0     143.4     $395,849   

Chris Robison(2)

    $700,000        62.5     143.4     $627,375   

Thomas Mahoney(3)

    $482,888        35.3     143.4     $244,733   

 

 

(1) 

Mr. Goldberg’s bonus target for 2013 was prorated for the amount of time in each role at each respective bonus target as noted above in the section discussing “Base Salary.”

 

(2) 

For 2013 only, based on the terms of their offer letters, as an additional hiring incentive and to compete with other potential offers, Ms. Brlas’ and Mr. Robison’s Corporate Performance Bonus is based on their annual salary rate rather than eligible earnings (i.e., prorated salary). This approach was also used for Dr. Dorward-King in recognition of forgone bonus opportunity from her former employer for the period of January 1, 2013 until her date of employment.

 

(3) 

Mr. Mahoney’s bonus target for 2013 was prorated for the amount of time in each role at each respective bonus target as noted above in the section discussing “Base Salary.” He also received an assignment premium during the period he served as Interim Chief Financial Officer which is included in his eligible earnings as a basis of payment for the Corporate Performance Bonus.

 

(4) 

Messrs. O’Brien and Ball received a pro-rated target Corporate Performance Bonus based on the Executive Severance Plan of Newmont.

 

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Personal Objectives Bonus.

 

Personal Objectives Bonus Highlights:

 

   

Individualized personal objectives established for each Officer by the Compensation Committee;

 

   

Objectives are pre-approved by the Compensation Committee 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 based on objective results and reasoned business judgment of the Compensation Committee.

Purpose of the Personal Objectives Bonus: The purpose of the Personal Objectives 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 Objectives 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 management’s 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 organization’s 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 individual’s contribution to the Company.

Determining the Personal Objectives Bonus: The Personal Objectives 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 Compensation Committee. The Compensation Committee can award payments out of a total bonus opportunity assigned to each Officer based upon such Officer’s overall performance against annual objectives. The Compensation Committee 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 Objectives 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 Objectives 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 Compensation Committee to evaluate each Officer’s performance and contributions to the Company’s success when making the bonus payout determinations.

While no single Personal Objective is either material to an understanding of the Company’s compensation policies relating to the Personal Objectives Bonus program or dispositive in the Compensation Committee’s decisions regarding the specific payout levels, in determining the awards for 2013, the Compensation Committee considered the accomplishments as described below for each Officer1.

 

(1)  Messrs. O’Brien and Ball received pro-rated Personal Objectives Bonuses according to the provision of the Executive Severance Plan of Newmont, as stated in the All Other Compensation column of the Summary Compensation Table.

 

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Personal Objectives for the Chief Executive Officer: Mr. Goldberg’s objectives and a summary of the results for those objectives are listed in the following table. For these achievements in his first year as Chief Executive Officer, Mr. Goldberg received an above-target Personal Objectives Bonus.

 

Objective    Summary of Results
Lead Newmont’s Safety Journey to improve safety performance and culture    Delivered a step-change in safety performance resulting in the most significant improvement in the Company’s history
Safely, responsibly and profitably produce Newmont’s gold targets within the cost ranges established   

Made significant progress in turning around the Company’s operating performance: led consolidated cost reductions of nearly $1 billion ($966 million) on a consolidated basis and delivered gold production at the high-end of guidance

 

Set the foundation for long-term success; implemented a reconfigured operating model for improved accountability for cost containment over the long-term

Regain a competitive advantage in value creation and capital deployment    Implemented new processes to evaluate investments and optimize Newmont’s asset portfolio to improve value, increase mine life, lower costs and manage risk
Achieve sustainable growth through projects, exploration and/or mergers and acquisitions    Completed key projects on-time and on-budget; divested non-core assets; enhanced value of project development and exploration pipeline through optimization program
Build the pipeline of leadership across all regions    Built a new leadership team, adding diverse talent and improving technical capability for the executive group
Progressing Newmont’s leadership position in social and environmental responsibility    Established a new leadership team for the Sustainability and External Relations function, positioning the Company to build upon the strong community relations and environmental capability in 2014

Personal Objectives results for the other Officers: Key accomplishments for each of the other Officers relative to their Personal Objectives are as follows:

 

 

Laurie Brlas: During Ms. Brlas’ first four months with the Company, she established relationships with financial institution partners; took primary responsibility for communicating the 2014 Business Plan with the investment community; and maintained Newmont’s investment grade rating. In addition, Ms. Brlas reduced costs and low-value work in the Finance function, initiated a redesign of the Company’s planning process; modified approaches to internal and external reporting; improved performance and bench strength for the function and supported due diligence efforts. Based on these accomplishments, Ms. Brlas received an above-target Personal Objectives bonus.

 

 

Elaine Dorward-King: In her first year with the organization, Dr. Dorward-King has introduced a revised Sustainability and External Relations (S&ER) strategy, revised water strategy and country strategies for Suriname and Ghana. Contributions also included a revised process for evaluating S&ER risk in investment decisions and enterprise risk management evaluations; realignment of the function to introduce new capabilities while decreasing costs; and serving as influential safety advocate across the organization. These accomplishments have resulted in an above-target Personal Objectives Bonus.

 

 

Randy Engel: Mr. Engel significantly enhanced the strategy and 2014 Business Plan in response to changing market conditions, ensuring the greatest optionality for Newmont and preserving free cash flow. Throughout 2013, Mr. Engel expanded the Company’s acquisition target field and pursued investment and divestment opportunities to optimize the Company’s portfolio including the successful divestment of approximately $600 million in non-core assets. Within his own function, Mr. Engel reduced costs, effectively transitioned work to the Chief Financial Officer function and built new strategic planning capabilities. The positive outcomes achieved through divestiture and due diligence, along with his other accomplishments serve as the basis for Mr. Engel’s above-target Personal Objective bonus.

