UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A | ||||||||||||||||||||
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Proxy Statement Pursuant to Section 14(a) of the |
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Filed by the Registrant | |
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Filed by a Party other than the Registrant |
CHECK THE APPROPRIATE BOX: | |||
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| Preliminary Proxy Statement | ||
| Confidential, | ||
| Definitive Proxy Statement | ||
| Definitive Additional Materials | ||
| Soliciting Material |
Royal Gold, Inc.
(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): | |||
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Our new leadership team is well-equipped to continue to execute on our business plan and deliver the results that have made Royal Gold a success over the long term. |
DEAR FELLOW STOCKHOLDERS, |
| One of the primary responsibilities of your Board is to ensure that Royal Gold has the right leadership in place to successfully execute its business plan, and I am pleased to report that our multi-year succession planning effort was successful as we transitioned to a new generation of leadership this year. Bill Heissenbuttel was chosen to serve as our new President and Chief Executive Officer and as a member of the Board effective January 2, 2020, and, coincident with his promotion, Paul Libner was selected to fill the role of Chief Financial Officer and Treasurer. At the same time, Mark Isto was promoted to the role of Executive Vice President and Chief Operating Officer, and Randy Shefman was appointed as Vice President and General Counsel. |
BUSINESS MODEL | GOLD FOCUSED | GROWTH | |||||
Royal Gold’s business model provides investors exposure to a globally diversified portfolio of 187 assets, including 41 producing mines and 16 development-stage projects, without incurring many of the costs and risks associated with mine operations. | 79% of Royal Gold’s revenue in fiscal 2020 was generated from gold. | Royal Gold prioritizes investment in long-lived assets that we expect will provide our stockholders optionality to gold price and production and reserve growth. |
All these appointments were internal promotions and it is a testament to the depth of talent within the organization that these key roles were filled internally. Over the past few months, I have been impressed to see the renewed energy of the management team, and your Board looks forward to working with the new team as they consider how to push Royal Gold forward from here. I would also like to recognize the significant contributions of Christopher Thompson to Royal Gold. Chris has decided to retire from the Board effective as of the annual meeting date. He has always been willing to share his vast experience with colleagues on the Board and with management. We wish him the very best. You are cordially invited to join us for our 2020 virtual annual meeting of stockholders, which will be held on November 18, 2020, at 9 a.m. mountain time. Holders of record of our common stock on September 21, 2020, are entitled to notice of and to vote at the virtual annual meeting. The accompanying notice of virtual annual meeting and proxy statement describe the business to be conducted at the meeting. Thank you for your support. Sincerely, |
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William Hayes | ||
Chairman |
CAPITAL DEPLOYMENT | FINANCIAL STRENGTH | RETURN TO STOCKHOLDERS | |||||
Royal Gold maintains a strong balance sheet that allows us to opportunistically invest at favorable times in the price cycle, often when counterparties most need financing. | Royal Gold’s high margin business model allows us to source our capital efficiently with a preference to grow our business from cash flow from operations. | Royal Gold concentrates on margin expansion by maintaining a lean cost structure, measures success on per share metrics, and believes in paying a growing and sustainable dividend. |
4 ROYAL GOLD, INC.
BACKGROUND
DATE AND TIME Wednesday, November 18, 2020 9:00 a.m. mountain time | |
LOCATION Virtual-Only Meeting at www.virtualshareholder meeting.com/RGLD2020 | |
ELIGIBILITY TO VOTE You are eligible to vote at the virtual annual meeting and any postponement or adjournment of the meeting if you are a holder of Royal Gold’s common stock at the close of business on September 21, 2020. | |
VOTING DEADLINE Proxies voted by mail, telephone, or internet must be received by 11:59 p.m. eastern time on November 17, 2020. |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2020 ANNUAL STOCKHOLDERS MEETING OF STOCKHOLDERSTO BE HELD ON NOVEMBER 18, 2020:
Dear Stockholders:
You are cordially invited to attend our 2017 Annual MeetingOur notice of Stockholders (the “Annual Meeting”). At the Annual Meeting, we will ask you to vote on:
1. The election of the three Class III Director nominees identified in the accompanyingvirtual annual meeting and proxy statement;
2. The ratification of the appointment of Ernst & Young LLP as our independent registered public accountantsstatement, annual report on Form 10-K, electronic proxy card, and other materials for the fiscal year ending June 30, 2018;
3. The approval,annual meeting are available on an advisory basis,the internet at www.proxyvote.com together with any amendments that may be made to any of the compensation of the named executive officers;these documents.
VOTING ITEMS | BOARD RECOMMENDATION | |||
1 | The election of the three Class III director nominees identified in the accompanying proxy statement | FOR each nominee | ||
2 | The approval, on an advisory basis, of the compensation of our named executive officers | FOR | ||
3 | The ratification of the appointment of Ernst & Young LLP as our independent registered public accountant for the fiscal year ending June 30, 2021 | FOR |
4. The approval, on an advisory basis, of the frequency with which the advisory vote to approve named executive officer compensation should be held; and
5. The transaction of suchStockholders will transact any other business as may properly be brought properly before the meeting and any and all adjournmentspostponement or postponements thereof.adjournment of the meeting.
VIRTUAL-ONLY MEETING
Our BoardThe annual meeting will be held entirely online via live audio webcast due to the public health impact of Directors fixed the close of business on September 19, 2017, as the record date for determining the stockholders entitled to notice ofCOVID-19 pandemic and to vote atsupport the health and wellbeing of our Annual Meeting. Thus, youstockholders, directors, employees, and other stakeholders. You can attend and participate in the meeting by visiting www.virtualshareholdermeeting.com/RGLD2020, where authenticated stockholders will be able to listen to the meeting live, submit questions, and vote. There will be no physical location for stockholders to attend.
VOTING
It is important that your shares are eligible to voterepresented and voted at the Annual Meeting and any postponements or adjournments of the meetingvirtual annual meeting. Even if you areexpect to log into the virtual annual meeting, please vote your shares as promptly as possible by telephone or the internet or by signing, dating, and returning the proxy card mailed to you if you received a holderpaper copy of Royal Gold’s common stock at the close of business on September 19, 2017.this proxy statement.
MEETING MATERIALS
We are mailing our Notice“Notice of Internet Availability of Proxy MaterialsMaterials” to stockholders on or about October 2, 2017, containing5, 2020. This document contains instructions on how toyou can access our proxy materials online. We are also mailing a full set of our proxy materials to stockholders who previously requested paper copies of the materials. (Please see page 1 of the proxy statement for more information on how these materials will be distributed.) Our proxy materials can also be viewed on our Company website at www.royalgold.com under “Investors — Financial Reporting — All SEC Filings.– Proxy Materials.”
BY ORDER OF THE BOARD OF DIRECTORS
Margaret McCandless
Bruce C. Kirchhoff
Vice President,Assistant General Counsel, Chief Compliance Officer, and Corporate Secretary
October 2, 20175, 2020
THE ROYAL GOLD2020 PROXY STATEMENT 5
2017 ANNUAL MEETING OF STOCKHOLDERS
Will be Held on Thursday, November 16, 2017
at 9:00 a.m. MST
At the RITZ-CARLTON HOTEL
Located at 1881 Curtis Street, Denver, CO 80202
YOUR VOTE IS IMPORTANT!
It is important that your shares are represented and voted at the Annual Meeting. For that reason, whether or not you expect to attend in person, please vote your shares as promptly as possible by telephone or by Internet, or by signing, dating and returning the proxy card mailed to you if you received a paper copy of this proxy statement.
Attendance at the Annual Meeting
On the day of the Annual Meeting, you will be asked to sign in with a valid picture identification such as a driver’s license or passport. Registration and seating will begin at 8:30 a.m. and the meeting will begin at 9:00 a.m. MST.
Voting Deadline
Proxies voted by mail, telephone or Internet must be received by 11:59 p.m. (Eastern Standard Time) on November 15, 2017.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL STOCKHOLDER MEETING TO BE HELD ON NOVEMBER 16, 2017: Our Notice of Annual Meeting, Proxy Statement and related exhibits, Annual Report including our Form 10-K, electronic proxy card and any other Annual Meeting materials are available on the Internet at www.proxyvote.com together with any amendments to any of these documents.
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This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and we encourage you shouldto read the entire proxy statement before voting. For more complete information regarding the Company’s 2017our 2020 performance, pleasewe encourage you to review the Company’sour Annual Report on Form 10-K.
MEETING AGENDA AND VOTING MATTERS2020 COMPANY PERFORMANCE
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CLASS III DIRECTOR NOMINEES TO SERVE UNTIL THE 2020 ANNUAL MEETING
Our Board and management are committed to increasing long-term stockholder value and returning capital to stockholders, as evidenced by some of our significant achievements during fiscal year 2020:
Strong financial performance with new records for revenue of $499 million, operating cash flow of $341 million, and earnings of $199 million | |
Record $71 million returned to stockholders as dividends during fiscal year 2020, and increased our per-share dividend for the 19th consecutive year | |
Robust production volume of 320,000 gold equivalent ounces (“GEOs”), which are calculated by us as our reported revenue divided by the average gold price for the same period | |
Maintained available liquidity of $1 billion as of June 30, 2020, representing $319 million in working capital and $695 million credit facility availability | |
Funded growth with $154 million invested in projects that we expect to provide future revenue growth, including $136 million of advance payments towards the Khoemacau silver stream |
LEADERSHIP TRANSITION
During fiscal year 2020, we made several key leadership changes as a result of ongoing management succession planning. As initially announced in May 2019, Tony Jensen retired from his positions as our President and Chief Executive Officer and a Class I director effective January 2, 2020. After a thorough search process, our Board appointed William Heissenbuttel as our President and Chief Executive Officer and a Class I director with a term ending in November 2021. Mr. Heissenbuttel most recently served as our Chief Financial Officer and Vice President Strategy. In addition, effective January 2, 2020, our Board promoted Mark Isto to Executive Vice President and Chief Operating Officer, Paul Libner to Chief Financial Officer and Treasurer, and Randy Shefman as Vice President and General Counsel.
In September 2020, Christopher Thompson notified us of his intention not to stand for reelection to our Board at the annual meeting on November 18, 2020, and to retire from the Board on that date. After a thorough search process, our Board has nominated Fabiana Chubbs to stand for election to the Board at the annual meeting.
For more information about Royal Gold’s Board and management succession planning, see “Process for Selecting Directors” on page 24 and “Management Succession Planning” on page 25.
6 ROYAL GOLD, INC.
Proxy Summary
PROPOSAL 1 | |||
ELECTION OF THREE CLASS III DIRECTOR NOMINEES TO SERVE UNTIL THE 2023 ANNUAL MEETING | |||
page 14 ► | Our Board recommends that you vote FOR each director nominee |
DIRECTOR NOMINEES AT A GLANCE
Our Board is composedcomprised of eight membersseven directors divided into three classes, with each class serving a term of three years. The following table summarizes important information about each Directordirector nominee standing for re-electionelection to the Board for a three-year term expiring in 2020. As previously disclosed, Mr. Haase is not standing for re-election as a Class III Director.November 2023.
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Independent Director Nominee If Elected, Member of the Audit and Finance Committee Retired Mining Executive Serves on one other public company board | EXPERIENCE AND QUALIFICATIONS ●Audit committee financial expert ●Public company board service ●CFO/administration and operations ●Corporate governance ●Finance ●Industry and mining ●International business ●Leadership ●Reputation in the industry ●Risk management | |
KEVIN McARTHUR, 65 Independent Director since 2014 Member of the Compensation, Nominating, and Governance Committee Retired Mining Executive Serves on | ●Public company board service ●CEO/administration and operations ●Corporate governance ●Industry and mining ●International business |
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2020 PROXY STATEMENT 7
Proxy Summary
Independent Director since 2017 Member of the Compensation, Nominating, and Governance Committee Retired Mining Executive Serves on | ●Public company board service CSR
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●Litigation management ●Mergers and acquisitions, financings ●Reputation in the industry | |||
CONTINUING DIRECTORS AT A GLANCE
CLASS I DIRECTORS (TERM EXPIRES 2021)
Director Since | Board Committees | ||||||||||||
Director | Age | Current Position | Independent | AF | CNG | ||||||||
William Heissenbuttel | 55 | 2020 | President and CEO of Royal Gold, Inc. | ||||||||||
Jamie Sokalsky | 63 | 2015 | Retired Mining Executive | ||||||||||
CLASS II DIRECTORS (TERM EXPIRES 2022) | |||||||||||||
William Hayes | 75 | 2008 | Retired Mining Executive | ||||||||||
Ronald Vance | 67 | 2013 | Retired Mining Executive |
Member | |||||
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| CNG |
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Governance |
ATTRIBUTES OF ROYAL GOLD BOARD OF DIRECTORSQUALITIES
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1-5 years | |||||
6-10 years | |||||
10+ years |
8 ROYAL GOLD, INC.
DIRECTOR Proxy Summary
A BALANCED BOARD
Our Board seeks director nominees with a diverse set of qualifications and experience that aligns with our business strategy.
QUALIFICATIONS AND EXPERIENCE OF DIRECTOR NOMINEES AND CONTINUING DIRECTORS
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Audit Committee Financial Expert |
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Board Service |
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Business Development and Marketing |
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International Business Experience |
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Reputation in the Industry |
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Risk Management |
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2017 COMPANY PERFORMANCE
Our Board of Directors and management continue to demonstrate strong commitment to increasing long-term stockholder value and returning capital to stockholders, as evidenced by some of our significant achievements during fiscal 2017:
· Three of the new streams acquired early in fiscal year 2016, Wassa and Prestea, Andacollo, and Pueblo Viejo, already rank among our top five revenue generators, and accounted for 40% of our fiscal year 2017 revenue.
· We achieved record revenue of $441 million on record volume of 280,800 Net GEOs of production.
· We returned a record $61 million (23% of operating cash flow) to stockholders in the form of dividends, representing an increase of 5% over the prior year. Fiscal year 2017 was our 16th consecutive year of increasing dividends.
· We successfully reduced the uncertainty concerning our investment in the Mount Milligan Mine.
· We completed our stream funding commitments.
· We repaid $95 million on our revolving credit facility, and expanded availability under the facility from $650 million to $1 billion.
·We ended fiscal 2017 with a total shareholder return of 10%.
Please refer to our Annual Report on Form 10-K, and to the discussion on page 23 of this Proxy Statement, for more detailed information concerning our financial results for fiscal 2017.
CORPORATE GOVERNANCE BEST PRACTICES HIGHLIGHTS
CORPORATE GOVERNANCE PRACTICES DESIGNED TO PROTECT AND PROMOTE LONG-TERM VALUE | ||
●Separate CEO and Chairman ●Lead independent director appointed if Chair is not independent ●Six of seven directors are independent, including Chairman of the Board and all committee members ●All AF Committee members deemed financial experts ●Majority voting in uncontested director elections ●Significant Board refreshment over recent years ●Independent directors serve on an average of one outside public company board ●Thorough on-boarding program ●Encourage continuing director education; quarterly regulatory and governance updates | ●Director retirement policy ●Annual Board and committee self-assessments ●Robust director and management succession planning processes ●Regular executive sessions of the Board and committees ●Annual review of governing policies and charters ●Quarterly review of enterprise risk management program ●Regular review of cybersecurity program ●Environmental, Social Responsibility, and Governance Policy ●Stock ownership guidelines for directors and executives ●Regular stockholder engagement ●Majority of executive compensation is variable and linked to our performance | ●Annual advisory say-on-pay vote ●CNG Committee retention of independent advisor to assist with executive compensation and workforce rewards topics ●Robust insider trading policy ●No perquisites or tax gross-ups ●No stock option repricing without stockholder approval ●CNG Committee application of reasonable discretion to evaluate holistic performance and alignment of pay outcomes ●Policies against hedging and pledging company stock ●Strong Code of Business Conduct and Ethics and whistleblower program ●Commitment to an inclusive work environment supported by our Diversity Policy |
Proxy Summary
PROPOSAL 2 | |||
ADVISORY VOTE ON EXECUTIVE COMPENSATION | |||
page 33 ► | The Board recommends you vote FOR this proposal |
2020 COMPENSATION FRAMEWORK
Our executive compensation program consists of base salary, a short-term cash incentive, long-term equity incentive awards, and modest fixed benefits. The majority of target compensation is variable, with an emphasis on long-term equity designed to align our executives’ interests with the interests of our stockholders generally.
