Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Some say Ron Paul is the only US Congressman to fly economy class… The man has integrity.
In my mind, his junior mining comparable is Nolan Watson, CEO of the Sandstorm Companies, and a personal friend of mine.
As of this morning, Sandstorm Gold had a market cap of $567 million, and is cash-flowing several million dollars per month. While Nolan routinely circles the planet marketing his companies, he’s always seated in the back of the plane, because he respects a dollar and he respects his shareholders.
Nolan once told me he can’t count how many times he’s walked past the CEO of some tiny exploration company sitting in business class as he heads to the back of the plane.
Most of these exploration companies are venture operations, with no revenues, and, frankly, little prospects of ever achieving any. Exploration companies are the stem cells of the mining world – it all starts with them – but many of these stem cells should and will die in the dish.
A friend of mine who was coming home from the PDAC in Toronto last week tipped me about a certain CEO riding in business class. I won’t name the guy, but he’s involved in a proxy contest with a dissident shareholder over misuse of corporate funds, no less.
My friend overheard someone ask the CEO whether it was his shareholders, or his personal account, paying for the ticket. (A business class ticket from Vancouver to Toronto is about $4,000 compared to about $800 for economy).
“The shareholders paid for this; I deserve to fly business class,” the CEO said, apparently.
I like flying first class too. But, in my opinion, the only CEO’s who have a right to First Class seats are those who are producing for shareholders AND if it’s a long-haul flight.
If none of these factors are at play, it should be back of the bus, buddy.
What do you think?
10 Comments
Normand Lecuyer
If a key employee is traveling around the world flying in the front of the plane makes no difference to me. It’s not proving anything to shareholders. If I’am a shareholder I want to be sure he is well rested when he arrives at destination not feeling like a pretzel because he flew in the back of the plane. If someone is concerned about shareholder value how about lower the personal bonus instead of a token like flying in the back of the plane.
Greg Sparks
I certainly agree in principal. However, as noted by Mr. Lecuyer, there are times when it is justified by the overriding consideration to get critical work done while in flight. We all have experienced having our laptops unceremoniously closed as the person seated in front of us reclines his seat in coach. This notwithstanding, I always try to book the cheapest economy seat available, but never turn down a free upgrade offered by the airline as the result of many miles flown in connection with my work. Just because a senior executive is seated up front does not always mean it is purchased at the stockholder’s expense. In many cases it is a free reward that has been earned by the grueling hours put in by the exec flying all over the world to do his job. You may not appreciate this unless you been there. A great cheap alternative that I use whenever available, is to book exit row seats in economy which usually provides ample room to work at economy prices.
Robert S. Stewart
Anyone flying in Business Class for a junior company producing nothing but debt, deserves to be shown the back door of the aircraft while it is still at 35,000 feet.
allritejack
As a mining engineer who reached Junior Executive level with a large Mining Company, I eventually got first hand experience of the executive function. All I can say is those who reach the top are no different from those who do the same in the political arena. Integrity goes out of the window and greed takes over. In addition I saw that having people of integrity on the Board is absolutely no protection from the graft and corruption that a CEO may aspire to. I found it to be very sad after a lifetime of hard work to see that it was all in vain in the end, so far as the Company was concerned.
Iwthfswyamac
I fly business class as a junior company executive when ever I can and the flight is 5 hours or more in duration. This is accomplished by buying the lowest non-refundable economy fare ticket I can find then using airline and credit card miles and upgrade certificates to request upgrades to business class if available. I have about 2.5 million airmiles with one major carrier that flies to Latin America but also accumulate miles with another 5 or so airlines and credit card companies, thus assuring I can get low fare and access to flight schedules just about anywhere. For me, the bottom line is lowest price for the ticket. But since I am always flying and the airlines have these benifits available for frequent flyers, I use them. I also use the accumilated miles, occationally, for business purposes but because of the restrictions that exist for using miles, it is generally not possible to get even economy seats, especially if the travel is not planned out months in advance! On my latest booking(yesterday for a trip planned in 2 1/2 weeks) a flight from LA to South America using accumulated airmiles took 3 days (two overnight layovers, adding several hundreds of dollars of added travel expenses and two lost work days), The lowest non-refundable economy fare was about 950 with taxes, the upgrade to business class required 5 airline upgrade certificates. I earn at least 5 certificates everytime I fly one of these routes. The total in air flying time is about 12 hours. It is a no-brainer!
Gerald Martinez
Wow. I just tuned into CSPAN to see a Senate debate about the Sudan and the first words I heard were mineral rights.
I think the best way to exchange minerals is in the free market. I hope there isn’t more bloodshed for cronies.
Bradleaman
ceo’s can be replaced, miners are the ones that make the world go round, this coming from a hardworking underground hard rock miner, we run the industry, not some guy in a suit who can “persuade” someone to invest with lots of money
Oredigr
All employees are needed to make a company/mine successful. The miners are important but no more so than a corporate accountant or executive. However, the miner gets the luxury of never taking the job home with them after their 8 hours on shift. Ask any executive how many hours they work and the answer is always the same, 24/7, the work and responsibility never stops and that is why they make the big bucks. So Mr. Bradleaman, your contribution is important but if it wasn’t for that CEO and other suits telling you where to dig and how much, you would be without a job!
Livelobsterexports
If you have a long flight and need to get work done… the go business class.
Also if you have a bad back or other condition – then go business.
If you did not want to go on the trip, but the board insisted – go business.
If your signing off on a big deal and the monies in the bag – go business.
If the company is an exploration company that needs to watch every cent that is spent… then go coach!
Gerald Martinez
Very interesting article. I know that Ron Paul also has a portfolio that is mostly in mining stocks. His interest in promoting that vital industry shows that he understands how critical it is to make precious minerals available to the market place. I also really love hearing inside stories. I am bookmarking this site after reading this article.