 

 

Chris Robison: In his first year, Mr. Robison delivered strong results across operations including significant improvements in productivity at Tanami and Waihi; overseeing the delivery of Akyem and Phoenix Copper Leach on time and on budget; reducing operating costs globally by 4% and achieved Newmont’s lowest level of safety incidents. Targeted gold production was achieved, however, copper production fell short of anticipated levels. Mr. Robison implemented a new operating model across Operations and Projects and took deliberate steps to increase the bench strength of the organization. These accomplishments have resulted in an above-target Personal Objectives Bonus.

 

 

Thomas Mahoney: In 2013 Mr. Mahoney served in multiple capacities including VP & Treasurer, as well as interim Chief Financial Officer for six months. Mr. Mahoney’s accomplishments include negotiating a 3-year,

 

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$175-million bilateral line of credit with BNP which provided additional capacity and also increased corporate revolver availability; improving the cost structure of existing line of credit by shifting financiers and efficiently closing out hedge positions in alignment with the 2014 Business Plan and strategy. Additionally, under Mr. Mahoney’s leadership the Company executed successfully on a SAP stabilization project that moved the organization toward realizing the full capabilities of the system and investment and a revised operating model was implemented for the CFO function that reduced costs and increased efficiencies. Mr. Mahoney’s strong performance has resulted in an above-target Personal Objectives Bonus.

The Compensation Committee considered each Officer’s performance and key accomplishments listed above in determining his or her bonus amounts. The Compensation Committee considered Mr. Goldberg’s recommendations, each Officer’s performance and key accomplishments in determining each Officer’s Personal Objectives Bonus amounts. In alignment with Mr. Goldberg’s recommendations, the Committee adopted and approved the following amounts:

 

Name  

2013 Eligible
Earnings

(A)

    Target (%)
(B)
    Personal
Objectives
Performance
(C)
    Payout
(A*C)
 

Gary Goldberg(1)

    $1,055,151        73.0     125     $962,554   

Laurie Brlas(2)

    $700,000        50.0     125     $437,500   

Elaine Dorward-King(2)

    $450,000        42.5     125     $239,063   

Randy Engel

    $613,434        45.0     140     $386,464   

Chris Robison(2)

    $700,000        62.5     135     $590,625   

Thomas Mahoney(3)

    $482,888        35.3     125     $213,331   

 

(1) 

Mr. Goldberg’s bonus target for 2013 was prorated for the amount of time in each role at each respective bonus target as noted above in the section discussing “Base Salary.”

 

(2) 

For 2013 only, based on the terms of their offer letters, as an additional hiring incentive and to compete with other potential offers, Ms. Brlas’ and Mr. Robison’s Personal Objectives Bonus is based on their annual salary rate rather than eligible earnings (i.e., prorated salary). This approach was also used for Dr. Dorward-King in recognition of forgone bonus opportunity from her former employer for the period of January 1, 2013 until her date of employment.

 

(3) 

Mr. Mahoney’s bonus target for 2013 was prorated for the amount of time in each role at each respective bonus target as noted above in the section discussing “Base Salary.” He also received an assignment premium during the period he served as Interim Chief Financial Officer which is included in his eligible earnings as a basis of payment for the Personal Objectives Bonus.

For the year, combining the Corporate Performance Bonus and the Personal Objectives Bonus, each representing 50% of the target annual incentive program, the total annual bonus for the year as a percent of target is displayed in the table below:

 

Name   2013 Total Actual
Bonus
    2013 Total Target
Bonus1
    Total Bonus as a
% of Target
 

Gary Goldberg(2)

    $2,066,797        $1,540,087        134

Laurie Brlas(3)

    $939,400        $700,000        134

Elaine Dorward-King(3)

    $513,315        $382,500        134

Randy Engel

    $782,313        $552,091        142

Chris Robison(3)

    $1,218,000        $875,000        139

Thomas Mahoney(4)

    $458,064        $341,329        134

 

(1) 

Target Corporate Performance Bonus + Personal Objectives Bonus.

 

(2) 

Mr. Goldberg’s bonus target for 2013 was prorated for the amount of time in each role at each respective bonus target as noted above in the section discussing “Base Salary.”

 

(3) 

For 2013 only, based on the terms of their offer letters, as an additional hiring incentive and to compete with other potential offers, Ms. Brlas’ and Mr. Robison’s bonus is based on their annual salary rate rather than eligible earnings (i.e., prorated salary). This approach was also used for Dr. Dorward-King in recognition of forgone bonus opportunity from her former employer for the period of January 1, 2013 until her date of employment.

 

(4) 

Mr. Mahoney’s bonus target for 2013 was prorated for the amount of time in each role at each respective bonus target as noted above in the section discussing “Base Salary.” He also received an assignment premium during the period he served as Interim Chief Financial Officer which is included in his eligible earnings as a basis of payment for his bonus.

 

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Long-Term Equity Incentive Compensation.

 

Long-Term Equity Incentive Compensation Highlights:

 

   

100% performance-based — all grants are subject to financial operating targets or market-based performance metrics to align with stockholder interests and highly correlate with results-based pay-for-performance

 

   

Includes two performance-based programs:

 

   

Strategic Stock Units — performance against earnings targets (EBITDA); and

 

   

Performance Leveraged Stock Units — stock price performance and company TSR performance relative to peers.

Overview of the Long-Term Equity Incentive Compensation Programs for 2013. The Compensation Committee 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 Company made significant revisions to the long-term incentive (“LTI”) programs in 2012 to further align executive pay with Company performance, reduce complexity and promote good corporate governance. The LTI programs were reviewed again in 2013, which included an independent assessment of the pay and performance alignment. It was determined that the programs are operating as intended with pay appropriately correlated to financial and market performance.