Current CEO | Element | When | Fiscal Year 2020 Performance Measures | Measuring Period | How Payout Determined | Other Current NEOs | |||||||
Salary | Reviewed annually | Individual experience and performance | Ongoing | Benchmarking; individual experience and performance | |||||||||
Short-term Incentive | Awarded annually | Financial, operational, strategic, and individual measures (page 38) | 1 year | CNG Committee verification of performance as compared to preestablished measures | |||||||||
Stock Options and SARs | Awarded annually | Stock performance and service conditions (page 45) | 1- to 3-year vesting | Stock performance | |||||||||
Restricted Shares | Net revenue and service conditions (page 45) | 3- to 5-year vesting | CNG Committee verification of performance as compared to preestablished measure | ||||||||||
Performance Shares (GEOs) | Growth in annual net GEOs and service conditions (page 45) | Annually up to year 5 | CNG Committee verification of performance as compared to preestablished measures | ||||||||||
Performance Shares (TSR) | TSR percentile compared to GDX constituents and service conditions (page 45) | 1 and 3 years | |||||||||||
Benefits | |||||||||||||
10 ROYAL GOLD, INC.
Corporate Governance Practices Designed toProxy Summary
ProtectPAY-FOR-PERFORMANCE ALIGNMENT
These Short- and Long-Term Performance Measures | Are Designed to Promote Achievement of these Elements of our Business Strategy | For Fiscal Year 2020, this Level of Achievement | Produced this Level of Short- and Long-Term Incentive Award or Vesting | ||||
Operating Cash Flow Multiple vs. GDX Constituents | Financial flexibility and discipline; capital deployment | 130% of target opportunity | Short-term incentive awards paid out at approximately or slightly below each executive’s preestablished target | ||||
Net GEO Production | Gold focused; capital deployment | 95% of target opportunity | |||||
Cost Containment | Financial flexibility and discipline | 200% of target opportunity | |||||
Capital Deployment | Capital deployment | 50% of target opportunity | |||||
Peak Gold JV | Growth; capital deployment | 0% of target opportunity | |||||
Financial Strength | Financial flexibility and discipline | 100% of target opportunity | |||||
Individual Performance | Management development; succession planning | Varied by NEO | |||||
Stock Options and SARs | Stockholder return | 7% increase in stock price from August 2019 grant date to first annual vesting date in August 2020 | Portion of awards that vested based on continued service was in the money on first vesting date | ||||
Restricted Shares | Executive retention | >$280M net revenue | Permitted vesting of restricted stock awarded for FY 2020, subject to service requirement | ||||
Performance Shares (GEO) | Growth | 284,000 net GEOs | Actual net GEOs did not meet preestablished goals, so no GEO shares vested for FY 2020 under awards granted in 2015-2019 | ||||
Performance Shares (TSR) | Stockholder return | 3-year TSR at 58th percentile under awards granted in August 2017 | Permitted vesting of a number of shares between threshold and target under 3-year TSR awards granted in August 2017 | ||||
First, 1-year TSR at 80th percentile under awards granted in August 2017; all other 1-year TSRs below 50th percentile threshold under awards granted in August 2017, 2018, and 2019 | Permitted vesting of a number of shares between threshold and target under 1-year TSR awards granted in August 2017; no vesting of shares under any other 1-year TSR awards granted in August 2017, 2018, and 2019 |
See detailed discussion of short-term and Promote Long-Term Stockholder Value
· Separate CEOlong-term incentive programs, including definitions of net revenue, net GEOs, and Chairman of the Board
· Seven of eight Directors are independent, including all Committee members
· Significant Board refreshment over recent years; average Director tenure is approximately 5.6 years
· Average Director serviceTSR, on outside boards is one board
·pages 42-45. Thorough orientation program for new Directors
· Independent Directors meet regularly without management present
· Significant Director and executive officer stockholding requirements
· Board Governance Guidelines, Committee Charters and Code of Business Ethics and Conduct; all available online
· Board oversight of robust Enterprise Risk Management Program
· Directors reaching age 72 submit offer of resignation which the Board has discretion to accept or reject
· Majority voting in uncontested Director elections
· All Audit and Finance Committee members determined to be Audit Committee Financial Experts
· Active stockholder engagement
· Strong link between executive officer compensation and Company performance
· Annual advisory say on pay vote
· Anti-hedging and anti-pledging policies for all Directors and executive officers
· Annual Board and Committee self-evaluations
· No perquisites and no excise tax gross-ups for executive officers
· No stock option re-pricing without stockholder approval
· Both management and Director succession planning are among the Board’s priorities
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM2020 PROXY STATEMENT 11
Stockholders are asked to ratify the selectionTable of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2018. Below is a summary of fees paid to Ernst & Young in fiscal year 2017.Contents
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Audit Fees |
| $ | 756,876 |
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Audit-Related Fees |
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Tax Fees |
| 246,745 |
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All Other Fees |
| 30,517 |
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Total |
| $ | 1,034,138 |
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Proxy Summary
COMPENSATION OF NAMED EXECUTIVE OFFICERSBEST PRACTICES
Our executive compensation program is designed to align with governance best practices and the best interests of our stockholders.
✓ | WE DO | ✕ | WE DON’T | |
●Pay for performance with 72% of our current CEO’s and 67% of our other current NEOs’ total direct compensation for fiscal year 2020 representing variable or at-risk compensation ●Use multiple performance measures for both short- and long-term incentive programs ●Use challenging short- and long-term goals focused on growth and long-term returns ●Establish target and maximum awards in short- and long-term incentive programs ●Use a formulaic scorecard to determine short-term incentives ●Use multiple types of equity awards under long-term incentive program intended to motivate performance over various time horizons and balance the overall risk-reward relationship ●Use a peer group of gold-focused companies to benchmark performance and compensation levels ●Target NEO compensation at or near the median of our peer group ●Require executives to meet robust stock ownership guidelines to align their interests with the interests of our other stockholders ●Apply double-trigger vesting for equity awards in a change of control ●Engage with stockholders on a variety of topics, including governance and compensation ●Regularly monitor our executive compensation program to assess and mitigate compensation-related risks ●Maintain independence of the CNG Committee, and our independent compensation consultant reports directly to the CNG Committee | ●Guarantee salary increases, annual short-term incentive payments, or long-term incentive opportunities ●Provide excessive perquisites or other special benefits ●Permit repricing of stock options without stockholder approval ●Provide excise tax gross-ups, including for change-of-control payments ●Permit executives or directors to hedge or pledge our stock ●Maintain a defined benefit pension plan or any special executive retirement plans |
12 ROYAL GOLD, INC.
Proxy Summary
EXECUTIVE COMPENSATION
Stockholders are asked to approve, on an advisory basis, the compensation of our Named Executive Officersnamed executive officers (“NEOs” or “executives”). The following table summarizes the total potential compensation package for fiscal year 20172020 for each NEO.
Please see the Summary Compensation Table of Contents
Name and Principal |
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| Stock and |
| Non-Equity |
| All Other |
| Total |
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Tony Jensen President and Chief Executive Officer |
| $ | 720,000 |
| $ | 1,810,790 |
| $ | 733,000 |
| $ | 31,389 |
| $ | 3,295,179 |
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Stefan Wenger Chief Financial Officer and Treasurer |
| $ | 440,000 |
| $ | 734,287 |
| $ | 328,000 |
| $ | 37,214 |
| $ | 1,539,501 |
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William Heissenbuttel Vice President Corporate Development |
| $ | 470,000 |
| $ | 752,142 |
| $ | 345,000 |
| $ | 38,389 |
| $ | 1,605,531 |
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Mark Isto Vice President Operations |
| $ | 350,000 |
| $ | 658,552 |
| $ | 266,000 |
| $ | 13,446 |
| $ | 1,287,998 |
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Bruce C. Kirchhoff Vice President, General Counsel and Secretary |
| $ | 386,000 |
| $ | 617,189 |
| $ | 287,000 |
| $ | 31,074 |
| $ | 1,321,263 |
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IMPORTANT DATES FOR 2018 ANNUAL MEETING OF STOCKHOLDERS
Stockholder proposals submittedand accompanying footnotes beginning on page 53 for inclusionadditional information. All amounts are in our 2018 proxy statement pursuant to SEC Rule 14a-8 must be received by us by June 4, 2018.dollars.
Notice of stockholder proposals to be raised from the floor at the 2018 Annual Meeting of Stockholders outside of SEC Rule 14a-8 must be received by us between July 19, 2018 and August 18, 2018.
Name and Principal Position | Salary | Bonus | Non-Equity Incentive Plan Compensation | Stock Awards | Option Awards | All Other Compensation | Total Compensation |
William Heissenbuttel President and CEO | 583,000 | 50,000 | 477,000 | 842,551 | 413,142 | 37,863 | 2,403,556 |
Mark Isto EVP and CCO, Royal Gold Corp | 473,500 | 50,000 | 347,000 | 559,782 | 269,671 | 34,116 | 1,734,069 |
Daniel Breeze VP Corp Dev, RGLD Gold AG | 370,000 | — | 275,000 | 406,475 | 194,594 | 35,340 | 1,281,409 |
Paul Libner CFO and Treasurer | 308,650 | — | 194,000 | 288,800 | 142,852 | 33,718 | 968,020 |
Randy Shefman VP and GC | 295,250 | — | 186,000 | 257,108 | 126,225 | 26,849 | 891,432 |
Tony Jensen Former President and CEO | 411,000 | — | — | — | — | 3,730,033 | 4,141,033 |
Bruce Kirchhoff Former VP, GC, and Secretary | 213,000 | 177,500 | — | 415,502 | 193,788 | 243,650 | 1,243,440 |
RATIFICATION OF ERNST & YOUNG LLP AS AUDITOR FOR 2021 | |||
page 62 ► | The Board recommends you vote FOR this proposal |
STOCKHOLDERS ENTITLED TO VOTE AS OF RECORD DATE
This Proxy StatementOur AF Committee has selected Ernst & Young LLP to serve as our independent registered public accounting firm for fiscal year 2021. Our Board is furnishedasking stockholders to holdersratify this selection. Stockholder approval or ratification is not required. However, we believe that submitting the appointment of Ernst & Young LLP to stockholders for ratification is good corporate governance. If stockholders do not ratify this appointment, our AF Committee will take the voting results under consideration. Even if stockholders ratify the appointment of Ernst & Young LLP, the AF Committee, in its discretion, may change the appointment at any time if it determines that a change would be in the best interest of Royal Gold Inc. common stock, par value $0.01 per share (“common stock”), in connection with the solicitation of proxies on behalf of the Board of Directors of Royal Gold, Inc. (the “Company” or “Royal Gold”) to be voted at the 2017 Annual Meeting of Stockholders of the Company (the “Annual Meeting”) to be held on Thursday, November 16, 2017, at 9:00 a.m. MST. Stockholders of record holding shares of the Company’s common stock at the close of business on September 19, 2017 (the “Record Date”) are eligible to vote at the Annual Meeting and at all postponements and adjournments thereof. There were 65,428,103 shares outstanding on the Record Date.
our stockholders.
INTERNET AVAILABILITY OF2020 PROXY MATERIALSSTATEMENT 13
We utilize the Securities and Exchange Commission (the “SEC”) rules allowing us to furnish proxy materials through a “notice and access” model via the Internet. On or about October 2, 2017, we will furnish a NoticeTable of Internet Availability to our stockholders of record containing instructions on how to access the proxy materials and to vote. In addition, instructions on how to request a printed copy of these materials may be found in the Notice. For more information on voting your stock, please see “Voting Your Shares” below.Contents
VOTING YOUR SHARES
Each share of Royal Gold common stock that you own entitles you to one vote. If you are a stockholder of record, your proxy card shows the number of shares of Royal Gold common stock that you own. If your stock is held in the name of your broker, bank or another nominee (a “Nominee”), the Nominee holding your stock will send you a voting instruction form. You may elect to vote in one of three methods:
·By Phone or Internet - You may vote your shares by following the instructions on your notice card, proxy card or voting instruction form. If you vote by telephone or via the Internet, you do not need to return your proxy card.
·By Mail - If this proxy statement was mailed to you, or if you requested that a proxy statement be mailed to you, you may vote your shares by signing and returning the enclosed proxy card or voting instruction form. If you vote by proxy card, your “proxy” (each or any of the individuals named on the proxy card) will vote your shares as you instruct on the proxy card. If you vote by voting instruction form, the Nominee holding your stock will vote your shares as you instruct on the voting instruction form. If you sign and return the proxy card, but do not give instructions on how to vote your shares, your shares will be voted as recommended by the Board of Directors: (1) “FOR” the election of Directors as described herein under “Proposal 1 - Election of Directors;” (2) “FOR” ratification of the appointment of the Company’s independent registered public accountants described herein under “Proposal 2 - Ratification of Appointment of Independent Registered Public Accountants;” (3) “FOR” a non-binding advisory vote on the compensation of the Named Executive Officers described herein under “Proposal 3 — Advisory Vote on Compensation of Named Executive Officers;” and (4) “FOR” ONE YEAR on a non-binding advisory vote on the frequency with which to hold the advisory vote on Named Executive Officer compensation as described herein under “Proposal 4 —Advisory Vote on Frequency of Voting on Executive Officer Compensation.”
·In Person - You may attend the Annual Meeting and vote in person. A ballot will be provided if you wish. If your stock is held in the name of a Nominee, you must present a proxy from that Nominee in order to verify that the Nominee has not voted your shares on your behalf.
REVOCATION OF PROXY OR VOTING INSTRUCTION FORM
If you are a holder of common stock, you may revoke your proxy at any time before the proxy is voted at the Annual Meeting. This can be done by submitting another properly completed proxy card with a later date, sending a written notice of revocation to the Vice President, General Counsel and Secretary of the Company with a later date, or by attending the Annual Meeting and voting in person. You should be aware that simply attending the Annual Meeting will not automatically revoke your previously submitted proxy; rather you must notify a Company representative at the Annual Meeting of your desire to revoke your proxy and vote in person. Written notice revoking a proxy should be sent to the Vice President, General Counsel and Secretary, Royal Gold, Inc., 1660 Wynkoop Street, Suite 1000, Denver, Colorado 80202.
QUORUM AND VOTES REQUIRED TO APPROVE PROPOSALS
A majority of the outstanding shares of the Company’s common stock entitled to vote, represented in person or by proxy, will constitute a quorum at a meeting of the stockholders. Abstentions and “broker non-votes” will be counted as being present in person for purposes of determining whether there is a quorum. A “broker non-vote” occurs when a Nominee holding shares for a beneficial owner does not vote those shares on a proposal because the Nominee does not have discretionary voting authority and has not received voting instructions from the beneficial owner with respect to that proposal.
Cumulative voting is not permitted for the election of Directors. Under Delaware law, holders of common stock are not entitled to appraisal or dissenters’ rights with respect to the matters to be considered at the Annual Meeting.
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TABULATION OF VOTES
Votes at the Annual Meeting will be tabulated and certified by Broadridge Financial Solutions, Inc.
SOLICITATION COSTS
In addition to solicitation of proxies by mail or by electronic data transfers, the Company’s Directors, officers or employees, without additional compensation, may make solicitations by telephone, facsimile, or personal interview. The Company engaged Saratoga Proxy Consulting LLC, 520 8th Avenue, New York, NY 10018, to assist with the solicitation of proxies for a fee of $15,000, plus expenses. All costs of the solicitation of proxies will be borne by the Company. The Company will also reimburse the banks and brokers for their reasonable out-of-pocket expenses in forwarding proxy materials to beneficial owners of shares of common stock.
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The following table shows the beneficial ownership, as of September 19, 2017, of the Company’s common stock by each Director, each of the Company’s NEOs, persons known to the Company, based upon the Company’s review of documents filed with the SEC with respect to the ownership of the Company’s common stock, to be the beneficial owner of more than 5% of the issued and outstanding shares of common stock, and by all of the Company’s Directors and executive officers as a group. Unless otherwise noted below, the address of each beneficial owner listed in the table is c/o Royal Gold, Inc., 1660 Wynkoop Street, Suite 1000, Denver, Colorado 80202.
Name of Beneficial Owner |
| Number of Shares of Common |
| Percent of |
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Tony A. Jensen President, Chief Executive Officer and Director |
| 240,885 | (1) | * |
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William M. Hayes Chairman of the Board |
| 21,854 |
| * |
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M. Craig Haase Director |
| 27,039 |
| * |
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C. Kevin McArthur Director |
| 11,829 | (2) | * |
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Jamie C. Sokalsky Director |
| 6,185 | (3) | * |
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Christopher M.T. Thompson Director |
| 38,329 | (2) | * |
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Ronald J. Vance Director |
| 11,179 | (2) | * |
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Sybil E. Veenman Director |
| 2,015 | (3) | * |
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Stefan L. Wenger Chief Financial Officer and Treasurer |
| 115,739 | (4) | * |
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William H. Heissenbuttel Vice President Corporate Development |
| 133,968 | (5) | * |
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Mark Isto Vice President Operations |
| 25,132 | (6) | * |
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Bruce C. Kirchhoff Vice President, General Counsel and Secretary |
| 74,471 | (7) | * |
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All Directors and Executive Officers as a Group including those named above (13 persons) |
| 732,329 | (8) | 1.12 | % |
The Vanguard Group 100 Vanguard Boulevard Malvern, PA 19355 |
| 5,851,427 | (9) | 8.94 | % |
BlackRock Fund Advisors 55 East 52nd Street New York, New York 10055 |
| 4,911,100 | (10) | 7.51 | % |
Capital World Investment Management 333 South Hope Street, 55th Floor Los Angeles, CA 90071 |
| 4,158,000 | (11) | 6.36 | % |
First Eagle Investment Management, LLC 1345 Avenue of the Americas New York, New York 10105 |
| 3,479,449 | (12) | 5.32 | % |
Van Eck Associates Corporation 666 Third Avenue — 9th Floor New York, New York 10017 |
| 3,451,694 | (13) | 5.28 | % |
* Less than 1% ownership of the Company’s common stock.
(1) Includes 40,836 shares of restricted stock, 73,301 Stock Appreciation Rights (“SARs”) and options to purchase 3,610 shares of common stock that were exercisable as of September 19, 2017, or which become exercisable within 60 days from such date.
(2) Includes 1,015 shares of restricted stock, vesting of which shares is deferred until the Director’s separation from service to the Company, or separation within 12 months of a change in control, in accordance with the terms and conditions of the Company’s Deferred Compensation Plan for Non-Employee Directors adopted July 15, 2017.
(3) Includes 1,015 shares of restricted stock units, vesting of which shares is deferred until the Director’s separation from service to the Company, or separation within 12 months of a change in control, in accordance with the terms and conditions of the Company’s Deferred Compensation Plan for Non-Employee Directors adopted July 15, 2017.
(4) Includes 15,309 shares of restricted stock, and 43,520 SARs and options to purchase 4,199 shares of common stock that were exercisable as of September 19, 2017, or which become exercisable within 60 days from such date.
(5) Includes 15,910 shares of restricted stock, and 53,354 SARs and options to purchase 11,160 shares of common stock that were exercisable as of September 19, 2017, or which become exercisable within 60 days from such date.
(6) Includes 12,252 shares of restricted stock, and 5,013 SARs and options to purchase 2,591 shares of common stock that were exercisable as of September 19, 2017, or which become exercisable within 60 days from such date.
