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In November 2016, Barrick launched its Global Employee Share Plan, which was created to make every employee of Barrick around the world an owner of the Company. More than 10,000 
employees are receiving an initial grant of 25 Barrick common shares, which they must hold for as long as they work for the Company. The Plan—which may be the first of its kind in the world—underscores the Company’s commitment to partnership, and the belief that every single employee should be personally invested in the long-term success of Barrick. To learn more about the Plan and the philosophy behind it, we spoke with Barrick Executive Chairman John L. Thornton.
Why did we create the Global Employee Share Plan, and where did the idea come from?
John L. Thornton: When we set out to take Barrick “back to the future,” we explicitly reminded everyone that this Company’s authentic, original DNA was created by Peter Munk, and a small number of his friends and colleagues. They were all owners. They all trusted each other completely, and they built a partnership culture that was ahead of its time. That is who Barrick is—and we believe that in the twenty-first century, being a partnership organization is distinctive, commercially compelling, and likely to lead to greater success.
By a partnership culture, we mean a trust-based culture, and the currency of trust is transparency. So it is a transparent culture. It is a culture of peers. There is mutual respect among individuals and between Barrick and external parties. Those who are part of Barrick recognize that in general the collective is stronger than the aggregation of individuals, and more importantly they prefer to work in that kind of culture.
We thought that the best way to replicate that original culture and update it for the twenty-first century was literally to make everyone at Barrick an owner. We want people who are all in. They are all in emotionally, and they are all in financially. In engaging with external parties, particularly with shareholders, we want to say: “Listen, it’s not that we’re aligned with your interests—we literally have the same interests, because we’re all owners here.”
That is the evolution of the Plan.
Many companies provide long-term compensation in the form of stock options or restricted share units. However, Barrick provides a significant portion of long-term compensation in the form of common shares. Why is share ownership different?
Thornton delivers a plenary address on partnerships, transparency, and innovation at the 2016 Business for Social Responsiblity Conference in New York City.
At Barrick, we have an allergy to the word compensation in this context, meaning we would draw a sharp distinction between ownership and compensation. Ownership carries with it an emotional dimension that goes far beyond just a job. A job implies almost a transaction: someone provides a service to us and we pay for it. We like to draw the analogy to being a waiter in a restaurant. Someone comes in, she orders her meal, and if the waiter does a good job she gives him a tip to recognize the work he has done. But if the waiter is also the owner or part owner of the restaurant, not only is he going to give good service to the one customer—he is going to worry about the service at the next table, he is going to worry if the floors are clean, and he is going to worry whether the food is good. It is a whole different level of involvement. So when we talk about ownership, we mean it in the broadest and deepest sense of the word.
Furthermore, our people cannot sell shares issued to them under the Employee Share Plan for as long as they are working at Barrick. The shares are illiquid, and we believe that is the best way to reflect the fact that this is really in perpetuity and the opposite of a transaction. It is fundamentally different.
Restricted share units [RSUs] are really just a form of delayed cash. They have a vest date, and when that date arrives, employees receive their RSUs in cash. They put the money in their pocket, go home, and don’t think any more about it. It is a transaction, and that is not what we are looking for. We are looking for our people to be all in and to get up in the morning both highly motivated and highly focused on whether we are really behaving as owners. If you are an owner, you are going to care.
There’s a cost to implementing the Global Employee Share Plan. Is it worth it?
We don’t look at it as a cost at all: we look at it as an investment. It is an investment in our people, and what we are saying to them is: “If Barrick is right for you, you should be here a good long time, for your whole career, and you should be extremely happy the day you retire that you have set aside a nice amount of wealth that you can use as you see fit.”
So there may be more shares awarded under the Global Employee Share Plan in the future?
Yes. The pilot has been very successful, so we are now looking at how to enhance the program going forward. We will likely allocate a sum of money each year for the Employee Share Plan, tied to Company performance. If Barrick is performing well, the Board may decide to award more shares to employees. If we are not performing well, the amount should go down or not be awarded.
What message are you hoping to send with the introduction of the Global Employee Share Plan? 
The message we are trying to send is that Barrick is intentionally distinctive. There are certain things about us that define us, and we believe the Share Plan is entirely consistent with the original DNA of the business that Peter Munk started. We think that in the twenty-first century, engaging with our people and external parties—the communities, governments, NGOs, suppliers, and operating companies we work with—as partners is the winning formula.