The LTI programs for 2013 included:

 

 

Strategic Stock Unit (SSU) Awards. SSU awards represent one-third of the Officer’s target LTI value and are earned based on Newmont’s Earnings Before Interest, Tax, Depreciation and Amortization, (“EBITDA”) as defined below, a key financial earnings measure that reflects the Company’s annual earnings performance. This program requires threshold achievement for any funding for the program. The Company has selected EBITDA as it believes this is a key financial measure that aligns with operational components under management’s control. Additionally, it is deemed to support the Company’s long-term sustainability and growth by ultimately strengthening the balance sheet (cash position) to fund operations, projects and dividends, if declared, which aim to drive long-term stockholder returns.

 

 

Performance Leveraged Stock Unit (PSU) Awards. PSU awards represent two-thirds of the Officer’s target LTI value. This program is aligned with stockholder interests given the program is based on stock price improvement and relative Total Shareholder Return (TSR). Beginning with awards in 2012, there is no minimum award provision or retention floor.

Equity Award Target Values. The Compensation Committee 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:

2013 TARGET LONG-TERM EQUITY INCENTIVES

 

Name   % of Base Salary1  

Gary Goldberg

    500

Laurie Brlas

    375

Elaine Dorward-King

    270

Randy Engel

    300

Chris Robison

    350

Thomas Mahoney

    120

Richard O’Brien2

    —     

Russell Ball2

    —     

 

(1) 

LTI target is based on the employee’s salary as of March 1, 2013, or their date of hire if hired at a later date during the year.

 

(2) 

Due to his departure in March, Mr. O’Brien did not receive any 2013 LTI targets. Mr. Ball departed in May 2013, and while he received target awards in 2013, all awards were cancelled according to the terms of the Senior Executive Compensation Program. See the Summary Compensation Table for the targets set for Mr. Ball, which were subsequently cancelled, delivering no value to Mr. Ball.

 

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Determination of Awards. The Compensation Committee grants equity awards, and recommends equity awards for the CEO to the full Board to approve. In addition to the targets discussed above, the Compensation Committee 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 “Newmont’s Policy with Respect to the Granting of Equity Compensation” as described below). The Compensation Committee 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 designated grant date high and low) 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.

Criteria Considered in Determining the Amount of Equity-Based Compensation Awards. The Compensation Committee 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 Compensation Committee has managed stockholder dilution well within the norms of our peers and stated guidelines from proxy advisory services and institutional investors. For 2013, Newmont’s gross burn rate (annual use of shares as a percentage of shares outstanding) was approximately 0.26%, well below the median of our peer group.

Equity Awards Granted in 2013. The Compensation Committee regularly reviews the Company’s executive pay positioning with the assistance of its independent consultant, Cook & Co., and management. Based on the review, long-term incentive targets were not adjusted for 2013. Awards granted in 2013 were determined in accordance with the terms of each long-term incentive plan as approved by the Compensation Committee, with the exception of the new hire awards for Ms. Brlas, sign-on restricted stock unit award for Dr. Dorward-King, and the shortened vesting period for Mr. Robison’s strategic stock unit award.

Newmont’s Policy with Respect to the Granting of Equity Compensation. The Board has delegated to the Compensation Committee the authority to grant equity to employees below the CEO level; Board of Directors’ approval is required for CEO grants.

Strategic Stock Units.

 

Strategic Stock Unit Highlights:

 

   

Performance-based program;

 

   

Performance is measured against the annual EBITDA target set by the Committee with a performance plus vesting period of 3 years;

 

   

Program contains a minimum threshold for payout, below which no payment is awarded and contains a cap of 150% of target to ensure pay is appropriate and mitigates incenting excessive risk taking;

 

   

Pay is aligned with stockholders as SSUs are eventually settled in stock, so pay is “at-risk” to changes in share price over the performance and vesting period;

 

   

Represents one-third of an Officer’s target LTI program; and

 

   

EBITDA performance for 2013 was 98.5% of target, resulting in an SSU award of 97% of target; however, due to the change in stock price over the performance period, the average realizable award value as of December 31, 2013 was below target at an average of 60% of target.

Performance Structure of SSUs. Strategic Stock Units (“SSUs”) are a performance-based equity incentive designed to align Officer compensation with the financial performance of the Company by linking pay with performance against the Company’s EBITDA target. EBITDA is measured on a one year basis largely due to the volatility in gold price which makes it difficult to predict long-term earnings without allowing for significant assumptions and adjustments in the incentive program. The one year EBITDA performance period is also used to ensure a higher level of “line of sight” and accountability for senior management. To further ensure results are aligned with long-term performance, share targets are set at the beginning of the performance period and are also subject to share price performance over the three year prorata vesting period.

Determining SSU Awards. The calculation of the SSU awards is determined by the Target Strategic Stock Unit Award and the Performance Multiplier based on EBITDA performance.

SSU Award = Target Strategic Stock Unit Award x EBITDA performance multiplier

 

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Target Stock Award. The target strategic stock unit award for each Officer is calculated by multiplying the Officer’s base salary by their target SSU award percentage. This value is then divided by the average of the high and low share price on the date of award to determine the target number of shares or units for each Officer. The target grant is set in number of shares, versus dollars, so that the actual payout/grant is “at-risk” to changes in share price over the performance period.

 

 

Performance Multiplier. The payment for SSUs can range from 0% to a cap of 150% of target based on the performance against the EBITDA plan target. Performance below threshold results in no award of SSUs. From threshold to target performance, each percentage increase in EBITDA performance corresponds to a two percent increase in the SSU award. To reward exceptional performance, for EBITDA performance above target up to the performance award cap, for each percentage increase in EBITDA performance, the SSU award is increased by four percent. Officers can earn up to 150% of target for exceptional performance. 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:

 

LOGO

PERFORMANCE METRIC DEFINITION

For the purposes of the SSU program, EBITDA is defined as:

 

Attributable Gold and Copper revenue

- Cost Applicable to Sales

= Margin

- Exploration Expense

- Advanced Projects and R&D

- G&A

- Other Expense

+ Other Income

= EBITDA1

 

(1) 

Under the program, EBITDA may be adjusted for one-time accounting items such as asset sales and impairments. For 2013, the Company incurred impairments related to the decline in gold price, recoveries and other costs. It was deemed that impairments related to other costs and recoveries should be included in the calculation (reducing the total award). However, as gold price is not within management’s control, impairments related to gold price were not included in the calculation consistent with treatment in other programs.