(7) Includes 13,737 shares of restricted stock and 25,637 SARs and options to purchase 5,076 shares of common stock that were exercisable as of September 19, 2017, or which become exercisable within 60 days from such date.
(8) Includes 116,229 shares of restricted stock and 202,505 SARs and options to purchase 27,916 shares of common stock that were exercisable as of September 19, 2017, or which become exercisable within 60 days from such date.
(9) As reported by The Vanguard Group on Form 13F filed with the SEC on August 24, 2017. As of June 30, 2017, the Vanguard Group has sole dispositive power over 5,808,479 and shared dispositive power over 11,154 shares of common stock, and sole voting authority over 3,593 and shared voting authority over 11,154 shares of common stock.
(10) As reported by BlackRock, Inc. on Form 13F filed with the SEC on August 10, 2017. As of June 30, 2017, BlackRock has sole dispositive power over 6,292,140 and sole voting authority over 6,047,133 shares of common stock.
(11) As reported by Capital World Investors on Form 13F filed with the SEC on August 14, 2017. As of June 30, 2017, Capital World Investors has sole dispositive power and sole voting authority over 4,158,000 shares of common stock.
(12) As reported by First Eagle Investment Management, LLC on Form F filed with the SEC on August 4, 2017. As of June 30, 2017, First Eagle Investment Management, LLC has sole dispositive power over 3,479,449 shares of common stock and sole voting authority over 3,400,182 shares of common stock.
(13) As reported by Van Eck Associates Corporation on Form 13F filed with the SEC on August 11, 2017. As of June 30, 2017, Van Eck Associates Corporation has sole dispositive power and sole voting authority over 3,451,694 shares of common stock.
The following persons hold the executive officer positions at Royal Gold as of September 30, 2017:
Tony Jensen, 55, President, Chief Executive Officer and a Director. See page 8.
Stefan L. Wenger, 44, Chief Financial Officer and Treasurer since August 2007.
Mr. Wenger has over 20 years of experience in the mining and natural resources industries working in various financial roles. Mr. Wenger was Chief Financial Officer from June 2006 to August 2007, and Chief Accounting Officer and Treasurer of the Company from April 2003 until June 2006. Mr. Wenger was a manager with PricewaterhouseCoopers LLP from June 2002 until March 2003. From September 2000 until June 2002, he was a manager with Arthur Andersen LLP. He is a member of the Board of Directors of the Nevada Mining Association. Mr. Wenger holds a Bachelor of Science degree in Business Administration from Colorado State University, completed the General Management Program at the Harvard Business School, and is a certified public accountant. He is a member of the Colorado Society of Certified Public Accountants and the American Institute of Certified Public Accountants.
Karli S. Anderson, 44, Vice President Investor Relations since May 2013.
Ms. Anderson has over 15 years of experience in finance, investor relations and capital markets. She was Senior Director, Investor Relations, from August 2011 through April 2013 and Director, Investor Relations from May 2010 to August 2011 at Newmont Mining Corporation. From February 2008 to May 2010, she served as Director Investor Relations at Coeur d’Alene Mines Corporation. Ms. Anderson served as Director Investor Relations from January 2006 to February 2008 at Evergreen Energy Inc. From 2003 to 2006 she was Director of Strategic Analysis at Policy Studies, Inc. and from 2000 to 2001 she was an Associate at Goldman Sachs Investment Research. Ms. Anderson is currently the Chairman of the Denver Gold Group. Ms. Anderson holds a Master of Business Administration degree with a specialization in finance from the Wharton School at the University of Pennsylvania and a Bachelor of Science degree in Telecommunications Systems from Ohio University.
William H. Heissenbuttel, 52, Vice President Corporate Development since February 2007.
Mr. Heissenbuttel brings more than 25 years of corporate finance experience with 20 of those years in project and corporate finance in the metals and mining industry. From January 2015 to June 2016, he served as Vice President Operations for the Company, and from April 2006 through January 2007, he was Manager Corporate Development for the Company. Mr. Heissenbuttel served as Senior Vice President from 2000 to 2006 and Vice President from 1999 to 2000 at N M Rothschild & Sons (Denver) Inc. From 1994 to 1999, he served as Vice President and then as Group Vice President at ABN AMRO Bank N.V. From 1987 to 1994, he was a Senior Credit Analyst and an Associate at Chemical Bank Manufacturers Hanover. Mr. Heissenbuttel holds a Master of Business Administration degree with a specialization in finance from the University of Chicago and a Bachelor of Arts degree in Political Science and Economics from Northwestern University.
Mark Isto, 57, Vice President Operations since July 2016.
Mr. Isto has 34 years of experience in mining engineering, mine management and project development, most of which included international experience. He previously served as Executive Director, Project Evaluation for RGLD Gold (Canada) Inc., a wholly owned subsidiary of the Company, since January 2015. Prior to that, he served as Vice President Operations for First Nickel Inc. from May 2012 to December 2014, and served as the Vice President and Senior Vice President levels in the Projects Group at Kinross Gold Corp. from October 2006 to May 2012. He served as Mine General Manager of Golden Sunlight Mines, Inc. (Placer Dome America) from January 2004 to October 2006, and he previously held numerous other management positions in Placer Dome’s global operations, including Chief Engineer, Mine Superintendent, Project Director and Senior Advisor over a nearly 25 year career. Mr. Isto holds a Bachelor of Science degree in Mining Engineering from Montana College of Mineral Science and Technology, as well as a Master of Business Administration degree in Business Administration from the University of Nevada — Reno.
Bruce C. Kirchhoff, 58, Vice President, General Counsel since February 2007 and Secretary since July 2013.
Mr. Kirchhoff has over 30 years of experience representing hardrock, industrial minerals, mineral exploration and development companies. From 2004 through 2007, Mr. Kirchhoff was a partner with the law firm Carver Kirchhoff Schwarz McNab & Bailey, LLC. From January to December 2003, Mr. Kirchhoff was a partner with the law firm Carver & Kirchhoff, LLC, and from April 1996 through December 2002, Mr. Kirchhoff was a partner in the law firm Alfers & Carver, LLC. Prior to private practice, Mr. Kirchhoff was a senior attorney with Cyprus Amax Minerals Company from 1986 through 1996. Mr. Kirchhoff holds a J.D. from the University of Denver, a Master of Science in Mineral Economics from the Colorado School of Mines, and a Bachelor of Arts degree in Anthropology from Colorado College.
Our Board recommends a vote FOR each director nominee |
The Company’sOur Board of Directors consists of seven directors divided into three classes of Directors, with eachclasses. Each class of Directors servingserves for a staggered three-year term andterm. The Class III directors elected at our 2020 annual meeting will serve until our 2023 annual meeting or until their successors are duly elected and qualified. The Company’squalified or their earlier death or resignation. Our nominees for these Class III directorships are Fabiana Chubbs, Kevin McArthur, and Sybil Veenman. In September 2020, current Class I Directors are Messrs. JensenIII director, Christopher Thompson, notified us of his intention not to stand for reelection to our Board at the annual meeting and Sokalsky;to retire from the Class II Directors are Messrs. Hayes and Vance; and the Class III Directors areBoard on that date. After a thorough search process, our Board has nominated Ms. Veenman and Messrs. Haase, McArthur and Thompson.
As previously disclosed, Mr. Haase is not standingChubbs to stand for re-electionelection to the Board at the Annual Meeting.annual meeting as a new director to replace Mr. Haase’s decision notThompson. Mr. McArthur and Ms. Veenman are currently serving on our Board and were most recently elected by stockholders at our 2017 annual meeting. Each nominee was nominated by our Board based on the recommendation of the CNG Committee. In making these nominations, our Board and CNG Committee considered each nominee’s experiences, qualifications, and skills as described below. Each nominee has consented to stand for re-election was notserve as a resultdirector if elected. We have no reason to believe that any of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. The Board of Directors does not immediately plan to fill Mr. Haase’s board vacancy following the Annual Meeting.
If the proxy is properly completed and received in time for the Annual Meeting, and if the proxy does not indicate otherwise, the represented sharesnominees will be voted “FOR” Kevin C. McArthur, Christopher M.T. Thompson and Sybil E. Veenman. If any nomineeunable or unwilling for election as a Class III Director should refuse or be unablegood cause to serve (an eventif elected. However, if that is not anticipated), the proxy willoccurs, proxies may be voted for another person nominated as a substitute nominee who is designated by the Board or the Board may reduce the number of Directors. Each Class III Director elected shall serve until the 2020 Annual Meeting, or until his or her successor is elected and qualified.
directors.
VOTE REQUIRED FOR APPROVAL
The Company’s Amended and Restated Bylaws (“Bylaws”) require that each DirectorEach director must be elected by the majority of votes cast at a meeting at which a quorum is present with respect to such Director in uncontested elections.present. This means that the number of shares voted “FOR”for a Director nominee must exceed the votes cast “AGAINST” that Director nominee. In a contested election (where the number of nominees exceedsshares voted against the number of Directors to be elected), the standard for election of Directors would be a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of Directors. This year’s election is expected to be an uncontested election, and the majority vote standard will apply. If anominee. Each nominee who is currently serving as a Director is not elected at the Annual Meeting, Delaware law provides that the Director would continue to serve on the Board ashas tendered to the Board a “holdover Director.” Under the Company’s Bylaws, each Director nominee who is serving as a Director has submitted a conditionalcontingent, irrevocable resignation that becomeswill become effective only if such Director is not electedthe nominee fails to receive the required majority vote and the Board accepts the resignation. In that situation,If a nominee who is currently serving on the Board does not receive a majority of the votes cast, the CNG Committee wouldwill make a recommendation to the Board of Directors on whether to accept or reject the resignation or whether to takesome other action.action should be taken. The Board of Directors will act, ontaking into account the recommendation of the CNG Committee’s recommendationCommittee, and publicly disclose its decision and the rationale behind itits decision within 90 days fromafter the date of the certification of the election results. Absent a determination by the Board that it is in the best interest of the Company for a Director who fails to be elected to remain on the Board, the Board will accept the resignation. The Director who tenders his or her resignationdirector at issue will not participate in the discussion or decision of the BoardBoard.
14 ROYAL GOLD, INC.
Table of Directors. IfContents
Proposal 1
A BALANCED BOARD
An effective board consists of individuals with a nominee who was not already serving asdiverse set of skills and experience that aligns with our business strategy. Each director contributes a Director failsdistinct perspective to receivepromote the best interests of Royal Gold and our stakeholders. Our CNG Committee has identified a majoritynumber of votes cast with respect to his or her election at the Annual Meeting, Delaware law providessubstantive areas of expertise that the nominee does not serve on the Board as a “holdover Director.” Eachwhole should represent. The following table describes these core competencies:
Audit Committee Financial Expert | All members of the AF Committee are audit committee financial experts. These directors understand, advise on, and oversee our capital structure, financing and investing activities, financial reporting, and internal controls. | |||
Board Service at Other Public Companies | Board service at other public companies provides additional understanding of corporate governance practices and trends, board management, oversight of senior management, and succession planning. | |||
Business Development and Marketing | Prior responsibility for growth and strategic decision making is critical to the oversight of our business, including the development and assessment of our core business strategy, planning, and marketing. | |||
CEO or CFO Experience | Experience serving as a CEO, CFO, or other C-suite executive, and the hands-on leadership experience that comes with it, is valuable in core management areas such as preparation and adherence to budgets, strategic planning, financial reporting, compliance, and risk management. | |||
Corporate Governance Experience | A deep understanding of a board’s duties and responsibilities to all stakeholders enhances board effectiveness and ensures independent oversight that is aligned with stockholder interests. | |||
Finance Experience | A strong understanding of accounting and finance is important for ensuring the integrity of our financial reporting, critically evaluating our performance, and ensuring our ability to grow our stream and royalty portfolio. | |||
Geology and Mining Engineering | Knowledge and experience in geology and mining engineering is important to our business model as a company that evaluates, acquires, and manages precious metal stream and royalty interests. | |||
Industry and Mining Experience | Experience in mine operations, mine finance, and the mining industry gives valuable insight into the operational and financial issues facing our existing and potential future stream and royalty counterparties. | |||
Industry Association Participation | Many of our directors are or have been active members of mining industry associations such as the World Gold Council, National Mining Association, and Nevada Mining Association, giving them exposure to trends in the industry and continued visibility to decision-makers at global mining companies. | |||
International Business Experience | Our directors have served as executives in global mining organizations, which provides them with unique insight into growing a business globally. | |||
Leadership Experience | Skills developed from senior positions in numerous organizations leading operational, technical, business development, accounting, finance, legal, and other teams are passed on to our management team to foster talent growth among the current and next generation of our leadership. | |||
Legal and Compliance Experience | Our Board benefits from directors who possess a broad range of legal skills, including with respect to regulatory matters, negotiation, corporate compliance, litigation, and dispute resolution. | |||
Reputation in the Industry | Our directors are well known in the industry and held in high regard by their peers. | |||
Risk Management | Our directors can support management in recognizing, managing, and mitigating key risks such as cybersecurity, regulatory compliance, competition, finance and financial reporting, brand integrity, talent development, and succession planning. | |||
ESG Experience | Experience with sound environmental, social, and governance (“ESG”) practices helps to ensure that our business model is designed to be sustainable into the future. |
2020 PROXY STATEMENT 15
Table of the Class III Director nominees are currently serving on the Board of Directors.
Information concerning the nominees for election as Directors is set forth below under “Board of Directors.”
Contents
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”Proposal 1
EACH OF THE CLASS III BOARD QUALITIES
INDEPENDENCE | AVERAGE DIRECTOR TENURE | AVERAGE DIRECTOR SERVICE |
All directors other than our CEO are independent | 6 years average tenure The average tenure of our continuing independent directors is 6 years | Our independent directors serve on an average of one outside public company board |
BOARD BIOGRAPHIES
Below is biographical information about our director nominees and continuing directors. Director qualifications and experience are also summarized on page 9.
DIRECTOR NOMINEES
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Below, we provide the names, position with the Company, periods of service and experience of the Company’s Directors. The persons who are nominated for election as Class III Directors at the Annual Meeting are indicated with an asterisk *. Each Director brings a strong and unique background and skillset to the Board including, among others, public company board service, long histories of significant leadership positions, and industry experience in the areas of mining, operations, accounting, administration, finance, business development and marketing, law, international business and risk management. The qualifications and experience of our Directors are summarized on page ii.
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New Class III Director Independent If Elected, Audit and Audit Committee | ||||
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Leadership Experience Executive experience at an international mining organization | ||||
International Mining Experience Previous executive at a Canadian gold mining company with international mining operations | ||||
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16 ROYAL GOLD, INC.
CURRENT BOARD AND/OR EXECUTIVE POSITIONSProposal 1
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PREVIOUS BOARD AND/OR EXECUTIVE POSITIONSKEVIN McARTHUR, 65
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| Mr. McArthur has served as non-executive chairman of Boart Longyear Limited (ASX: BLY) since September 2019. Mr. McArthur has over 40 years of progressive experience focused on mining. Mr. McArthur retired from Tahoe Resources |
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Class III Director Director since 2014 Independent Compensation, Nominating, and Governance Committee Member | QUALIFICATIONS AND EXPERIENCE | |||||
Board Service, Compensation, and Corporate Governance Experience Chairman of Boart Longyear Limited, past director of Pan American Silver Corp, Tahoe Resources, Goldcorp, Glamis Gold, |
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Bachelor of Science degree in Mining Engineering from the University of Nevada
QUALIFICATIONS AND EXPERIENCE
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Leadership Service | Extensive experience as | |||
Industry, Mining, and | More than | |||
Geology and Mining Engineering | ||||
Operations Many years of direct operations experience in Nevada, Alaska, and California. Includes 9 years in a variety of mine operations positions and 10 years as mine general manager | ||||
Business Development and Marketing | Extensive experience in corporate development for Tahoe, Goldcorp, and Glamis |
2020 PROXY STATEMENT 17
Proposal 1
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Ms. Veenman has served as a director of Major Drilling Group International Inc. (TSX: MDI) since December 2019, NexGen Energy Ltd. (NYSE: NXE) since August 2018, and IAMGOLD Corporation (NYSE: IAG) since December 2015. She also served as a director of Noront Resources Ltd. (TSX-V: NOT) from August 2015 to February 2020. Ms. Veenman has over 25 years of progressive experience in the mining industry. Most recently, she served in various officer positions at Barrick Gold Corporation from 1994 to 2014, including Senior Vice President and General Counsel and a member of the executive leadership team from 2010 to 2014. | ||||
Class III Director Director since 2017 Independent Compensation, Nominating, and Governance Committee Member | QUALIFICATIONS AND EXPERIENCE | |||
Board Service Independent |
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Corporate Governance Member of the Audit and Finance Committee | ||||
Industry, Mining, and International Experience More than 20 years of experience with international gold mining company with large portfolio of operating mines, development projects, and exploration properties across five continents | ||||
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Legal, Risk, and Compliance Previous General Counsel of Barrick, heading global legal department with responsibility for managing overall legal affairs of the company including legal support of mergers and acquisitions and debt and equity financings, management of litigation, and development and oversight of key compliance policies and programs and joint oversight responsibility for enterprise risk management, security and asset protection, and community, health, environment, safety, and security audit functions; and engaged in private practice with a focus on corporate/commercial, mergers and acquisitions, and securities | ||||
Reputation in the Industry Over 20 years of experience with major international mining company |