Determining SSU EBITDA Target. The target for the award is derived from the Company’s financial plan as approved by the Board of Directors prior to the beginning of the performance year. To understand the difficulty of achieving target performance, in 2012 the Compensation Committee reviewed a five year historical analysis against Company targets which indicated performance results of approximately ninety to ninety-nine percent achievement for the period analyzed. The actual 2012 SSU performance was 101.5%. Based on this collective information, the Compensation Committee and management deem the target setting approach to be valid and sufficiently challenging. The performance range for 2013 was set as shown in the chart above to require a minimum acceptable level of performance prior to the funding of the program and capped at an achievable level, with an intent to avoid excessive risk taking.

 

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SSU results for 2013. The Company experienced solid earnings performance in 2013. The EBITDA performance was 98.5% of target resulting in a 97% SSU award. The chart below shows the results for the SSU award for 2013.

 

2013 EBITDA Plan
Target1

(A)

  2013 EBITDA
Performance1
(B)
  Percent of Target
Achievement
(C) = (B/A)
  Percent Above
(Below) Target
(D) = (C)—100%
  SSU Performance
Multiplier2
(E)
  SSU Payout
Percentage
(F) = 100%+(D*E)

$2,143

  $2,110   98.5%   -1.5%   2   97%

 

(1) 

In millions; adjusted for various factors including gold and copper prices.

 

(2) 

For performance from threshold up to and including target, the multiplier is 2. For performance from target to the cap, the multiplier is 4.

2013 STRATEGIC STOCK UNIT AWARDS

The Company granted Strategic Stock Unit Awards for 2013 performance in the following amounts:

 

Name(5)   2013 Base
Salary (A)
    Target %
(B)
    Target
Award
Amount
(C = AxB)
    Award Date
FMV of
NEM stock
(D)
    Target Shares
Award
(E = C/D)
   

2013

EBITDA
Performance
Modifier (F)

    Payout –
# of
Shares*
(G = ExF)
    Value as
percent of
target as of
12/31/13 (4)
 

Gary Goldberg(1)

    $1,075,000        166.7     $1,792,025        $40.915        43,798        97.0     42,484        54.6

Laurie Brlas(2)

    $700,000        125     $875,000        $30.410        28,773        97.0     27,910        73.5

Elaine Dorward-King(1)

    $450,000        90     $405,000        $40.915        9,898        97.0     9,601        54.6

Randy Engel(1)

    $595,000        100     $595,000        $40.915        14,542        97.0     14,106        54.6

Chris Robison(3)

    $700,000        175     $1,225,000        $33.065        37,048        97.0     35,937        67.6

Thomas Mahoney(1)

    $386,250        60     $231,750        $40.915        5,664        97.0     5,494        54.6

 

(1) 

Messrs. Goldberg, Engel and Mahoney and Dr. Dorward-King were awarded SSUs for 2013 performance based on the FMV on 02/27/13 of $40.915.

 

(2) 

Ms. Brlas’ SSUs were awarded on September 9, 2013 based on Newmont’s average fair value of $30.41 on that date.

 

(3) 

Per Mr. Robison’s offer terms, his 2013 SSU target is 350% of base salary and was awarded on May 3, 2013 based on Newmont’s average fair value of $33.065 on that date. His award vests 50% in 2014 and 50% in 2015. He was not eligible for other LTI awards, including PSUs in 2013 and is not eligible for additional LTI awards in 2014. Mr. Robison joined Newmont after having retired from Rio Tinto; he joined Newmont with the intent to be employed at least two years to lead the operations role and effectively transition his responsibilities to his successor. Accordingly, Mr. Robison’s compensation terms are customized to this specific timeline and succession objective. The compensation terms for Mr. Robison will be reviewed in 2014 pending the assessment and determination of Mr. Robison’s service to the Company in and beyond 2015 in the role of Executive Vice President, Operations and Projects.

 

(4) 

Based on Newmont’s closing price on December 31, 2013 of $23.03.

 

(5) 

Note: Due to Mr. O’Brien’s and Mr. Ball’s departure from the Company, they did not receive SSU awards in 2014 for 2013 performance.

One third of the Strategic Stock Unit award was paid after the performance period in common shares on the date of grant (February 26, 2014) and two-thirds of the Strategic Stock Unit award will be paid in restricted stock units that vest in equal annual increments on the second and third anniversaries from the date of grant (February 26, 2015, and 2016), except for Ms. Brlas and Mr. Robison whose vesting is as follows:

 

 

Based on Ms. Brlas hire date, she will receive one-third of the SSU award on September 9, 2014 and one-third on the second and third anniversaries from this date.

 

 

Per the terms of Mr. Robison’s offer and as described in the footnotes above, Mr. Robison will receive one-half of the SSU award on February 26, 2014 and one-half on February 26, 2015.

The Company accrues cash dividend equivalents on restricted stock units and pays them after vesting when common stock is issued.

 

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2011-2013 Performance Leveraged Stock Units (PSUs).

 

PSU Compensation Highlights:

 

   

Long-term pay-for-performance vehicle based on:

 

   

Newmont’s share price performance versus peers;

 

   

Absolute share price growth over the performance period; and

 

   

Performance Period is three years.

 

   

2011-2013 PSU Performance:

 

   

TSR performance was near the top quartile of the gold peer group at the 73rd percentile;

 

   

However, correlated to the drop in gold price and industry market cap decline, Newmont’s stock price declined 58% over the same period;

 

   

Resulting in a PSU performance of 96% of target; with the change in stock price over the performance period, the average award value was 36% below target.

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 Newmont’s stock price (the “Market Payout Factor”) and the relative performance of Newmont’s 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 Officer’s 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”).

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. The ratio of the two determines the MPF.

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.

 

LOGO

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.

 

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The payment for the TPF can range from 0 to 50% of target based on Newmont’s relative share price performance. Newmont’s 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 Newmont’s 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).

 

LOGO

In sum, the maximum PSU payout of 200% of the target PSUs would be awarded if the Company’s stock price at the end of the performance period equals 150% of the baseline and if the Company’s TSR reaches the 75th percentile of the peer group. If the Company’s 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 Compensation Committee:

 

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.  

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 Compensation Committee determined that a relative TSR peer group should focus on companies with gold operations, as those are the Company’s 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 Compensation Committee determined that the total compensation peer group is superior to the TSR peer group for evaluating total compensation, because the companies in the total compensation peer group are the Company’s competitors for employees and their business operations are of a relatively comparable size to Newmont.

 

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PSU results for 2011-2013. 2013 continued to be a challenging period for natural resource and mining companies as discussed in the executive summary. Newmont was not immune to the pressure in the industry. However, Newmont’s stock price sustained the period more favorably than many of its peers. Newmont’s relative TSR versus peers (“TPF”) ended the period near the top quartile of the peer group at the 73rd percentile resulting in a TSR payout factor of 46%. Stock price decline over the performance period was 58% (“MPF”), however, for the 2011 plan, the MPF had a payout floor of 50% which resulted in an overall PSU performance for 2013 of 96%. Beginning with PSU awards in 2012, the MPF floor has been removed. Adjusting for the stock price decline over the period, the award value as of December 31, 2013 as a percent of target was 36%. The chart below shows the payments for each Officer, based on the results of the PSU award for 2013.

 

Name1,2   2011
Base Salary
(A)
    Target %
(B)
    Award
Amount
(C)=(AxB)
    Average Closing
Price Q4 2010
(D)
    Target Shares
Award
(E=C/D)
    2011-2013
Price
Appreciation
(F)
    2011-2013
Relative
TSR
Ranking
(G)
    2011-2013
Overall
PSU
Result
    PSU Award
(Rounded
Down)
Ex(F+(G-
50)x2)
    Value as
percent
of target
as of
12/31/133
 

Randy Engel

    $575,000        100     $575,000        $60.97        9,430        50     73     96     9,052        36

Richard O’Brien4

    $1,150,000        167     $1,916,705        $60.97        22,708        50     73     96     21,799        36

Russell Ball4

    $620,000        100     $620,000        $60.97        7,920        50     73     96     7,603        36

 

(1) 

Mr. Goldberg, Ms. Brlas, Dr. Dorward-King and Mr. Robison were not employed with Newmont on the date of the PSU awards in 2011, and therefore, did not receive a grant for this performance period.

 

(2) 

Mr. Mahoney is not eligible for the PSU program. However, he received a restricted stock unit (RSU) grant in 2013 based on his performance against his personal objectives, which is reflected in the Grants of Plan Based Awards table.

 

(3) 

The closing price of the Company’s stock on 12/31/13 was $23.03.

 

(4) 

Mr. O’Brien and Mr. Ball were eligible for a pro-rated PSU payment. Under the separation terms of the PSU section of the Senior Executive Compensation Program, for those who have separated employment after the first year of the measurement period, the award is prorated and paid out at the lesser of actual or target performance. In this case, the award is paid at the lower actual performance amount.

Realizable” Compensation for 2013.

To assist stockholders with understanding regular compensation (salary, short-term incentives and long-term incentives, excluding sign-on compensation) for Newmont’s Officers as of December 31, 2013, the following table summarizes actual salary paid, actual short-term incentives (Corporate Performance Bonus and Personal Objectives Bonus) paid for 2013 performance, and long-term incentives (SSUs and PSUs) awarded (targets set) in 2013 with the value based on Newmont’s closing stock price on December 31, 2013. 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 61.

 

            Short-Term Incentives2     Long-Term
Incentives3
          

Incentive-based
Comp as a % of
Target

 
Name   Actual
Salary Paid1
    Total
Actual
Bonus $
    Total
Actual
Cash $
   

Value of

LTI

    2013 “Realizable”
Compensation
   

Gary Goldberg

    $1,055,151        $2,066,797        $3,121,948        $2,655,543        $5,777,491        69

Laurie Brlas

    $201,923        $939,400        $1,141,323        $1,975,513        $3,116,837        88

Elaine Dorward-King

    $346,154        $513,315        $859,469        $600,254        $1,459,723        70

Randy Engel

    $613,434        $782,313        $1,395,747        $881,865        $2,277,612        72

Chris Robison

    $453,846        $1,218,000        $1,671,846        $827,629        $2,499,475        99

Thomas Mahoney

    $482,888        $458,064        $940,952        $256,969        $1,197,921        85

 

(1) 

Salary paid in 2013.

 

(2) 

Short-term incentive columns reflect the amounts paid in 2013 under the Corporate Performance Bonus and the Personal Objectives Bonus as stated in the section “Short-Term Incentives” earlier in this CD&A. Excludes sign-on compensation.

 

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(3) 

Long-term incentives reflect:

 

   

PSU awards made in 2013 for the performance period 2013-2015, payable in 2016. The value reflects target shares times Newmont’s stock price on 12/31/13 of $23.03 resulting in a current award value of approximately 47% of target (stock price basis for determining the 2013 award was $49.20). Based on her hire date, the stock price basis for Ms. Brlas’ PSU award was $30.24 resulting in a current award value of approximately 76%. As stated previously, Mr. Robison was not eligible for a PSU award in 2013 in accordance with his offer terms.

 

   

SSU awards made in 2013 under the Strategic 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 SSU award under the program of 97% times Newmont’s stock price on 12/31/13 of $23.03 resulting in a current average award value of approximately 60% of target. As previously noted, the stock price basis for Ms. Brlas’ and Mr. Robison’s SSU awards were $30.41 and $33.065 resulting in a current award value of approximately 74% and 68%, respectively.