18 ROYAL GOLD, INC.
Proposal 1
CONTINUING DIRECTORS
WILLIAM HAYES, 75 | |||
CURRENT BOARD AND/OR EXECUTIVE POSITIONS
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Board Service Previously served as a director and member of the Safety and Sustainability Committee at Antofagasta PLC | ||
Leadership, Finance, and International Business Experience Audit committee financial expert as determined by our Board, prior service as Executive Vice President for USA and Latin America of Placer Dome, Executive Vice President for Project Development and Corporate Affairs of Placer Dome, Vice President and Treasurer of Placer Dome, and Regional Treasurer and Controller of Exxon Minerals | ||
Industry Association Participation Previously served as President of the Mining Council in Chile and President of the Gold Institute in Washington, D.C. | ||
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Compensation and Corporate Governance Member of Compensation Committee and Nominating and Governance Committee of Antofagasta PLC |
2020 PROXY STATEMENT 19
Proposal 1
RONALD VANCE, 68 | ||||
Mr. Vance served as Chairman of the Board of Southern Peaks Mining L.P. in 2018. Mr. Vance has over 40 years of experience in mining and corporate development. Mr. Vance retired from Teck Resources where he served as Senior Vice President, Corporate Development from 2006 to 2014. Prior to joining Teck Resources, Mr. Vance worked as Managing Director of Rothschild (Denver) Inc. from 1991 to 2000 and as Managing Director/Senior Advisor of Rothschild Inc. from 2000 to 2005. | ||||
Class II Director Director since 2013 Independent Chairman of our Compensation, Nominating, and Governance Committee | QUALIFICATIONS AND EXPERIENCE | |||
Finance and International Business Experience Expertise in capital markets, finance, mergers, and acquisitions in the mining industry, expertise in managing the generation, negotiation, and execution of complex, large-scale transactions, experience building strategic commercial relationships with a broad range of international companies and developing and executing corporate and structured financing arrangements | ||||
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Proposal 1
WILLIAM HEISSENBUTTEL, 55 | |||
Class I Director President and Chief Director since 2020 Not Independent | Mr. Heissenbuttel has more than 30 years of corporate finance experience, including 25 years in project and corporate finance in the metals and mining industry. Mr. Heissenbuttel was appointed our President and Chief Executive Officer and a Class I director, effective January 2, 2020. Previously, he served as our Chief Financial Officer and Vice President Strategy from June 2018 to January 2020, Vice President Corporate Development from 2007 to June 2018, Vice President Operations from January 2015 to June 2016, and Manager Corporate Development from 2006 to 2007. Prior to joining Royal Gold, Mr. Heissenbuttel served as Senior Vice President from 2000 to 2006 and Vice President from 1999 to 2000 at N M Rothschild & Sons (Denver) Inc. From 1994 to 1999, he served as Vice President and then as Group Vice President at ABN AMRO Bank N.V. From 1987 to 1994, he was a Senior Credit Analyst and an Associate at Chemical Bank Manufacturers Hanover. Mr. Heissenbuttel holds a Master of Business Administration degree from the University of Chicago and a Bachelor of Arts degree from Northwestern University. | ||
QUALIFICATIONS AND EXPERIENCE | |||
Leadership Experience Current corporate and executive experience as our President and CEO | |||
Finance Experience Background as a corporate and project finance lender and previously served as our CFO | |||
Industry, Mining, and International Business Experience 25 years of experience in project and corporate finance in metals and mining industries | |||
Business Development and Marketing | |||
Compensation and Corporate Governance Overall responsibility for our compensation program |
2020 PROXY STATEMENT 21
Proposal 1
JAMIE SOKALSKY, 63 | |||
Mr. Sokalsky has served as Chairman of Probe Metals, Inc. (TSX-V: PRB) since 2016 and as a director of Agnico-Eagle Mines Ltd. (NYSE: AEM) since 2015. Mr. Sokalsky has over 25 years of progressive experience in the mining industry, starting in 1993 as Treasurer and Vice President of Barrick Gold Corporation, where he served as Chief Financial Officer from 1999 to 2012 and CEO and President and as a director from 2012 to 2014. From 2014 to 2016, Mr. Sokalsky served as Chairman of the Board of Probe Mines Limited and from 2015 to 2018 as a director of Pengrowth Energy Corporation (NYSE: PGH). | |||
Class I Director Director since 2015 Independent Audit and Finance Audit Committee | QUALIFICATIONS AND EXPERIENCE | ||
Board Service and Compensation and Corporate Governance Experience Director and member of the Governance Committee of Agnico-Eagle and Chairman of the Board and Compensation Committee and Nominating and Governance Committee of Probe Metals, past director of Pengrowth Energy Corporation and World Gold Council, past member of the International Council on Mining and | |||
Leadership Experience | Over 30 years of senior executive experience in finance, capital markets, corporate strategy, project development, acquisitions, and divestitures, including extensive board, CEO, and CFO experience with international mining organizations and board experience serving as a director for | ||
International Mining Experience | More than 20 | ||
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BOARD OF DIRECTORS COMPOSITION AND PRACTICES
Meetings and Attendance
During the fiscal year ended June 30, 2017 (“fiscal year 2017”), theOur Board of Directors held four regular meetings, two of which included executive sessions of the independent Directors, four special meetings and took action three times by unanimous written consent. Each Director attended, in person or by telephone, at least 75% of the aggregate number of meetings of the Board of Directors and of the Committee(s) of the Board of Directors (each, a “Committee”) on which he or she served. It is the Company’s policy that each Director attends each Annual Meeting, and all Directors attended last year’s Annual Meeting.
Independence of Directors
The Board of Directorshas determined that each Director, except forof our directors, other than Mr. Jensen, whoHeissenbuttel, is independent under the President and CEOrules of the Company, is “independent” underSecurities and Exchange Commission (“SEC”) and the listing standards of the NASDAQNasdaq Stock Exchange (“NASDAQ”Nasdaq”). TheOur Board of Directorshas also determined that the Directors designated as “independent” have nonone of our independent directors has any relationship with the Companyus that would interfere with the exercise of their independent judgment in carrying out thetheir responsibilities ofas a Director.
director.
Board StructureTHE BOARD’S ROLE AND RESPONSIBILITIES
Our Board is elected by stockholders to oversee management and assure that stockholders’ long-term interests are being served. A significant portion of our Board’s oversight responsibility is carried out through its standing committees: the AF Committee and the CNG Committee. All committee members are independent under Nasdaq and SEC rules. Each committee meets regularly throughout the year, receives reports from senior management, reports its actions to the Board, and evaluates its performance annually. Each committee is authorized to retain outside advisors.
BOARD OVERSIGHT OF RISK MANAGEMENT
Our Board is responsible for overseeing risk management, with a focus on the most significant known and potential risks confronting Royal Gold, including any changes to the business to address these risks. We have established an enterprise risk management program that is designed to identify, define, manage, and when appropriate mitigate risks confronting Royal Gold. Management is responsible for supervising day-to-day risk management and regularly reports to the Board and its committees on risk management matters. The Board reviews the adequacy of Directorsthe enterprise risk management program on an annual basis and recommends appropriate changes to the program to management. Each of our directors has experience with risk management at the enterprise level.
BOARD OF DIRECTORS | |
Our Board oversees enterprise-level risk, including risks associated with strategy, operations, and ESG | |
AUDIT AND FINANCE COMMITTEE ●Integrity of financial statements ●Internal controls ●Disclosure controls and procedures ●Accounting compliance ●Cybersecurity ●Compliance program ●Capital structure and allocation | COMPENSATION, NOMINATING, AND GOVERNANCE COMMITTEE ●Regulatory ●Board organization, membership, and structure ●Governance ●Diversity ●Succession planning ●Management development ●Executive compensation and retention |
MANAGEMENT | |
Our management administers, reviews, and updates our enterprise risk management program and provides quarterly reviews to our Board |
2020 PROXY STATEMENT 23
Proposal 1
PROCESS FOR SELECTING DIRECTORS
1 | Succession Planning | The CNG Committee considers the current and long-term needs of our business and seeks director candidates based on emerging needs, current Board structure, tenure, skills, diversity, and experience. | |
2 | Identify Candidates | The CNG Committee identifies a pool of qualified and diverse director candidates through a robust search process, which may include an independent search firm, and assesses candidates’ skills, experience, and background. The CNG Committee considers the following qualifications, among others: ●Experience in mining and mine finance ●Diversity ●Independence ●Integrity and perspective ●Broad business judgment and leadership skills ●Areas of expertise ●Personal qualities and reputation in the business community ●Ability and willingness to commit adequate time to Board and committee duties We recognize and value the benefits that a talented and diverse Board and workforce can bring to the company and our stakeholders and employees. The CNG Committee includes diverse candidates in any director search in accordance with its charter and our Diversity Policy. Our CNG Committee may work with an external search firm to identify a diverse set of candidates. With respect to Ms. Chubbs’ nomination, the CNG Committee worked with Russell Reynolds Associates. The CNG Committee will consider director candidates recommended by stockholders using the same criteria outlined above. Stockholders should submit their recommendations in writing to our Corporate Secretary in accordance with the advance notice and other provisions of our Bylaws. | |
3 | In-depth Review and Interview Process | Director candidates are interviewed by our Chairman, President and CEO, and members of the CNG Committee. | |
4 | Decision and Nomination | The CNG Committee recommends, and the full Board approves, nominees who are best qualified to serve the interests of Royal Gold and its stockholders. | |
5 | Election | Director nominees are presented to stockholders for election to a three-year term. | |
Results | 6 New Independent Director Nominees – Our Board has nominated six new independent directors in the past seven years with wide and diverse backgrounds and experiences. Stockholders elected five of these nominees at previous annual meetings, and Ms. Chubbs is standing for election at this annual meeting. New Management Director – After a thorough search process, our Board appointed Mr. Heissenbuttel to succeed Mr. Jensen as our President and CEO and a Class I director with a term ending in November 2021. |
24 ROYAL GOLD, INC.
Proposal 1
CONDITIONAL RESIGNATION POLICIES
MAJORITY VOTE
Under our Bylaws and Governance Guidelines, upon election or appointment to our Board and promptly following each annual meeting at which a director is re-elected, each director must submit a contingent, irrevocable resignation relating to their directorship. The resignation will become effective only if the director fails to receive the required majority vote at the next annual meeting where the director is standing for election and the Board accepts the resignation. If a nominee does not receive a majority of the votes cast, the CNG Committee will make a recommendation to the Board whether to accept or reject the resignation or whether some other action should be taken.
AGE
We do not impose a mandatory retirement age for directors. However, under our Board’s Governance Guidelines, a director who has reached the age of 72 must submit an annual letter of resignation. The resignation will become effective only if accepted by a majority of the disinterested directors. During fiscal year 2020, each of Messrs. Hayes and Thompson, having reached the age of 72, tendered a conditional resignation letter. Taking into account the recommendation of the CNG Committee and having considered Messrs. Hayes’s and Thompson’s skills, experience, areas of expertise, leadership, and other attributes, the disinterested directors did not accept their resignations.
We do not impose term limits, as we believe that term limits can result in a potential loss of contributions by directors who have developed increasing insight into the company and our operations.
JOB CHANGE
Any director who retires from their job or substantially changes their principal occupation or business association must submit a letter of resignation in accordance with our Board’s Governance Guidelines. The resignation will become effective only if accepted by a majority of the disinterested directors.
MANAGEMENT SUCCESSION PLANNING
We are committed to ensuring that we are continually developing leadership talent within the organization, and our Board is actively engaged in talent management. The Board regularly reviews and discusses our leadership pipeline and succession plans with a focus on senior executive positions. High-potential leaders are given exposure and visibility to directors through formal presentations and informal events.
As a result of this approach, our Board was well positioned to execute on its recent succession plan, including the promotions of Mr. Heissenbuttel to President and CEO, Mr. Libner to CFO and Treasurer, and Mr. Shefman to Vice President and General Counsel. Our Board had long planned for the eventual retirement of our former President and CEO, Tony Jensen. After Mr. Jensen announced in mid-2019 his intent to retire, our CNG Committee worked with an external search firm, Russell Reynolds Associates, to conduct a search for his successor from a diverse set of internal and external candidates. The CNG Committee ultimately recommended, and our Board approved, the appointment of Mr. Heissenbuttel based on his experience and qualifications and the perceived needs of our company.
2020 PROXY STATEMENT 25
Proposal 1
COMMITMENT TO SOCIAL RESPONSIBILITY
We believe responsible mining and business practices create sustainable value for all stakeholders. We are committed to good governance, environmental stewardship, human rights, fair labor practices, and employee wellbeing. We support and respect the cultures and values of the host countries and the indigenous and local communities where we invest.
As a passive investor in mining projects, we do not have direct influence or control over operators or operations at the properties in which we invest. In addition, with fewer than 30 employees across four offices in three countries, our direct environmental and social footprint is modest. However, as a key financing alternative for mining projects throughout the world, we believe in instilling the principle of social responsibility and environmental stewardship in our business interactions when we can, as summarized below:
ESG Policy | Our Environmental, Social Responsibility, and Governance Policy sets forth our core commitment to furthering responsible and sustainable mineral development as a means to create long-term value for our stakeholders. | |
World Gold Council Responsible Gold Mining Principles | We are a member of the World Gold Council and endorse its Responsible Gold Mining Principles, which promote sustainable gold mining. | |
International Council on Metal & Mining 10 Principles | We support the International Council on Metal & Mining 10 Principles for sustainable development across the mining and metals industries. | |
London Bullion Market Association’s Responsible Sourcing Program | We support the London Bullion Market Association Responsible Sourcing program designed to combat money laundering, terrorist financing, and human rights abuses in global metals markets. | |
Operator Engagement | Many of the operators we work with have endorsed at least one international ESG charter, such as the World Gold Council Responsible Gold Mining Principles, International Council on Metal & Mining 10 Principles, United Nations Global Compact, Global Reporting Institute Standards, IFC Performance Standards on Social and Environmental Sustainability, or Extractive Industries Transparency Initiative. | |
New Investments | We seek new stream and royalty investment opportunities with responsible operators that maintain appropriate focus on ESG risks at their operations. | |
Due Diligence | We conduct considerable due diligence, including review of operators’ commitment to ESG principles, during our review of new investment opportunities. | |
Contractual Safeguards | We seek to mitigate ESG risk to our investments through negotiation of appropriate contractual safeguards when possible. | |
Ongoing Monitoring | We monitor operators’ management of ESG risks on an ongoing basis and, where appropriate, enforce our contractual rights. | |
Host Community Commitment | We actively seek opportunities to advance sustainability initiatives with the goal of allowing communities to thrive during and following mining operations. Notable recent efforts include investing in the construction of a medical clinic in Matarachi, Mexico, funding a scholarship program for residents in the area of the Mulatos mine, contributing funds for social, cultural, educational, and other initiatives in the Tetlin native community, and donating funds to the South Dakota School of Mines and Technology to advance the university’s minerals and energy industries program. Many of our operators also actively and positively impact the communities where they mine. We encourage their efforts and often make our own financial contributions in support of their programs. | |
Human Rights Policy | We are committed to respecting human rights in the jurisdictions where we operate. We will comply with all applicable laws concerning human rights; prohibit the hiring of individuals under the legal age of employment; prohibit all forms of human trafficking and forced labor, including prison labor, indentured labor, bonded labor, and modern forms of slavery; comply with applicable wage, work hours, overtime, and benefits laws; and promote diversity and inclusion, equal opportunity, and intolerance to discrimination and harassment on the basis of race, sex, color, national or social origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression, or any other status protected by applicable law. |
26 ROYAL GOLD, INC.
Proposal 1
Diversity Policy | The success of our business depends heavily on the quality and skills of our people; and the wide array of perspectives and experiences that derive from a diverse Board and workforce enhances creativity, productivity, and overall organizational strength. Our diversity policy is intended to encourage diversity across the entire organization. We are committed to an inclusive work environment where individuals are treated with fairness and respect and are given equal opportunity to develop and advance without regard to age, race, gender, color, religion, national origin, disability, sexual orientation, marital status, military status, or genetic characteristics. | |
Employee Community Service | We believe in giving back at home, supporting the communities where we live and work. Our annual charitable giving is administered by a committee of employees that selects donation targets and recipients in our local communities. Our employees can also take two days of paid leave to serve nonprofit organizations of their choosing. We are proud to partner with leading charities in Denver, Luzern, Toronto, and Vancouver that are actively responding to community needs with respect to medical supplies, homelessness, food security, and elder care. |
STOCKHOLDER ENGAGEMENT
We proactively engage with significant stockholders throughout the year. Our stockholder engagement is focused on dialogue, transparency, and responsiveness. In 2020, we engaged on a variety of topics with most of our largest stockholders that actively manage their portfolios. Topics of engagement included our financial performance, investment portfolio, corporate strategy, competitive environment, capital allocation, and succession planning. Various members of our management team participate in these dialogues at times. Our management team provides quarterly updates to our Board on stockholder engagement and feedback.
COMMUNICATION WITH DIRECTORS
Stockholders and other interested parties who wish to communicate with our Board, including our independent Chairman of the Board, independent and non-management directors as a group, or any other individual director, may send their communication to our Corporate Secretary at Royal Gold, Inc., 1144 15th Street, Suite 2500, Denver, Colorado 80202, or corporatesecretary@royalgold.com. Our Corporate Secretary reviews communications to the Board. Communications relating to accounting, auditing, or fraud are forwarded to the Chairman of our AF Committee, and any other communications addressing a legitimate business issue are forwarded to other members of our Board as appropriate.
Our Board does not have a prescribed policy on whetherregarding separation of the roles of the Chairman and CEO should be separate or combined, but recognizes the value to the Company of having a non-executive Chairman. Mr. Hayes has served as Chairman of the Board since May 2014, as Chairman of the Audit and Finance Committee since November 2013, and as a Director of the Company since 2008.
TheCEO. Our Board believes it is in our best interests to make that determination based on circumstances from time to time. Our Board believes that having an independent, nonexecutive Chairman is currently the most appropriate structure for our company. In the Board’s view, its current leadership structure is appropriate because it effectively allocates authority, responsibility, and oversight between management and the Independent directors. Mr. Hayes has served as our independent Directors.
Chairman since May 2014. If in the future we decide to appoint a non-independent Chair, our Board’s Governance Guidelines state that our independent directors will also appoint a lead independent director.
Board OrientationCOMMITTEES OF THE BOARD
Our Board has two standing committees: Audit and Finance Committee (“AF Committee”) and Compensation, Nominating, and Governance Committee (“CNG Committee”). Each committee is governed by a written charter that is reviewed annually and updated as appropriate to reflect best practices and regulatory or business changes. Each committee also reviews annually its own compliance with its charter. Committee charters are available on our website at www.royalgold.com under “ESG – ESG Document Library.”
The Company conducts2020 PROXY STATEMENT 27
Proposal 1
AUDIT AND FINANCE COMMITTEE
COMMITTEE MEMBERS AND HIGHLIGHTS ●AF Committee held five meetings during fiscal year 2020 ●All members are independent under Nasdaq and SEC rules ●All members are audit committee financial experts as defined under SEC rules ●All members satisfy the Nasdaq financial literacy and sophistication requirements | ||||||
William Hayes, Chairman | Jamie Sokalsky | Christopher Thompson* |
* | In September 2020, Mr. Thompson notified us of his intention not to stand for reelection to our Board at the annual meeting and to retire from the Board on that date. If Ms. Chubbs is elected as a Class III director at the annual meeting, the Board expects to appoint her as a member of the AF Committee to replace with Mr. Thompson. |
KEY RESPONSIBILITIES
● | Oversees the integrity of our financial statements |
● | Oversees compliance with legal and regulatory requirements and corporate policies |
● | Appoints, retains, and oversees the independent registered public accountant and evaluates its qualifications, performance, and independence |
● | Approves auditing services and any non-audit services to be rendered by the independent registered public accountant |
● | Monitors the internal audit process and critical accounting policies |
● | Reviews the adequacy of financial and operating controls |
● | Oversees our financial strategy, capital structure, and liquidity position |
● | Oversees our cybersecurity program |
● | Reviews and approves related-person transactions |
COMPENSATION, NOMINATING, AND GOVERNANCE COMMITTEE
COMMITTEE MEMBERS AND HIGHLIGHTS ●CNG Committee held five meetings during fiscal year 2020 ●All members are independent under Nasdaq and SEC rules, including the enhanced independence rules applicable to compensation committee members | ||||||
Ronald Vance, Chairman | Kevin McArthur | Sybil Veenman |
KEY RESPONSIBILITIES
● | Oversees our compensation policies, plans, and programs |
● | Reviews and determines the compensation to be paid to executives |
● | Recommends to the Board compensation to be paid to our nonemployee directors |
● | Administers our equity incentive plan |
● | Oversees the preparation of our compensation disclosures |
● | Identifies and recommends to the Board director nominees |
● | Has authority to retain an independent compensation consultant |
● | Advises our Board on corporate governance matters |
● | Reviews our corporate governance policies and guidelines |
● | Reviews our diversity practices |
28 ROYAL GOLD, INC.
Proposal 1
BOARD PRACTICES, PROCESSES, AND POLICIES
MEETINGS AND ATTENDANCE
Our Board held six meetings during fiscal year 2020. Each director attended 100% of the meetings of the Board and the committee on which he or she served. It is our policy that directors attend our annual stockholders meeting, and all of our directors attended last year’s annual stockholders meeting.
EXECUTIVE SESSIONS
Our independent and nonemployee directors meet regularly in executive sessions. Each of the AF Committee and CNG Committee also meets regularly in executive sessions. Executive sessions are generally scheduled immediately before or after each regular meeting.
BOARD AND COMMITTEE ASSESSMENTS
Our Board considers a thorough and constructive assessment process to be critical in properly assessing Board orientationand committee effectiveness. Each year, the CNG Committee oversees assessments of the Board and each committee concerning their structure, role, responsibilities, and performance.
1 | Annual Review | ||
✓The CNG Committee oversees an annual self-assessment of Board and committee performance and effectiveness. ✓The assessment is conducted through an independent web-based platform, with all responses submitted confidentially to encourage full and candid responses. | |||
2 | Board Assessment | ||
✓Our Board’s self-assessment focuses on numerous aspects of corporate governance and performance of the Board’s duties and responsibilities, including, for example, the Board’s culture and interactions with management; the structure, size, competencies, and experience of the Board and its committees; the Board’s effectiveness in guiding strategic direction; succession planning; and the adequacy of agendas, time allotments, and information provided to directors. | |||
3 | Committee Assessment | ||
✓Simultaneously with the Board’s self-assessment process, each committee member also completes a confidential assessment of the performance and effectiveness of the committee on which they serve. |
Outcome ✓Our Board has determined that the Board and its committees operated effectively during fiscal year 2020. Follow-Up ✓The CNG Committee uses the assessment results, and in particular the assessment of directors’ skills and qualifications, when recommending director nominees to stockholders. ✓Policies and practices of the Board may be updated as a result of review and evaluation of assessment results. Director suggestions for improvements to the questionnaires and assessment process are incorporated on an ongoing basis. |
2020 PROXY STATEMENT 29
Proposal 1
DIRECTOR ON-BOARDING AND CONTINUING EDUCATION
We conduct a comprehensive on-boarding program to efficiently introduce newwith incoming directors to the Company, itsintroduce them to Royal Gold, our management, business model, and corporate strategy, financial condition, corporate organization, and constituent documents,governance practices.
Directors receive appropriate information to assist them in the performance of their duties as directors and itscommittee members, as applicable, including quarterly updates concerning legal, regulatory, accounting, tax, finance, compliance, and governance policiesdevelopments and practices.
trends. We reimburse directors for attendance at external director education programs, membership to the National Association of Corporate Directors, and subscriptions to publications concerning governance and other relevant matters.
Board Composition and QualificationBOARD GOVERNANCE GUIDELINES
Every Director of the CompanyOur Board has held significant leadership positions and has substantial experience in the international mining business, corporate governance and risk management, in additionadopted Governance Guidelines as a general framework to other qualifications and expertise responsive to the needs of the Company.
Board Self-Assessments
The Board and Committees conduct annual self-assessments to evaluate the qualifications, experience, skills and balance ofassist the Board in carrying out its responsibilities. The Governance Guidelines are reviewed annually and each Committee,updated as appropriate for evolving best practices and to ensure that the Board and each Committee is working effectively.
Board Oversight of Risk Management
The Board of Directors has overall responsibility for risk oversight with a focus on the most significant risks facing the Company. The Board of Directors relies upon the President and CEO and other members of management to supervise day-to-day risk management. The President and CEO reports directly to the Board and certain Board Committees on such matters, as appropriate.
The Board of Directors delegates certain oversight responsibilities to its Committees. For example, while the primary responsibility for financial and other reporting, internal controls, compliance with laws and regulations, and ethics restsregulatory developments. Compliance with the management of the Company, the Audit and Finance Committee provides risk oversight with respect to the Company’s financial statements, the Company’s compliance with certain legal and regulatory requirements and corporate policies and controls, and the independent auditor’s selection, retention, qualifications, objectivity and independence. Similarly, the Compensation, Nominating and Governance Committee provides risk oversight with respect to the Company’s compensation program, governance structure and processes, the Company’s compliance with certain legal and regulatory requirements, and succession planning.
Guidelines is also reviewed annually. The Board also oversees a robust enterprise risk management program to identify, define, manage and, when necessary, mitigate risks confronting the Company. The enterprise risk management program is administered, reviewed and updated by management on an ongoing basis, and reviewed by the Board of Directors quarterly.
Audit and Finance Committee (“AF Committee”)
The AF Committee is a standing committee of the Board of Directors, consisting of the following persons:
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The AF Committee held seven meetings during fiscal year 2017. The Audit and Finance Committee Charter isGovernance Guidelines are available on the Company’sour website at www.royalgold.com under “Governance — Committees.“ESG – ESG Document Library.”
CODE OF BUSINESS CONDUCT AND ETHICS
The AF Committee assists the BoardOur Code of Directors in its oversightBusiness Conduct and Ethics applies to all of the integrity of the Company’sour employees, including our principal executive officer, principal financial statements and compliance with legal and regulatory requirements and corporate policies and controls. The AF Committee has the direct responsibility to retain and terminate the Company’s independent registered public accountants, review reports of the independent registered public accountants, approve all auditing services and related feesofficer, principal accounting officer and the termsmembers of our Board. A copy of our Code of Business Conduct and Ethics is available on our website at www.royalgold.com under “ESG – ESG Document Library.” We intend to disclose any agreements,changes to or waivers from the Code of Business Conduct and to pre-approve any non-audit servicesEthics that are required to be rendereddisclosed by the Company’s independent registered public accountants. The AF Committee monitors the effectiveness of the audit process and the Company’s financial reporting, monitors the internal audit process and critical accounting policies, reviews the adequacy of financial and operating controls and evaluates the effectiveness of the AF Committee. posting this information on our website.
RELATED-PERSON TRANSACTIONS
The AF Committee is responsible for confirming the independence and objectivity of the independent registered public accountants. The AF Committee is also responsible for preparation of the AF Committee report for inclusion in the Company’s Proxy Statement.
The AF Committee reviews and provides oversight of the Company’s financial strategy, capital structure and liquidity position, including review and oversight ofreviewing transactions involving public offerings of the Company’s equityRoyal Gold and debt securities, transactions involving material debt obligations, dividend policies and practices, liquidity and cash flow position, tax strategy and tax compliance, and investment policies and strategy. The AF Committee also reviews and provides oversight of transactions and expenditures specifically delegated to it by the Board of Directors and performs such other financial oversight responsibilities as the Board of Directors may request.
In addition, the AF Committee reviews and approves all related-party business transactions in which any of the Company’s officers, Directors or nominees for Director have an interest and that may be required to be reported in the Company’s periodic reports, and reports to the full Board of Directors on such matters.
Compensation, Nominating and Governance Committee (“CNG Committee”)
The CNG Committee is a standing committee of the Board of Directors consisting of the following persons:
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The CNG Committee held seven meetings during fiscal year 2017 and took action by unanimous written consent once. The CNG Committee Charter is available on the Company’s web site at www.royalgold.com under “Governance — Committees.”
The CNG Committee oversees the Company’s compensation policies, plans and programs, reviews and determines the compensation to be paid to executive officers, and recommends compensation to be paid to the Company’s Directors. The full Board reviews and considers the CNG Committee’s director compensation recommendations prior to making final determinations. The CNG Committee also administers and implements the Company’s incentive compensation and equity-based plans. The CNG Committee is responsible for overseeing preparation of the Compensation Discussion and Analysis and for preparing the report on executive compensation for public disclosure in the Company’s Proxy Statement.
The CNG Committee may form subcommittees and delegate to its subcommittees such power and authority as it deems necessary or advisable. The CNG Committee has no current intention to delegate any of its authority with respect to determining executive officer compensation to any subcommittee. The CNG Committee does not delegate its responsibilities with respect to executive compensation to any executive officer of the Company.
In addition to compensation matters, the CNG Committee also identifies or reviews individuals proposed to become members of the Board of Directors and recommends Director nominees. In selecting Director nominees, the CNG Committee assesses the nominee’s independence and considers his or her experience and areas of expertise, including experience in the mining industry, diversity, integrity, perspective, broad business judgment and leadership, personal qualities and reputation in the business community, and ability and willingness to commit adequate time to Board and Committee matters, all in the context of the perceived needs of the Board of Directors at that time. The Company does not have a stand-alone policy regarding the consideration of diversity in selecting Director nominees. However, the CNG Committee considers a wide range of criteria in nominee selection including diversity, social, technical, political, management, legal, governance, finance and broader business experience as well as other areas of expertise. These matters are considered through discussions at CNG Committee meetings.
The CNG Committee will consider Director candidates recommended by stockholders using the same criteria outlined above, provided such written recommendations are submitted to the Vice President, General Counsel and Secretary of the Company in accordance with the advance notice and other provisions of the Company’s Bylaws.
The CNG Committee also advises the Board of Directors regularly on various corporate governance matters and principles, including regulatory actions impacting the Company. The CNG Committee reviews the content of and compliance with the Company’s Board of Directors Governance Guidelines annually, and assesses compliance with corporate governance guidelines and requirements established by the SEC, NASDAQ and applicable laws and regulations.
Compensation Committee Interlocks and Insider Participation
No member of the CNG Committee, which consists of M. Craig Haase, C. Kevin McArthur, Ronald J. Vance and Sybil E. Veenman, is or has been an officer or employee of the Company. No interlocking relationship existed between our Board of Directors or our CNG Committee and the Board of Directors or compensation committee of any other company during fiscal year 2017.
Succession Planning
One of the primary responsibilities of the Board and management is to ensure that the Company has qualified leadership possessing the appropriate knowledge, experience and skills to successfully execute its business and strategic plans. Management is actively engaged in leadership development, including regular discussions concerning the development and retention of critical talent to promote future success, and the creation of opportunities for individual personal and professional development. In addition, the Board regularly reviews and discusses succession plans for both the Board and senior executives, including the President and CEO, during Board Committee meetings and executive sessions of the full Board. Directors become familiar with potential successors for senior executive positions through various means, including Board meeting presentations and less formal interactions throughout the course of the year.
The Board’s practice is to prepare for planned or unplanned changes in leadership in order to ensure the long-term continuity and stability of the Company. Accordingly, the Board has well-considered options available to respond to an unexpected vacancy in the President and CEO position.
Communication with Directors
Any stockholder who desires to contact the Company’s Board of Directors may do so by writing to the Vice President, General Counsel and Secretary, Royal Gold, Inc., 1660 Wynkoop Street, Suite 1000, Denver, Colorado 80202. Any such communication should state the number of shares beneficially owned by the stockholder making the communication. The Vice President, General Counsel and Secretary will forward any such communication to the Chairman of the CNG Committee, and will forward such communication to other members of the Board of Directors as appropriate, provided that such communication addresses a legitimate business issue. Any communication relating to accounting, auditing or fraud will be forwarded to the Chairman of the AF Committee.
Code of Business Conduct and Ethics
The Company has long had in place a Code of Business Conduct and Ethics (the “Code”) applicable to all of its Directors, officers and employees, including the President and CEO, the CFO and Treasurer, and other persons performing financial reporting functions. The Code is reviewed on a yearly basis by the CNG Committee and Board, and is amended when appropriate. The
Code is available on the Company’s website at www.royalgold.com under “Governance — Guidelines & Policies.” 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. The Company will post on its website any amendments to, or waivers from, any provision of the Code.
Board Governance Guidelines
Upon recommendation from the CNG Committee, the Board of Directors adopted the Board of Directors’ Governance Guidelines to assist the Board of Directors in the discharge of its duties and to serve the interests of the Company and its stockholders. The Board of Directors Governance Guidelines are reviewed on a yearly basis. The Board of Directors Governance Guidelines are available on the Company’s website at www.royalgold.com under “Governance — Guidelines & Policies.”
Anti-Hedging, Anti-Pledging and Short Sale Policies
The Company’s Insider Trading Policy prohibits Directors, executive officers and employees on the Company’s restricted trading list from trading in the Company’s common stock on a short term basis, purchasing the Company’s common stock on margin, short sales of Company stock, buying or selling put or call options or other derivative securities relating to Company stock, engaging in hedging or monetization transactions, such as collars, equity swaps, prepaid variable forwards and exchange funds with respect to the Company’s common stock, pledging Company stock as security for any obligation, participating in investment clubs that invest in the Company’s securities, holding the Company’s securities in a margin account, and, other than pursuant to a qualified trading plan, placing open orders (i) of longer than three business days or (ii) ending after a trading window closes.
Trading Controls
Directors, executive officers and employees on the Company’s restricted trading list are required to receive the permission of the Company’s Vice President, General Counsel and Secretary prior to entering into any transactions in Company securities, including gifts, grants and transactions involving derivatives. Generally, trading is permitted only during open trading periods. Directors, executive officers and employees on the Company’s restricted trading list may enter into a trading plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These trading plans may be entered into only during an open trading period and must be approved by the Company.
Certain Relationships and Related Transactions
The AF Committee’s charter requires it to approve or ratify certain transactions involving the Company and “related persons,” as defined under the relevant SEC rules. 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 AF Committee. The policy applies to all executive officers, DirectorsRelated persons include, for example, directors, executives, greater than 5% beneficial owners, and their family members and entities in which any of these individuals has a substantial ownership interest or control.associated entities. In determining whether to approve ratify, or disapprove of entry into a transaction, the AF Committee will considerconsiders all relevant facts and circumstances and will taketakes into account, among other factors, whether the transaction is on terms no less favorable to us than terms generally available to an unaffiliated third party under the same or similar circumstances; whether the transaction would impair the independence of an independent Director;director; and whether the transaction would present an improper conflict of interest for any Directordirector or executive officer of Royal Gold.executive. No related partyrelated-person transactions were required to be reported for fiscal year 2017.
2020.
Conditional Resignation PoliciesANTI-HEDGING AND ANTI-PLEDGING POLICIES
Our Insider Trading Policy prohibits directors, officers, and employees from hedging against their investments in our stock. This helps to ensure alignment between the interest of management and our stockholders generally. Specifically, the policy prohibits any director, officer, or employee from engaging in any of the following activities related to Royal Gold securities, including securities held directly or indirectly by the individual and equity awards received from us as compensation:
● | trading in our securities on a short-term basis; our policy provides that stock purchased on the open market should generally be held for a minimum of six months and ideally longer |
● | purchasing or holding our securities on margin |
30 ROYAL GOLD, INC.
Proposal 1
● | short selling our securities |
● | buying or selling put or call options or other derivative securities relating to our stock |
● | engaging in hedging or monetization transactions, such as collars, equity swaps, prepaid variable forwards, and exchange funds with respect to our securities |
● | participating in investment clubs that invest in our securities |
● | placing open orders of longer than three business days or ending after a trading window has closed other than pursuant to a qualified trading plan |
● | pledging our securities as security for any obligation |
Our Insider Trading Policy is reviewed annually by the CNG Committee and the Board and updated as appropriate. Our Insider Trading Policy is available on our website at www.royalgold.com under “ESG – ESG Document Library.”