 

   

RSU award made in 2013 to Mr. Mahoney as he is not eligible for the PSU program. The value reflects shares granted times Newmont’s stock price on 12/31/13 of $23.03 resulting in a current award value of approximately 56% of grant date value (stock price basis for determining the 2013 award was $49.20).

Post-Employment Compensation

In order to alleviate concerns that may arise in the event of an employee’s separation from service with the Company and enable employees to focus on Company duties while employed by us, the Company has post-employment compensation plans and policies in place that include Company funded benefits as well as employee contribution-based benefits. Our post-employment compensation plans and policies provide for a broad range of post-employment benefits to our employees, including Officers, and create strong incentives for employees to remain with the Company. The Company’s 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 highly-compensated employees who are subject to the Internal Revenue Code limitations in the qualified plans. The two equalization plans are in place to give highly-compensated 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, usually every three years, the Company reviews its retirement benefits. The purpose of the review is to assess the level of replacement income that the Company’s retirement plans provide for a full career Newmont employee. The Company attempts to maintain a competitive suite of retirement benefits that accomplishes 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 2013 Pension Benefits Table and 2013 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 executive’s ability to efficiently perform his or her duties or may result in a termination of an executive’s 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 removes the excise tax gross up provided in the prior plan. The new 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, as required per the terms of the plan. The levels of benefits provided in the 2008 and 2012 Executive the Change of Control Plans are intended to motivate and retain key executives during an actual or threatened change of control.

 

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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 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.

The 2013 Stock Incentive Plan approved by stockholders in 2013 incorporates a double-trigger upon change of control for any equity vesting.

Plans and policies related to change of control effective 2012.

 

 

Treatment of equity in the event of a change of control for all awards beginning in 2012: For all awards granted in 2012 and thereafter, in the event of a change of control, accelerated vesting of equity compensation will only occur upon employee termination (“double-trigger”).

 

 

2012 Executive Change of Control Plan (the “2012 ECOC Plan”): The Company adopted a revised change of control plan for any newly hired eligible employee or any employee promoted into an eligible position on or after January 1, 2012. The prior plan remains in place for employees who were eligible on, or prior to, December 31, 2011. The 2012 ECOC Plan contains the following material changes from the prior 2008 Executive Change of Control Plan believed to be consistent with modern severance practices:

 

   

Removal of the excise tax gross up;

 

   

Reduction in the formula used for calculating severance;

 

   

Removal of retirement plan contributions; and

 

   

Reduction of the time period for continuation of health benefits.

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 (versus full vesting in some cases of previous awards). 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.

Officer’s Death Benefit. The Company maintains group life insurance for the benefit of all salaried employees of the Company. In addition, for highly-compensated executives, including the Officers, the Company provides 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 Company’s 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, pursuant to the terms of such plan, even if the Company alters the terms of such plan.

 

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Other Policies and Considerations

Results of the 2013 Advisory Vote on Executive Compensation (“Say on Pay”)

In 2013, Newmont conducted an advisory vote on the 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 Compensation Committee in ensuring alignment of the Company’s executive compensation programs with stockholder interests.

The result of our 2013 Say on Pay vote indicates substantial support for the executive compensation of our Officers with 97% (excluding abstentions) of the votes cast “For” the advisory vote on executive compensation. The Compensation Committee reviewed this result, and concluded that this result affirms our stockholders’ support of the Company’s approach to executive compensation. However, consistent with the Company’s ongoing commitment to best practices in compensation governance and strong emphasis on pay for performance, the Compensation Committee took certain actions in 2013 to further align executive pay with stockholder interests, as described in this CD&A. Although the Compensation Committee did not make any changes to our executive compensation program and policies specifically as a result of the 2013 Say on Pay advisory vote, the Compensation Committee’s decisions were informed in part by the broader discussions and best practices resulting from the 2013 Say on Pay process. The Compensation Committee will continue working to ensure that the design of the Company’s 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 Compensation Committee 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 Newmont’s 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 2014, the Company’s Enterprise Risk Management (“ERM”) team conducted a risk assessment of the executive compensation program. The ERM team reviewed the executive compensation program changes since the last comprehensive assessment in 2009 and did not uncover risk factors that are reasonably likely to have a material adverse effect on the Company. Based on changes to the executive compensation programs from 2010 through 2013, it was determined that these changes further reduced incentive for excessive risk taking. The changes include the discontinued use of stock options, discontinued use of Financial Performance Shares (which was deemed duplicative to the Corporate Performance Bonus), addition of the SSU program and revisions to the Corporate Performance Bonus which result in a more objective metric structure for the Project Execution component. However, one change, the removal of the guaranteed floor for payout for the PSU program (originally 50%), was deemed to minimally increase the incentive for risk taking, but we believe this risk to be rare and this design ultimately provides improved pay-for-performance alignment for our compensation program.

In addition to the Company’s risk assessment process, the incentive program results are reviewed by the Company’s 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.

Accelerated Vesting of Stock Awards

Change of Control. A change of control will have certain immediate effects on stock awards granted prior to 2012 to Officers. 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

 

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SSUs: All restrictions to outstanding granted SSU awards shall vest upon a double trigger of change of control and termination of employment.

Treatment of equity in the event of a change of control: For all awards granted in 2012 and thereafter, in the event of a change of control, accelerated vesting of equity compensation (primarily unvested restricted stock units and stock options) will only occur upon employee termination.

Death/Long-Term Disability/Retirement/Severance

 

 

PSUs: In the event of death or disability during the performance period, payout is pro-rated at target and common stock is issued as soon as practicable. In the event of severance during the first year of the performance period, all PSUs are forfeited. In the event of severance after the first year of the performance period, payout is pro-rated at the lesser of target or actual performance and paid at the end of the performance period. In the event of retirement under the Pension Plan (entitling the executive to immediate pension benefits), the Company will issue a pro-rata award at the end of the performance period based upon actual performance.