TRADING CONTROLS
Under the Company’s Bylaws, each Directorour Insider Trading Policy, directors, officers, and employees on our restricted trading list must receive permission from our Corporate Secretary before entering into any transactions in our securities. Generally, trading is required to executepermitted only during open trading periods. These individuals may enter into a “conditional resignation” providing that such resignation shall10b5-1 trading plan under SEC rules. These trading plans may be effective in the event (i) the Director fails toentered into only during an open trading period and must be elected at any annual meeting of the stockholders at which he or she stands for election or re-election, and (ii) the Board notifies the Director or publicly announces that it accepted the resignation. A majority of the disinterested Directors has discretion whether to accept or reject the Director’s resignation.pre-approved by our Corporate Secretary.
Under the Company’s Board of Directors’ Governance Guidelines, anyOur director reaching the age of 72 must submit a written offer of resignation. A majority of the disinterested Directors has discretion to accept or reject such offers of resignation, which will be considered annually for so long as the affected Director remains in office. During fiscal year 2017, each of Messrs. Haase and Hayes submitted an offer of resignation. Neither offer was accepted by the disinterested Directors.
Royal Gold’s compensation for non-employee Directorsprogram is designed to reflect current market trends and developments with respect to compensation of board members, including the award ofdirector compensation. Among other things, our program is designed to provide a higher proportion of total compensation in equity thanas compared to cash in cash.
order to align the interests of directors and stockholders.
The CNG Committee is responsible for evaluating, and recommending to theour independent members of the Board of Directorsdirectors, the compensation paid to non-employee Directors.nonemployee directors. The independent members of the Board of Directorsdirectors consider the CNG CommitteeCommittee’s recommendation and make final determinations of non-employee Director compensation.on compensation for our nonemployee directors.
The Company doesWe do not have a retirement plan for non-employee Directors. Executive officersnonemployee directors. Any executive who are also Directors areserves as a director is not paid additional compensation for their services on the Board of Directors.our Board. Therefore, Mr. Jensen,Heissenbuttel, as President and CEO, does not receive any additional compensation for his services as a Director.director.
PEER GROUP BENCHMARKING
The CNG Committee retains an independent compensation consultant biennially to benchmark Directordirector compensation against the Company-selectedour peer group which is the same groupevery other year. For purposes of companiesreviewing fiscal year 2020 director compensation, the CNG Committee uses to benchmark executive compensation (see page 27 forrelied on a list of these companies). When considering Director compensation for fiscal year 2017, the CNG Committee reviewed and considered the results of a benchmark study conductedreport prepared by Hugessen Consulting Inc. (“Hugessen”) dated May 2016.in June 2018 in connection with the CNG Committee’s review of director compensation for fiscal year 2019. As a result, our peer group for purposes of fiscal year 2020 director compensation was the same peer group used for purposes of fiscal year 2019 executive and director compensation (see page 49 for a description of our fiscal year 2019 peers).
In additionThe Hugessen report provided benchmarking information with respect to benchmarking the amount of Directordirector compensation against the Company’s peer group using several methodologies, the study also compared the forms of compensation paid to the Company’s Directors to the forms of compensation paid to peer group directors, as well as the shareused, and our stock ownership guidelines applicable to directorsfor directors.
2020 PROXY STATEMENT 31
Table of the Company and its peer group.Contents
Proposal 1
COMPONENTS OF FISCAL YEAR 2020 DIRECTOR 2017 COMPENSATION PROGRAM
Based upon its work withTaking into account the information provided by Hugessen, the CNG Committee recommended, and the independent Directorsdirectors approved, that no changes be made to total Directorthe director compensation or to the forms of compensationprogram for fiscal year 2017.
2020. This was the fourth consecutive year of no increase in director compensation.
Compensation Element for | Fiscal Year | |
Annual Board Retainer | $60,000 | |
Board and Committee Meeting Fees | $1,500 / Meeting Attended | |
Annual | $115,000 | |
Annual Retainer for Chairman of the AF Committee | $15,000 | |
Annual Equity | $ |
* | Annual retainers are paid in |
** | Nonemployee directors received 1,386 shares of restricted stock (U.S. residents) or restricted stock units (Canadian residents). Half of the shares vested immediately on the grant date and the remaining half vested on the first anniversary of the grant date. The number of shares was determined based on the 30-day volume weighted average stock price for the period ended August 12, 2019, which was $116.16. |
* Includes chairmanship for eachDuring the first quarter of fiscal year 2020, the members of the AFCNG Committee andreceived a one-time search committee fee of $15,000, as approved by the CNG Committee.
** On August 16, 2016, each non-employee Director was granted 1,930 shares of restricted stock. Half of these shares vested immediately upon grant and the remaining half of these shares vested on the first anniversaryother independent directors, in recognition of the grant date.
extraordinary effort, diligence, and time commitment in connection with the CEO transition and related matters.
2017FISCAL YEAR 2020 DIRECTOR COMPENSATION
The following table provides information regarding compensation paid to or earned by the Company’s non-employee Directorsour nonemployee directors for their services induring fiscal year 2017. Amounts2020.
Director | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Total ($) | |||
William Hayes | 206,500 | 171,116 | 413,616 | |||
Kevin McArthur | 91,500 | 171,116 | 262,616 | |||
Jamie Sokalsky | 76,500 | 171,116 | 247,616 | |||
Christopher Thompson | 76,500 | 171,116 | 247,616 | |||
Ronald Vance | 106,500 | 171,116 | 313,616 | |||
Sybil Veenman | 91,500 | 171,116 | 262,616 |
(1) | Amount represents the grant date fair value of restricted stock or restricted stock units granted during fiscal year 2020, calculated in accordance with financial statement reporting rules. You can find information about the assumptions used to calculate grant date fair values in Note 8 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended June 30, 2020. In accordance with financial statement reporting rules, the grant date fair value for each share of restricted stock or restricted stock unit was $123.46, which was the closing price of our common stock on the grant date, August 14, 2019. The value shown in this table ($171,116) differs from the value shown in the previous table as the target value of the equity award ($160,000). For administrative purposes, when the awards were granted, we used the 30-day volume weighted average stock price for the period ended August 12, 2019, which was $116.16. For purposes of this table, we are required to report the awards at their grant date fair values calculated in accordance with financial statement reporting rules, as described above. As of June 30, 2020, Messrs. Hayes and Thompson each held 693 shares of unvested restricted stock. All other nonemployee directors elected to defer their 2020 equity compensation pursuant to our Deferred Compensation Plan, which is described below. |
32 ROYAL GOLD, INC.
Proposal 1
DIRECTOR DEFERRED COMPENSATION PLAN
Our nonemployee directors are eligible to participate in our Deferred Compensation Plan. The plan allows participants to elect to set aside eligible cash and equity compensation in a tax-deferred vehicle for each Director vary dueretirement or other life-event purposes. Participants can elect to service on committees or as committee chairs. The annual retainers for fiscalreceive certain income in a future year 2017 werethat would otherwise be paid in cashthe upcoming year. These amounts are not subject to federal income tax at the time of contribution to the plan. The plan is intended to promote retention by providing a long-term savings opportunity on a quarterlytax-efficient basis.
Director |
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| Stock Awards(2) |
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Gordon J. Bogden |
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| 79,500 |
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| 160,750 |
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| 240,250 |
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M. Craig Haase |
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| 94,500 |
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| 160,750 |
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| 255,250 |
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William M. Hayes |
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| 212,500 |
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| 160,750 |
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| 373,250 |
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C. Kevin McArthur |
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| 75,000 |
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| 160,750 |
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| 235,750 |
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Jamie C. Sokalsky |
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| 82,500 |
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| 160,750 |
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| 243,250 |
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Christopher M.T. Thompson |
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| 81,000 |
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| 160,750 |
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| 241,750 |
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Ronald J. Vance |
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| 78,000 |
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| 160,750 |
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| 238,750 |
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Sybil Veenman(3) |
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| 34,500 |
| — |
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| 34,500 |
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(1) Amount Four of cash compensation earned for Board and Committee service in fiscal year 2017.
(2) The amounts shown represent the total grant date fair value, determined in accordance with Accounting Standards Codification (“ASC”) 718, of restricted stock awards in fiscal year 2017. Amounts shown do not represent cash payments madeour six nonemployee directors elected to the individuals, amounts realized or amounts that may be realized. Refer to Note 8 to the Company’s consolidated financial statements contained in the Company’s 2017 Annual Report on Form 10-K filed with the SEC on August 10, 2017, for a discussion on the valuation of the restricted stock awards. In accordance with ASC 718, the grant date fair value for each restricted stock award in fiscal year 2017 was $83.29, which was the closing price of Royal Gold’s common stock on the NASDAQ Global Select Market on August 18, 2016, the date of grant. Restricted stock awards related to continued service for non-employee Directors vest 50% immediately upon grant and 50% on the first anniversary of the date of the grant. As of June 30, 2017, each of Messrs. Haase, Hayes, McArthur, Sokalsky, Thompson and Vance held 965 shares of unvested restricted stock. On June 15, 2017, Gordon Bogden submitted his resignation from the Board of Directors and the Audit and Finance Committee effective June 30, 2017. On June 15, 2017, the CNG Committee recommended and the Board of Directors unanimously approved acceleration of Mr. Bogden’s 965 shares of unvested restricted stock effective June 30, 2017, in recognition of Mr. Bogden’s six years of service to the Company.
(3) Ms. Veenman joined the Board of Directors on January 1, 2017.
Expenses
Non-employee Directors are reimbursed fordefer all of their fiscal year 2020 equity compensation.
EXPENSES
We reimburse nonemployee directors for their out-of-pocket travel, lodging, and meal expenses incurred in connection with the business and affairs of the Company.
their travel in service to our Board. We do not reimburse nonemployee directors for their time spent traveling on Board business.
DIRECTOR STOCK OWNERSHIP GUIDELINES
All non-employee DirectorsNonemployee directors are expected to have a significant long-term financial interest in the Company.Royal Gold. To encourage alignment with the interests of stockholders, each non-employee Directornonemployee director is expectedrequired to own shares of Royal Goldour common stock equal in value to ten (10) times the annual cash retainer. Non-employee Directors have$600,000 within five years from the date of their respective first restricted stock grant to meet ownership targets. All of the Directors exceed their ownership guidelines except Mr. Sokalsky who joined the Board in August 2015, and Ms. Veenman who joined the Board in January 2017.
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All non-employee Directorsequity grant. Nonemployee directors are required to hold 50% of the shares of common stock acquired pursuant to any equity grant net of any shares sold to cover withholding taxes, until they meet their ownership target. Directors are also prohibited from hedging against their investments in our stock or pledging their shares. As of September 21, 2020, all of our nonemployee directors exceeded their ownership guidelines.
| Guideline Value of $600,000 Compared to FY 2020 Board Retainer | Actual Value of Stock Owned Compared to FY 2020 Board Retainer | ||
William Hayes | 10x Retainer | 17.9x Retainer | ||
Kevin McArthur | 10x Retainer | 35.0x Retainer | ||
Jamie Sokalsky | 10x Retainer | 31.6x Retainer | ||
Christopher Thompson | 10x Retainer | 89.2x Retainer | ||
Ronald Vance | 10x Retainer | 28.2x Retainer | ||
Sybil Veenman | 10x Retainer | 16.0x Retainer |
2020 PROXY STATEMENT 33
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The AF Committee and the Board of Directors seek stockholder ratification of the appointment of Ernst & Young LLP, an independent registered public accounting firm, to audit the consolidated financial statements of the Company for the fiscal year ending June 30, 2018.
The ratification of the appointment of Ernst & Young LLP is submitted to the stockholders because the AF Committee and the Board of Directors believe this to be good corporate practice. Should the stockholders fail to ratify this appointment, the AF Committee will review the matter.
Representatives of Ernst & Young LLP are expected to attend the Annual Meeting. They will have an opportunity to make a statement, if they so desire, and will have an opportunity to respond to appropriate questions from the stockholders.
Fees for services rendered by Ernst & Young LLP for the fiscal years ended June 30, 2017 and 2016 are as follows:
·Audit Fees. Audit fees paid to Ernst & Young LLP were $756,876 and $629,512 for the fiscal years ended June 30, 2017 and 2016, respectively. Included in this category are fees associated with the audits of the Company and certain foreign subsidiaries’ annual financial statements and review of the Company’s quarterly financial statements, issuance of consents and review of documents filed with the Securities and Exchange Commission. Audit fees also include fees associated with the audit of management’s assessment and operating effectiveness of the Sarbanes Oxley Act, Section 404, internal control reporting requirements.
·Audit-Related Fees. There were no audit-related fees paid to Ernst & Young LLP for the fiscal years ended June 30, 2017 and 2016.
·Tax Fees. Tax fees paid to Ernst & Young LLP for tax-related services were $246,745 and $250,204 for the fiscal years ended June 30, 2017 and 2016, respectively. Included in this category are fees associated with tax compliance, tax return preparation and certain tax consulting services provided to the Company. Of the total tax fees paid during fiscal year 2017, $161,477 was paid for tax compliance and tax return preparation services, and $85,268 was paid for tax consulting services primarily for the Company’s subsidiaries.
·All Other Fees. Other fees paid to Ernst & Young LLP for the fiscal years ended June 30, 2017 and 2016 were $30,517 and $21,528, respectively. Included in this category are fees associated with the ongoing servicing of the Company’s global mobility policies.
Pre-Approval Policies and Procedures
The AF Committee adopted a policy that requires advance approval for all audit, audit-related, tax services, and other services performed by the independent registered public accounting firm. The policy provides for pre-approval by the AF Committee of specifically defined audit and non-audit services. Unless the specific service has been previously pre-approved with respect to that year, the Audit and Finance Committee must approve the permitted service before the independent auditor is engaged to perform such service. The AF Committee delegated to the Chairman of the AF Committee authority to approve certain permitted services, provided that the Chairman reports any such decisions to the AF Committee at its next scheduled meeting. The AF Committee pre-approved all of the services described above for the Company’s 2017 fiscal year.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the votes cast at a meeting at which a quorum is present is required to ratify the appointment of Ernst & Young LLP.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”
THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS
INDEPENDENT REGISTERED PUBLIC ACCOUNTS OF THE COMPANY
AUDIT AND FINANCE COMMITTEE REPORT
The Audit and Finance Committee has reviewed and discussed the audited financial statements of the Company for the fiscal year ended June 30, 2017, and the Company’s reporting processes, including internal control over financial reporting, with the Company’s management. The Audit and Finance Committee has discussed with Ernst & Young LLP, the Company’s independent registered public accountants for fiscal year 2017, the matters required to be discussed by the applicable Public Company Accounting Oversight Board standards. The Audit and Finance Committee has also received the written disclosures and the letter from Ernst & Young LLP required by the applicable requirements of the Public Company Accounting Oversight Board regarding its communications with the Company’s Audit and Finance Committee concerning independence and the Audit and Finance Committee has discussed the independence of Ernst & Young LLP with the Company.
Based on the review and discussions with the Company’s auditors and our management, the Audit and Finance Committee recommended to the Board of Directors (and the Board of Directors has approved) that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2017, for filing with the United States Securities and Exchange Commission.
This Report has been submitted by the following independent Directors, who comprise the Audit and Finance Committee of the Board of Directors:
William Hayes, Chairman · Jamie C. Sokalsky · Christopher M.T. Thompson
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Our Board recommends a vote FOR approval of the advisory resolution on executive compensation |
As required by Section 14A of the Exchange Act, we seekWe are seeking stockholder approval of an advisory resolution on the compensation of our NEOs as described in the Compensation Discussion and Analysis, the compensation tables, and related narrative discussion included in this Proxy Statement.
proxy statement.
This proposal, commonly known as a “Say on Pay”“say-on-pay” proposal, gives stockholders the opportunity to approve, reject or abstain from voting with respect toexpress a view on our fiscal year 20172020 executive compensation programs and policies and the compensation paid to theour NEOs. This vote is not intended to address any specific item of compensation, but rather the overall compensation ofpolicies and practices relating to our NEOs as described in this Proxy Statement.proxy statement. Because your vote is advisory, it will not be binding on the Board. The Board and CNG Committee will, however, as they have done in prior years, consider the outcome of the say-on-pay vote when considering future compensation arrangements.
At our 2017 annual meeting, stockholders approved, on an advisory basis, holding the say-on-pay votes annually, and the Board has adopted a practice of providing for an annual say-on-pay vote. Accordingly, the next say-on-pay vote will occur at our 2021 annual meeting.
TheOur Board recommends a “FOR” vote because it believes that our compensation policies and practices are effective in achieving the Company’sour compensation goals of paying a competitive salary, providing attractive annual and long-term incentives to reward growth, and linking management interests with stockholder interests.
Key characteristicselements of our fiscal year 20172020 executive officer compensation program are described beginning on page 30.
40.
Stockholders are asked to approve the following advisory resolution:
RESOLVED, that the compensation paid to the Company’sRoyal Gold’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion, is hereby approved.
Although the vote on this proposal is advisory only, the CNG Committee will review and consider the voting results when evaluating our executive compensation program.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the votes cast at a meeting at which a quorum is present is required to approve this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”
APPROVAL OF THE ADVISORY RESOLUTION ON EXECUTIVE COMPENSATION.
The Compensation, Nominating, and Governance Committee of the Board of Directors has reviewed and discussed with management the following Compensation Discussion and Analysis. Based on this review and discussion, the Compensation, Nominating, and Governance Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statementproxy statement and incorporated by reference in the Company’s annual reportRoyal Gold’s Annual Report on Form 10-K for fiscalthe year 2017,ended June 30, 2020, and the Board of Directors has approved that recommendation.
This report is provided by the following independent Directors,directors, who comprise the Compensation, Nominating, and Governance Committee:
Ronald Vance, Chairman | Kevin McArthur | Sybil Veenman |
34 ROYAL GOLD, INC.
M. Craig Haase, Chairman Proposal 2· C. Kevin McArthur · Ronald J. Vance · Sybil E. Veenman
Glossary of Terms and AbbreviationsCOMPENSATION DISCUSSION AND ANALYSIS
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This Compensation Discussion and Analysis is designed to provide our stockholders with a clear understanding of our compensation philosophy and objectives, compensation-setting process, and the fiscal year 2020 compensation of our named executive officers.
NAMED EXECUTIVE OFFICERS
For fiscal year 2020, we had seven named executive officers, consisting of five current executives and two former executives (collectively, our “NEOs” or “executives”).
CURRENT NEOs
WILLIAM HEISSENBUTTEL, 55 | ||
President and Chief | Mr. Heissenbuttel has more than 30 years of corporate finance experience, including 25 years in project and corporate finance in the metals and mining industry. Mr. Heissenbuttel was appointed our President and Chief Executive Officer and a Class I director, effective January 2, 2020. Previously, he served as our Chief Financial Officer and Vice President Strategy from June 2018 to January 2020, Vice President Corporate Development from 2007 to June 2018, Vice President Operations from January 2015 to June 2016, and Manager Corporate Development from 2006 to 2007. Prior to joining Royal Gold, Mr. Heissenbuttel served as Senior Vice President from 2000 to 2006 and Vice President from 1999 to 2000 at N M Rothschild & Sons (Denver) Inc. From 1994 to 1999, he served as Vice President and then as Group Vice President at ABN AMRO Bank N.V. From 1987 to 1994, he was a Senior Credit Analyst and an Associate at Chemical Bank Manufacturers Hanover. Mr. Heissenbuttel holds a Master of Business Administration degree from the University of Chicago and a Bachelor of Arts degree from Northwestern University. |
MARK ISTO, 60 | ||
Executive Vice | Mr. Isto has 35 years of experience in mining engineering, mine management, and project development on a regional and global basis. Mr. Isto has served as our Executive Vice President and Chief Operating Officer since January 2020. Previously, he served as our Vice President, Operations, from June 2016 to January 2020 and Executive Director, Project Evaluation, for our wholly owned subsidiary, RGLD Gold (Canada) Inc., from January 2015 to June 2016. Prior to joining Royal Gold, Mr. Isto served as Vice President Operations for First Nickel Inc. from 2012 to 2014 and served in Vice President and Senior Vice President roles in the Projects Group at Kinross Gold Corp. from 2006 to 2012. Mr. Isto also served as Mine General Manager of Golden Sunlight Mines, Inc. (Placer Dome America) from 2004 to 2006 and previously held numerous other management positions in Placer Dome’s global operations, including Chief Engineer, Mine Superintendent, Project Director, and Senior Advisor over nearly 25 years with Placer Dome. Mr. Isto holds a Master of Business Administration degree in Business Administration from the University of Nevada–Reno and a Bachelor of Science degree in Mining Engineering from Montana College of Mineral Science and Technology. |
2020 PROXY STATEMENT 35
Proposal 2
DANIEL BREEZE, 47 | ||
Vice President | Mr. Breeze has 20 years of technical and commercial experience across international markets. Mr. Breeze has served as Vice President Corporate Development of our wholly owned subsidiary, RGLD Gold AG, since January 2019. Before joining Royal Gold, Mr. Breeze worked for Bank of Montreal from 2010 to December 2018, serving most recently as Managing Director, Equities for BMO Capital Markets, based in Zürich, Switzerland, where he was focused primarily on the mining sector. Previously, Mr. Breeze was a member of the Equities Group at UBS Investment Bank where he worked extensively with North American and European mining companies across the commodity spectrum. Prior to his banking career, Mr. Breeze was a member of its geotechnical/mining team at Golder Associates. Mr. Breeze holds Master of Engineering and Master of Business Administration degrees from the University of Toronto and a Bachelor of Science degree in Civil Engineering from the University of Manitoba. Mr. Breeze is also a registered Professional Engineer. |
PAUL LIBNER, 47 | ||
Chief Financial Officer | Mr. Libner has more than 20 years of finance and accounting experience. Mr. Libner has served as our Chief Financial Officer and Treasurer since January 2020. Previously, he served as our Controller and Treasurer from June 2018 to January 2020 and Controller from 2004 to May 2018. Mr. Libner began his career with Ernst & Young where he provided audit and business advisory services, primarily for the financial services and healthcare industries, and later held various finance and accounting roles within the financial services industry. Mr. Libner holds a Bachelor of Science degree and Master of Accountancy degree from the University of Denver. |
RANDY SHEFMAN, 47 | ||
Vice President and | Mr. Shefman has more than 20 years of legal experience in international transactions across the mining, oil and gas, and power sectors. He joined Royal Gold in 2011 as Associate General Counsel and served in that capacity until his appointment as Vice President and General Counsel in January 2020. Prior to Royal Gold, Mr. Shefman was in private legal practice with regional and international law firms, including LeBouef Lamb Greene & MacRae, Holland & Hart, and Hogan Lovells. Mr. Shefman holds an LL.M. degree in Environmental and Natural Resources Law and Policy from the University of Denver, a J.D. degree from the University of Colorado, and a Bachelor of Arts degree in history from the University of Michigan. |
FORMER NEOs
Tony Jensen retired as our President and Chief Executive Officer and a Class I director effective January 1, 2020. Bruce Kirchhoff retired as our Vice President and General Counsel effective January 1, 2020.
36 ROYAL GOLD, INC.
Proposal 2
WE DELIVERED RECORDSTRONG FINANCIAL AND OPERATING RESULTS FOR FISCAL YEAR 20172020
Fiscal year 20172020 was an excellent year. The $1.4 billionanother year of strong financial performance for Royal Gold. We saw new streamrecords for revenue of $499 million, operating cash flow of $341 million, and royalty acquisitionsearnings of $199 million. We transitioned to new leadership and funded growth with $154 million invested in projects that we closedexpect to provide future revenue growth, including $136 million of advance payments towards the Khoemacau silver stream. We also increased our per share dividend for the 19th consecutive year and fundedpaid total dividends of $71 million.
2020 FINANCIAL HIGHLIGHTS | 2020 OPERATIONAL HIGHLIGHTS | ||||||||
STRONG REVENUE | STRONG OPERATING CASH FLOW | GEOs | FUNDED GROWTH | ||||||
$499M | $341M | 320,000 | $136M | ||||||
RECORD DIVIDENDS RETURNED TO STOCKHOLDERS | ROBUST LIQUIDITY | REVENUE BY METAL | |||||||
$71M | $1B |
THE SAME PERFORMANCE MEASURES USED TO EVALUATE CORPORATE PERFORMANCE ARE USED FOR OUR COMPENSATION PROGRAMS
Our executives bear responsibility for driving corporate performance. Their compensation strongly correlates to our corporate performance based on many of the same key metrics that our Board uses to chart corporate strategy and evaluate our success in the first quarterachieving that strategy.
2020 PROXY STATEMENT 37
Table of fiscal 2016 had their expected impact. Contents
Proposal 2
MEASURES OF CORPORATE OPERATIONAL, FINANCIAL, AND STRATEGIC PERFORMANCE
Key Measure | Description of Performance Measures | Tie to Strategy | Element of Compensation | ||
Operating Cash Flow Multiple vs. GDX Constituents | Measures our relative market performance against our peers in the GDX and directly reflects production performance, financial discipline, and portfolio quality | Financial flexibility and discipline; capital deployment | Short-term incentive | ||
Net GEO Production | Measures the production success of our existing asset portfolio | Gold focused; capital deployment | |||
Cost Containment | Measures management’s ability to manage our business in a cost-efficient manner | Financial flexibility and discipline | |||
Growth in Net GEOs | Measures our success in growing our business through acquisitions of new stream and royalty interests | Growth | Performance shares | ||
TSR Relative to GDX Constituents | Measures the value created for our stockholders | Return to stockholders | |||
Net Revenue Target | Established a minimum financial threshold required before NEOs may receive vesting of restricted shares, subject to service conditions | Retention of quality management | Restricted shares |
38 ROYAL GOLD, INC.
Proposal 2
WE EMPLOY COMPENSATION BEST PRACTICES
Our new streams at Wassa and Prestea, Andacollo and Pueblo Viejo now rank among our top five revenue generators, and together accounted for 40% of fiscal year 2017 revenue. Our participation in the process to place Thompson Creek Metals Company in stronger hands led directly to the elimination of uncertainty over our investment in the Mount Milligan Mine. The new stream productionexecutive compensation program aligns well with governance best practices and the eliminationlong-term interests of uncertainty around Mount Milligan boosted our share pricestockholders. We believe these best practices, some of which are in response to $78.17 at fiscal 2017 year end, resulting in total one-year returnfeedback from our stockholders, are key to our receiving an average of 98% voter support for our executive compensation program at each annual meeting of stockholders since November 2016.
The following are representative practices that we do and do not employ:
WE DO | WE DON’T | |||
●Pay for performance with 72% of our current CEO’s and 67% of our other current NEOs’ total direct compensation for fiscal year 2020 representing variable or at-risk compensation ●Use multiple performance measures for both short- and long-term incentive programs ●Use challenging short- and long-term goals focused on growth and long-term returns ●Establish target and maximum awards in short- and long-term incentive programs ●Use a formulaic scorecard to determine short-term incentives ●Use multiple types of equity awards under long-term incentive program intended to motivate performance over various time horizons and balance the overall risk-reward relationship ●Use a peer group of gold-focused companies to benchmark performance and compensation levels ●Target NEO compensation at or near the median of our peer group ●Require executives to meet robust stock ownership guidelines to align their interests with the interests of our other stockholders ●Apply double-trigger vesting for equity awards in a change of control ●Engage with stockholders on a variety of topics, including governance and compensation ●Regularly monitor our executive compensation program to assess and mitigate compensation-related risks ●Maintain independence of the CNG Committee, and our independent compensation consultant reports directly to the CNG Committee | ●Guarantee salary increases, annual short-term incentive payments, or long-term incentive opportunities ●Provide excessive perquisites or other special benefits ●Permit repricing of stock options without stockholder approval ●Provide excise tax gross-ups, including for change-of-control payments ●Permit executives or directors to hedge or pledge our stock ●Maintain a defined benefit pension plan or any special executive retirement plans |
2020 PROXY STATEMENT 39
We also completed the last of our stream funding commitments, meaning that all cash flow can be directed to new opportunities, debt reduction and dividends. In addition, we repaid $95 million on our revolving credit facility, and expanded the facility from $650 million to $1 billion in availability.
Record-Setting 2017 Financial HighlightsProposal 2
2017 Operational Highlights
OUR COMPENSATION PHILOSOPHY AND OBJECTIVES SUPPORT COMPANY PERFORMANCE
The CNG Committee sets and administers our executive compensation philosophy, objectives, and design. Our fundamental compensation philosophy is to recruit, retain, and reward high-performing executive officersexecutives who will:
· Drive Company growth and profitability;
· Increase long-termwill bring value for our stockholders;
· Manage the Companyto Royal Gold in a responsible manner; andvariety of ways:
· Maintain the Company’s reputation for management excellence.
● | Drive growth and profitability |
● | Increase long-term value for our stockholders |
● | Manage Royal Gold in a responsible manner and in the best interests of stockholders, employees, and other stakeholders |
● | Maintain our reputation for management excellence and financial performance |
When designing executive compensation, the CNG Committee seeks to achieve the following objectives:
· Attract and retain the highest caliber personnel on a long-term basis;
· Align management’s interests with the advancement of long-term, sustainable stockholder value;
· Provide incentive compensation based on the Company’s performance on key financial, operational and strategic goals;
· Encourage creativity and innovation; and
· Discourage excessive risk-taking.
STOCKHOLDER ENGAGEMENT RESULTED IN EXECUTIVE COMPENSATION TRANSFORMATION
We are committed to creating long-term value for our stockholders. To ensure alignment with their best interests, we engage with our major stockholders throughout the year on a variety of topics, including our financial performance, growth strategy, corporate governance practices and, importantly, our executive compensation program. Although we have always received more than majority support for our executive compensation programs, stockholder support from 2013 through 2015, in the low- to mid-70% range, was in our view unacceptable. The CNG Committee began working with Hugessen in early 2015 to address concerns expressed earlier by some of our stockholders and proxy advisors. Members of our management team also solicited feedback from investors representing approximately 50% of our outstanding shares concerning both our historic executive compensation program and the material program changes then under consideration. Generally, stockholders confirmed appreciation for increasingly transparent executive compensation disclosure, support for our compensation benchmarking practices, including peer selection methodology, and support for program enhancements then under consideration.
In August 2015, the CNG Committee introduced significant changes to our executive compensation program for fiscal year 2016. These changes are summarized in the following table. We believe these changes were key to receiving 97.2% voter support for our new executive compensation program at our November 2016 annual meeting of stockholders.
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The Company intends to continue engaging with its stockholders, and the CNG Committee will continue considering the results of these engagements when evaluating our compensation philosophy, policies and practices, and when making future compensation decisions for our executives.
WE USE THE SAME KEY METRICS TO EVALUATE CORPORATE PERFORMANCE THAT WE USE TO DRIVE EXECUTIVE COMPENSATION DETERMINATIONS
One of many major improvements made to the Company’s executive compensation program for fiscal year 2016, which was continued for fiscal year 2017, is a more transparent and direct alignment between specific corporate objectives and predetermined executive performance metrics and targets. Our executives bear responsibility for driving Company performance, and their compensation is strongly correlated to the Company’s performance based on the same key metrics that our Board of Directors utilizes to chart corporate strategy and evaluate our success in achieving that strategy. These key metrics are summarized in the table below. Their correlation to executive compensation is presented in much more detail, along with other compensation disclosures, in the executive compensation discussion following this Executive Summary.
Table 1 — Key Metrics of Corporate Operational, Financial and Strategic Performance
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WE EMPLOY MANY COMPENSATION BEST PRACTICES
During engagement, our largest stockholders concur that many components of our existing executive compensation plan align well with governance best practices and the best interests of our long-term stockholders. The following are representative practices we do and do not employ:
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THE CNG COMMITTEE LEADS THE ANNUAL EXECUTIVE COMPENSATION-SETTING PROCESS, WITH INVOLVEMENT FROM ITS COMPENSATION CONSULTANT AND MANAGEMENT
Roles and Responsibilities in the Annual Compensation Process
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The CNG Committee commissions external reviews of executive and director compensation in alternating years to balance consulting costs with the need to achieve consistency with market compensation practices. The CNG Committee first retained Hugessen in fiscal year 2015 to provide independent advice on the Company’s executive compensation framework and design, as well as related governance matters. Since then, the CNG Committee included Hugessen’s director and executive compensation reports as one consideration in its deliberations on compensation design and award.
The CNG Committee utilizes the independence factors prescribed by the SEC and NASDAQ to assess the independence of its compensation consultants on an annual basis. Each year, the CNG Committee determined that, at all relevant times, no conflict of interest exists regarding Hugessen’s work.
The CNG Committee’s compensation consultant provides no services to management. Instead, the CNG Committee determines the nature and scope of the desired consulting services and enters into a consulting agreement directly with the independent consultant. The CNG Committee chairman approves all statements for services performed.
Members of Royal Gold’s management do not have authority to make off-cycle or ad-hoc equity grants. In the event of a new hire grant, approval is obtained prior to any grant being made either at a regularly scheduled CNG Committee meeting or by unanimous written consent of the CNG Committee.
WE ESTABLISH RELEVANT COMPARATOR GROUPS AND CONDUCT EXECUTIVE COMPENSATION BENCHMARKING
We Select Benchmarking Peers that Match Our Industry, Business Model, Market Cap and Correlation to Gold Price
The CNG Committee reviews and selects executive compensation peers annually based primarily on similar industry profile and size as measured by market capitalization. Our compensation peer group includes both of our direct streaming and royalty competitors of comparable size, while the remainder of the group includes comparably-sized gold and silver mining companies.
Many of our largest investors have told us repeatedly in recent years that they consider our gold-focused peer group to be the most relevant and appropriate for compensation and performance benchmarking purposes. Following is a comparison between the Company’s 2016 selected peer group and those selected by Glass-Lewis and Institutional Shareholder Services (“ISS”) in 2016:
Table 2 - Comparison of Peer Groups Selected by the Company and Proxy Advisors
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(1)The Company peer group is reviewed annually. Since 2013, changes to the peer group were made either to account for merger and acquisition activity in the peer group or to better position the Company among its peers according to size, as measured by market capitalization.
(2)According to S&P CapitalIQ, (i) there are only four publicly traded precious metals companies (including Royal Gold) domiciled in the United States having a market capitalization greater than $1 billion, compared to 24 such companies in Canada; and (ii) as of June 30, 2017, the peers selected most recently by ISS averaged only one-seventh the market capitalization of Royal Gold. We believe that a fair compensation peer group, in terms of both industry profile and size, cannot be selected for Royal Gold without including Canadian entities.
Table 3 — Company Comparisons to Company Selected Peer Group
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| As of June 30, 2016 (In USD Millions) |
| Correlation to Gold |
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Company |
| Industry |
| Market Capitalization |
| Last 12 Months’ EBITDA |
| June 30, 2016 |
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Agnico Eagle Mines Limited |
| Gold |
| $ | 11,796 |
| $ | 799 |
| 88 | % |
Alamos Gold Inc. |
| Gold |
| $ | 2,255 |
| $ | 96 |
| 90 | % |
Centerra Gold Inc. |
| Gold |
| $ | 1,436 |
| $ | 188 |
| 4 | % |
Coeur Mining, Inc. |
| Silver |
| $ | 1,731 |
| $ | 157 |
| 84 | % |
Eldorado Gold Corporation |
| Gold |
| $ | 3,202 |
| $ | 263 |
| 60 | % |
Franco-Nevada Corporation |
| Gold |
| $ | 13,454 |
| $ | 390 |
| 90 | % |
Hecla Mining Company |
| Silver |
| $ | 1,958 |
| $ | 160 |
| 85 | % |
IAMGOLD Corporation |
| Gold |
| $ | 1,673 |
| $ | 152 |
| 88 | % |
New Gold Inc. |
| Gold |
| $ | 2,221 |
| $ | 282 |
| 92 | % |
Pan American Silver Corp. |
| Silver |
| $ | 2,492 |
| $ | 121 |
| 89 | % |
Wheaton Precious Metals Corporation |
| Silver |
| $ | 10,309 |
| $ | 495 |
| 89 | % |
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| $ | 336 |
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Median |
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| $ | 188 |
| 88 | % |
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| $ | 154 |
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Average |
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| $ | 282 |
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Royal Gold, Inc. |
| Gold |
| $ | 4,703 |
| $ | 245 |
| 72 | % |
Percentile Rank |
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We Compare Our Executive Officer Compensation Against our Benchmarking Peers
For fiscal year 2017, the CNG Committee adjusted base salary in two respects: a 3.0% cost of living increase based upon the July 2016 United States Bureau of Labor Statistics study for the Denver area; and, where appropriate, adjustments believed necessary to align NEOs at or near the aged median salaries of its benchmarking peers.