 

 

SSUs: In the event of death or disability during the performance period, payout is pro-rated at target and common stock is issued as soon as practicable. In the event of severance, all SSUs are forfeited for the performance period at the time of separation with severance. For SSUs that have been earned but are not yet vested at the time of separation with severance, such SSU grants shall vest in a pro-rata amount based upon the period elapsed in the vesting period. In the event of retirement under the Pension Plan (entitling the executive to immediate pension benefits), the Company will issue a pro-rata SSU award for the portion of the year of separation and provide pro-rata vesting of unvested outstanding awards based upon the period elapsed in the vesting period.

Granting Stock Options. In 2012, the Company altered its long-term equity compensation program to exclude stock option awards, and for the covered period of this CD&A, no stock options were awarded. However, historical stock option awards have been subject to the following policies and procedures. The Company:

 

 

does not have a program, plan or practice to time stock option grants to its executives in coordination with the release of material nonpublic information;

 

 

does not set the date of its stock option grants to newly-hired executives in coordination with the release of material nonpublic information;

 

 

does not plan to time, nor has it timed, the release of material nonpublic information for the purpose of affecting the value of executive compensation; and

 

 

does not have a program, plan or practice related to setting stock option prices based on the value of the Company’s stock on a date other than the stock option’s actual grant date.

Stock Ownership Guidelines. The Company’s stock ownership guidelines require that all Officers own shares of the Company’s 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   

Laurie Brlas

    3   

Elaine Dorward-King

    3   

Randy Engel

    3   

Chris Robison

    3   

Note: Mr. Mahoney is not subject to the stock ownership guidelines in his role as Vice President and Treasurer.

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 Compensation Committee sets the ownership guidelines by considering the size of stock awards. Unvested shares of restricted stock, restricted stock units and shares held in retirement accounts are considered owned for purposes of the

 

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guidelines. The Compensation Committee 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 policy for its employees, including the Officers. The policy prohibits certain employees from trading during specific periods at the end of each quarter until after the Company’s public disclosure of financial and operating results for that quarter, unless they have received the approval of the Company’s 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.

Perquisites. The Company’s philosophy is to provide minimal perquisites to its executives. The Company did not provide perquisites in an aggregate amount of $10,000 or more to any Officer in 2013.

In 2013, the Compensation Committee 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. The benefit value ranges from $12,000 to $15,000 depending on employee level. The amount 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 Company’s 401(k) administrator.

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 2013, Corporate Performance Bonuses, Personal Objectives Bonuses, Performance Leveraged Stock Units and Strategic Stock Units do not meet the performance-based exception under Section 162(m) are therefore subject to the $1,000,000 deduction limit. Thus, in 2013, 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 2013, Messrs. Goldberg, Engel, Robison and Dr. Dorward-King 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 beginning in 2014 and beyond. Accordingly, where appropriate, we may in the future attempt to structure compensation in a manner such that it meets the performance-based exception requirements under Section 162(m), although we have made no commitment to do so.

 

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Executive Compensation Tables

2013 SUMMARY COMPENSATION TABLE 

 

Name and

Principal Position

  Year     Salary(1)
($)
    Bonus(2)
($)
    Stock
Awards(3)
($)
    Option
Awards(4)
($)
    Non-Equity
Incentive
Plan
Compen-
sation(5)
($)
    Change in
Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings(6)
($)
    All Other
Compen-
sation(7)
($)
    Total
($)
 

Gary Goldberg

    2013        $1,055,151        $0        $5,283,906        $0        $2,066,796        $310,202        $47,167        $8,763,222   

President and Chief Executive Officer

    2012        $789,041        $640,261        $3,270,461        $0        $306,898        $223,590        $46,120        $5,276,371   

Laurie Brlas

    2013        $201,923        $1,168,419        $3,145,806        $0        $270,982        $48,380        $32,493        $4,868,003   

Executive Vice President and Chief Financial Officer

                                                                       

Elaine Dorward-King

    2013        $346,154        $492,826        $1,469,369        $0        $394,857        $79,118        $42,709        $2,825,033   

Executive Vice President, Sustainability and External Relations

                                                                       

Randy Engel

    2013        $613,434        $0        $1,754,705        $0        $782,313        $0 (9)       $12,000        $3,162,452   

Executive Vice President,

    2012        $575,000        $317,218        $1,941,183        $0        $182,464        $1,834,076        $97,612        $4,947,553   

Strategic Development

    2011        $575,000        $388,125        $1,394,751        $628,320        $194,062        $1,186,910        $46,253        $4,413,421   

Chris J. Robison

    2013        $453,846        $928,307        $2,449,984        $0        $789,693        $134,091        $44,659        $4,800,581   

Executive Vice President, Operations and Projects

                                                                       

Richard T. O’Brien

    2013        $259,066        $0        $0        $0        $0        $0 (10)      $7,552,182        $7,811,248   

Former Chief Executive

    2012        $1,150,000        $634,435        $6,470,633        $0        $608,212        $1,545,049        $117,547        $10,525,876   

Officer

    2011        $1,150,000        $0        $4,673,868        $1,999,200        $646,875        $1,519,837        $94,401        $10,084,181   

Russell Ball(8)

    2013        $248,000        $0        $1,848,897        $0        $0        $0 (10)      $4,149,621        $6,246,518   

Former Executive Vice

    2012        $620,000        $205,226        $2,093,092        $0        $196,743        $1,747,765        $114,392        $4,977,218   

President and Chief Financial Officer

    2011        $620,000        $279,000        $1,475,794        $694,960        $209,250        $1,256,504        $45,201        $4,580,709   

Thomas P. Mahoney

    2013        $482,888        $0        $463,485        $0        $458,064        $285,429        $12,000        $1,701,866   

Former Interim Chief Financial Officer

                                                                       
(1) 

Salary disclosed is salary paid in 2013, which is slightly greater than salary earned in 2013, based on payroll periods, as 2013 included payout of one payroll cycle from 2012.

 

(2) 

Amounts shown for Ms. Brlas, Dr. Dorward-King and Mr. Robison represent sign-on bonuses paid in 2013 and differentiation from the Annual Incentive Compensation Program payments. The differentiation from the Annual Incentive Compensation Program for Ms. Brlas, Dr. Dorward-King and Mr. Robison is a calculation of such payout based on annualized salary rate rather than salary paid in the year. Ms. Brlas received a sign on bonus of $500,000, and a differentiation from the Annual Incentive Compensation Program of $668,419. Dr. Dorward-King received sign on bonus in the amount of $325,000, $49,368 as bonus compensation she would have otherwise received in 2013 from her former employer, and a differentiation from the Annual Incentive Compensation Program of $118,458. Mr. Robison received a sign on bonus of $500,000 and a differentiation from the Annual Incentive Compensation Program of $428,307. In prior years, the Personal Objectives Bonus was reflected in this column. Based upon more concrete metrics and plan provisions, the Personal Objectives Bonus is now reflected in the non-equity incentive plan compensation column.

 

(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, 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 Company’s 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. The fair market value on the date of grant, February 27, 2013, was $40.915, and the grant values are shown in the Grants of Plan Based Awards Table. Ms. Brlas’ 2013 SSU award on September 9, 2013, has a different grant date than the other participants and thus a fair market value of $30.41 per share, the average of the high and low sales price on September 9, 2013, the date of grant. Mr. Robison’s 2013 SSU award on May 3, 2013, has a different grant date than the other participants and thus a fair market value of $33.065 per share, the average of the high and low sales price on May 3, 2013, the date of grant. 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 calculation model, which determined a grant date fair value of the 2013-2015 (payout 2016) Performance Leveraged Stock Units of $47.95 per share for each participating Named

 

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  Executive Officer with the exception of Ms. Brlas. Because Ms. Brlas’ 2013 PSU award is based upon the average closing stock price for the three months prior to her hire date of September 9, 2013, rather than the average closing stock price of the fourth quarter of 2012, and the three year performance period is September 9, 2013 to September 9, 2016, rather than January 1, 2013 to December 31, 2015, the Monte Carlo grant date fair value on her 2013-2015 (payout 2016) PSU award is $39.24 per share. Such amounts are shown in the Grants of Plan Based Awards Table. The maximum value of the Performance Leveraged Stock Units is 200% of target. According to the terms of his offer letter, Mr. Robison received only Strategic Stock Units for 2013 and no Performance Leveraged Stock Unit award. Amounts shown for Dr. Dorward-King include a sign on restricted stock unit award of 6,816 restricted stock units with a fair market value (average of the high and low on the date of grant, March 18, 2013) of $40.345. The restricted stock unit award has a three year ratable vesting period.

 

(4) 

Amounts shown represent the aggregate grant date fair value computed in accordance with the ASC 718, which is the number of options granted multiplied by the Black Scholes value. The Black Scholes value in April 2011 was $19.04.

 

(5) 

Amounts shown represent Corporate Performance Bonuses and the Personal Objectives Bonuses paid in cash. The executives received bonuses as follows: Mr. Goldberg corporate $1,104,242 and personal $962,554; Ms. Brlas corporate $144,779 and personal $126,203; Dr. Dorward-King corporate $210,963 and personal $183,894; Mr. Engel corporate $395,849 and personal $386,464; Mr. Robison corporate $406,760 and personal $382,933, and; Mr. Mahoney corporate $244,733 and personal $213,331.

 

(6) 

Amounts shown represent the increase in the actuarial present value under the Company’s qualified and non-qualified defined benefit pension plans. The PEP interest rate is based upon the PBGC interest rate. At December 31, 2013, the PBGC lump sum interest rate was 1.75%, at December 31, 2012, the PBGC lump sum interest rate was .75%, and at December 31, 2011, the PBGC lump sum interest rate was 1.50%. At December 31, 2013, the FASB rate was 5.25%, at December 31, 2012, the FASB rate was 4.30% and at December 31, 2011, the FASB rate was 5.35%.

 

(7) 

Amounts shown are described in the All Other Compensation Table below.

 

(8)

Mr. Ball separated employment from the Company on May 2, 2013 and therefore his 2013 performance leveraged stock unit and strategic stock unit grants were cancelled pursuant to the terms of the Senior Executive Compensation Program of Newmont and he received no actual value.

 

(9)

Based on the increase in the PBGC lump sum interest rate in 2013 and planned decreases to the Pension Plan of Newmont in 2014, Mr. Engel experienced a decrease of $223,340 in his pension value for 2013.

 

(10)

Messrs. O’Brien and Ball experienced a decrease in the present value of their qualified pension benefits and received payout of their non-qualified pension benefits in 2013. See All Other Compensation Table for such amounts.

 

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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 2013, salary and bonus payments accounted for 12% of Mr. Goldberg’s total compensation as reflected in the Summary Compensation Table. Salary and bonus accounted for 28%, 30%, 19%, 29% and 28% of Ms. Brlas’, Dr. Dorward-King’s, Mr. Engel’s, Mr. Robison’s and Mr. Mahoney’s total compensation, respectively, as reflected in the Summary Compensation Table.

2013 ALL OTHER COMPENSATION TABLE 

 

Name   Company
Contributions
to Defined
Contribution
Plans
($)
    Change in
Value of
Post-
Retirement
Medical
and Life
Insurance
($)
    Perquisites(1)
($)
    Relocation
Reimbursement
and Tax Gross-
Ups(2)
($)
    Consulting
Services
Fees
($)(3)
    Termination
Payments(4)
($)
    Total
($)
 

Gary Goldberg

    $12,000        $35,167        —          —          —