OUR EXECUTIVE COMPENSATION DESIGN INCLUDES A MIX OF BASE SALARY AND SHORT- AND LONG-TERM INCENTIVES
The Company’s total direct executive compensation programCompensation for our executives includes base salary, a short-term cash incentive, and long-term equity incentives.incentive awards, and a small amount of fixed benefits. The majority of target compensation (72% of CEO pay and 67% of NEO pay) is offered in variable pay, with anperformance-based and not guaranteed. Our emphasis is on long-term equity to bestbetter align our executives’ interests with our stockholders’ interests:
Table 4 — Elements of Fiscal Year 2017 NEO Compensation
Current |
| Fiscal Year 2020 Performance Measures | Measuring Period | How Payout Determined | Other Current NEOs | ||||||||||
Salary | Reviewed annually | Individual experience and performance | Ongoing | Benchmarking; individual experience and performance | |||||||||||
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Stock Options and SARs | Awarded annually | Stock performance and service conditions (page | 1- to 3-year vesting | Stock performance | |||||||||||
Restricted Shares | Net | 3- to 5-year vesting | CNG Committee verification of performance as compared to preestablished measure | ||||||||||||
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Performance Shares (TSR) | TSR percentile compared to GDX constituents and service conditions (page 45) | 1 and 3 years | |||||||||||||
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40 ROYAL GOLD, INC.
Our executive compensation continues to be significantly “at risk.” Over 75%Table of our CEO’s total direct compensation, and 70% of our other NEOs’ total direct compensation for fiscal year 2017 was performance-based, and not guaranteed.
Contents
Proposal 2
WE TARGETED FISCAL YEAR 2017 TOTAL DIRECT COMPENSATION AT THE PEER GROUP MEDIAN
Based on our engagement with investors and proxy advisors in recent years, and the CNG Committee’s work with Hugessen during fiscal year 2015, the CNG Committee determined to target total direct compensation at the median of our executive compensation peers beginning with fiscal year 2016. For fiscal year 2017, any individual element of executive compensation (base salary, short-term cash incentive, options/SARs, restricted stock or performance shares) may be somewhat above or below median, but the sum of all elements was targeted to the median of our compensation peers.
WE ESTABLISHEDESTABLISH THRESHOLD, TARGET, AND MAXIMUM PAYOUTS FOR SHORT-TERM INCENTIVES AND LONG-TERM PERFORMANCE SHARES CORRELATED TO KEY COMPANY PERFORMANCE METRICSMEASURES
The CNG Committee established threshold, target, and maximum payouts for short-term incentives and for the GEO Share and TSR Share performance measures, whichshares. Payouts can range from zero payout if no threshold performance measure is not achieved to 200% payout if eachevery maximum performance measure is achieved or exceeded.achieved.
The CNG Committee believes that
·Threshold level performance goals should be set to the minimum acceptable performance level, below which performance is not worthy of variable compensation;
·Target level performance goals should be consistent with the annual budget and the Company’s strategic plan, but should be challenging to achieve; and
·Maximum level performance should be set to require a significant stretch to achieve; they are exemplary performance levels that exceed near term targets and are worthy of payout up to a maximum 200% of target.
● | Threshold performance goals should be set to the minimum acceptable performance level, below which performance is not worthy of variable compensation |
● | Target performance goals should generally be consistent with our annual budget and strategic plan, but should be challenging to achieve |
● | Maximum performance goals should be set to require a significant stretch to achieve; they are exemplary performance levels that exceed targets and are worthy of payout up to a maximum 200% of target |
WE ESTABLISHED A HIGHERPERFORMANCE HURDLE FOR FISCAL YEAR 2017 INCENTIVE AWARDSRESTRICTED SHARES
The CNG CommitteeWe were required the Company to achieve a $240$280 million Net Revenue Targetin net revenue for fiscal year 2017 in order2020 for the Company’s executive officers to be eligible to vest inany restricted stock awardedor restricted stock units granted to NEOs in August 2016, compared2019 to the $220 millionvest. Net Revenue Target establishedrevenue is a non-GAAP measure that is calculated as revenue less cost of sales (which excludes depreciation, depletion, and amortization). Our net revenue for fiscal year 2016. For this purpose, “Net Revenue” means our reported revenue, less reported cost of sales, and less any revenue recognized from our Voisey’s Bay royalty.
The Committee determined to exclude revenue recognized from our Voisey’s Bay royalty (historically a significant revenue contributor) from “Net Revenue” because the operator of the Voisey’s Bay mine unilaterally changed the royalty calculation methodology in a manner that entirely eliminated royalty revenue—a methodology the Company is aggressively disputing in litigation.
The Net Revenue Target applicable to restricted stock awards made in August 20162020 was surpassed in fiscal year 2017, with record Net Revenue of $353.5$415 million. As a result, the Company’s executive officers became eligible to vest in the restricted stock awarded in August 2016.
performance threshold for these awards was met. The service requirements, as discussed below, must also be met before any awards vest.
THREE ELEMENTS OF TOTAL DIRECT COMPENSATION
1. BASE SALARY
Base salary is the fixed cash amount paid to ouran executive officersto perform their job duties. The CNG Committee reviews and approves executive salaries each fiscal year. Base salaries are benchmarked inAugust. In alternating years, by the CNG Committee’s independent compensation consultant andbenchmarks executive salaries against our peer group. In general, base salaries are reviewed and approved by the CNG Committee annually to maintain salariesset at or near the median of our compensation peers. peer group.
In alternating years when independent benchmarking is not performed, the CNG Committee ages the most recent benchmarking results using athe most recent U.S. Department of Labor Bureau of Labor Statistics cost-of-living index for the geographic region that includes our Denver headquarters.
In early 2019, the Company’s Denver, Colorado headquarter office.
Following consideration of Hugessen’s 2015CNG Committee engaged Hugessen as its independent compensation consultant to conduct an updated executive compensation benchmarking study for purposes of setting fiscal year 2020 executive compensation. Hugessen provided its benchmarking study in May 2019, which was supplemented by the CNG Committee and management and then further validated by Hugessen.
Taking into account the work of the independent compensation consultant, for fiscal year 2020, the CNG Committee adjusted prior year base salariessalary in three respects, as detailed in the table below: (1) to includeprovide a 3% cost2.7% cost-of-living increase based on the July 2019 U.S. Department of living increase and,Labor Bureau of Labor Statistics cost-of-living index for the geographic region that includes our Denver headquarters; (2) where appropriate, a further adjustment aligning each executive officer’s fiscal year 2017 baseto align an executive’s salary withcloser to the aged median base salary of our peers; and (3) to adjust for any promotions.
In setting Mr. Heissenbuttel’s new compensation package in connection with his promotion to President and CEO in January 2020, the same or similar officer positionCNG Committee considered the following: (1) CEO compensation at the companies in our peer companies:
Table 5 — CEO and NEO Base Salary
Name |
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Tony Jensen |
| CEO and President |
| $ | 700,000 |
| $ | 720,000 |
| 2.9 | % |
Stefan Wenger |
| CFO and Treasurer |
| $ | 425,000 |
| $ | 440,000 |
| 3.5 | % |
William Heissenbuttel |
| VP Corporate Development |
| $ | 450,000 |
| $ | 470,000 |
| 4.4 | % |
Mark Isto |
| VP Operations |
| $ | 255,000 |
| $ | 350,000 |
| 37.3 | %* |
Bruce C. Kirchhoff |
| VP, General Counsel and Secretary |
| $ | 375,000 |
| $ | 386,000 |
| 2.9 | % |
*Mr. Isto became an executive officergroup; (2) our practice of the Company on July 1, 2016. Adjustments were made to his base salary to position histargeting total direct compensation at or near the median of his executiveour peer group, and (3) the fact that Mr. Heissenbuttel was new to the CEO role. The CNG Committee set Mr. Heissenbuttel’s compensation peers.
at a level designed to acknowledge the significance of the CEO role, while at the same time providing upside potential for subsequent compensation adjustments as he grows into the new position and demonstrates measurable success relative to specific corporate and personal goals.
2020 PROXY STATEMENT 41
Proposal 2
EXECUTIVE BASE SALARIES
Name | Title | Base Salary at End of FY2019 ($) | Base Salary at End of FY2020(1) ($) | Increase | Reason for Increase | |||||
William Heissenbuttel | President and CEO | 502,000 | 650,000 | 29% | 2.7% cost-of-living increase and remaining increase for promotion to President and CEO | |||||
Mark Isto | EVP and COO, Royal Gold Corporation | 430,000 | 485,000 | 13% | 2.7% cost-of-living increase, 4.7% increase to move closer to peer median, and remaining increase for promotion to EVP | |||||
Daniel Breeze | VP Corporate Development, RGLD Gold AG | 350,000 | 370,000 | 5.8% | 2.7% cost-of-living increase and remaining increase to move closer to peer median | |||||
Paul Libner | CFO and Treasurer | 270,000 | 340,000 | 26% | 2.7% cost-of-living increase and remaining increase for promotion to NEO position | |||||
Randy Shefman | VP and General Counsel | 258,500 | 325,000 | 26% | 2.7% cost-of-living increase and remaining increase for promotion to NEO position | |||||
Tony Jensen | Former President and CEO | 800,000 | 822,000 | 2.7% | 2.7% cost-of-living increase | |||||
Bruce Kirchhoff | Former VP, General Counsel, and Secretary | 414,000 | 426,000 | 2.7% | 2.7% cost-of-living increase |
(1) | For Messrs. Jensen and Kirchhoff, amounts represent their base salaries on their January 1, 2020, retirement date. |
2. SHORT-TERM INCENTIVE AWARDS AND DISCRETIONARY BONUSES
We Continued Utilizing a Short-Term Incentive Scorecard for Fiscal Year 2017WE USE A FORMULAIC SHORT-TERM INCENTIVE SCORECARD AND PROVIDE LIMITED DISCRETIONARY BONUSES WHEN APPROPRIATE
For fiscal year 2016, theThe CNG Committee adopteduses a new, formulaic short-term incentive scorecard including pre-determinedthat sets predetermined financial, operational, strategic, and strategicindividual performance measures as well as individual performance objectives.for determining awards of short-term incentives. The CNG Committee believes the new scorecard greatly enhances transparency, utilizes more commonly-used and easily-understoodis transparent, uses financial and operational measures than the prior methodology,that are understood by our executives and betterstockholders, and aligns NEOexecutive pay with our annual performance.
In August 2019, the Company’s fiscal year performance. The new scorecard was well-received by our stockholders andCNG Committee established a short-term incentive target for each executive based on a percentage of the proxy advisors, and was continuedexecutive’s salary for fiscal year 2017.
Forty percent of our NEOs’ short-term incentive eligibility depended on the Company’s performance against three metrics:
·Our operating cash flow multiple relative to those of the GDX Constituents, before working capital changes. The operating cash flow multiple measures our relative market performance against that of our peers and directly reflects production performance, financial discipline and portfolio quality;
·Net GEO production relative to the Company’s fiscal year 2017 budget forecast. Net GEO production relative to budget represents the production success of our existing asset portfolio. Net GEO production for purposes of determining short-term incentives is the result of our operators’ aggregate mineral production subject to our stream and royalty interests, net of Voisey’s Bay production, multiplied by metal prices used in our fiscal year 2017 budget, less reported cost of sales, divided by the gold price used in our fiscal year 2017 budget; and
·Our ability to hold costs in line with our budget. The cost containment metric measures our ability to conduct the Company’s business in a cost-efficient manner.
Forty percent of our NEOs’ short-term incentive eligibility depended on the degree to which the Company achieved four strategic objectives: acquiring new streaming and royalty assets, maintaining specific leverage and liquidity levels, continued ability to pay a growing dividend, and satisfactorily resolving investor concerns about our Mount Milligan streaming investment.
Twenty percent of our NEOs’ short-term incentive eligibility depended on each NEO’s performance against multiple unique goals designed to promote each NEO’s superior individual performance and continued development and growth as an executive officer.
The CNG Committee established threshold, target and maximum payouts ranging from zero payout if no threshold measure is achieved, to 100% payout of target if each target measure is achieved, to 200% payout of target if all maximum measures are achieved or exceeded.2020. The CNG Committee defined the target as the mid-pointmidpoint of each NEO’sexecutive’s short-term incentive range (75% to 125% of base salary for the CEO, and 60% to 90% of base salary for all other NEOs). The CNG Committee also established threshold, target, and maximum performance goals that could result in payouts ranging from zero if no threshold goals were achieved, to 100% of an executive’s bonus target if each target goal was achieved, and then to 200% of an executive’s bonus target if each maximum goal was achieved.
Messrs. Jensen and Kirchhoff retired on January 1, 2020, and therefore were not entitled to any payouts under our short-term incentive program for fiscal year 2020. In January 2020, in recognition of Mr. Kirchhoff’s service during fiscal year 2020, the CNG Committee approved a discretionary cash bonus to Mr. Kirchhoff of $177,500 (which amount represented one-half of his short-term incentive awarded for fiscal year 2019).
Table 6 summarizesIn August 2020, the CNG Committee approved discretionary cash bonus to Mr. Heissenbuttel of $50,000 for his leadership during the COVID-19 pandemic. Also in August 2020, taking into account the recommendation of Mr. Heissenbuttel, the CNG Committee approved a discretionary cash bonus to Mr. Isto of $50,000 in recognition of his outstanding effort and extensive contributions to our Peak Gold investment, overall management and monitoring of our existing portfolio of investments, and the development of a virtual technical due diligence program in response to the COVID-19 pandemic.
Some of the weightings described below were different for Messrs. Libner and Shefman for the first half of the fiscal year 2017before they were promoted to NEO positions.
42 ROYAL GOLD, INC.
Proposal 2
FINANCIAL AND OPERATIONAL MEASURES (40%)
40% of executives’ short-term incentive measureswas tied to our performance against three financial and the payout thresholds associated with them.operational measures:
● | Our operating cash flow as a multiple of market capitalization relative to the GDX constituents |
– | Compares our relative market performance against that of our peers |
– | Reflects both financial discipline and the quality and performance of our stream and royalty portfolio |
● | Net GEO production relative to our fiscal year 2020 budget |
– | Compares actual production from our stream and royalty portfolio against our fiscal year 2020 budget |
– | “Net GEO” production represents operators’ aggregate mineral production subject to our stream and royalty interests, multiplied by metal prices used in our fiscal year 2020 budget, less reported cost of sales, divided by the gold price used in our fiscal year 2020 budget |
● | Our ability to hold cash costs in line with our budget (cost containment) |
– | Tests our ability to conduct our business in a cost-efficient manner |
Table 6 — Fiscal Year 2017 Short-Term Incentive ScorecardSTRATEGIC MEASURES (35%)
35% of executives’ short-term incentive was tied to our success against three strategic measures:
● | Deploy capital reasonably expected to generate future GEOs |
● | Exploration advance or monetization of our Peak Gold joint venture in Alaska |
● | Maintain preestablished leverage and liquidity levels |
INDIVIDUAL PERFORMANCE MEASURES (25%)
25% of executives’ short-term incentive was tied to individual performance against multiple unique corporate and personal goals. The goals were generally designed to promote superior individual performance and continue development and growth as an executive, as well as to promote talent development within the organization.
FISCAL YEAR 2020 SHORT-TERM INCENTIVE SCORECARD
Weight | Threshold | Target |
| ||||||
Financial | |||||||||
20% |
|
| 100th percentile | ||||||
10% | 80% of FY | 100% of FY | 120% of FY | ||||||
10% | 10% over FY | Meet FY | 10% under FY | ||||||
Strategic Measures(1) ●Capital deployment to generate GEOs | 20% | Invest capital reasonably expected at the time of commitment to result in the generation of future GEOs at or above threshold, target, maximum amounts | |||||||
|
|
| monetization of our Peak Gold joint venture interest | ||||||
●Financial strength after growing dividend | 5% | ||||||||
|
|
| |||||||
|
| Maintain specified | |||||||
Individual Performance(1) | 25% | Meet individualized corporate and personal development goals | |||||||
Total | 100% |
(1) | The CNG Committee has determined that public disclosure of the specific strategic and individual performance goals could cause competitive harm to us and is not material to an understanding of fiscal year | ||||||||
|
|
| |||||||
|
|
| |||||||
|
| 2020 executive compensation. |
2020 PROXY STATEMENT 43
(1)Table of Contents Working capital changes represent
Proposal 2
SHORT-TERM INCENTIVES WERE AWARDED FOR FISCAL YEAR 2020
In August 2020, the sum of changes in assetsCNG Committee evaluated our corporate performance as measured against each preestablished financial, operational, and liabilities as presented within the operating activities section of the Statement of Cash Flows.
(2)strategic performance measure. The CNG Committee determined that public disclosure of the specific Strategic Objective and Individual Performance goals could cause competitive harm to the Company, and is not material to an understanding of fiscal year 2017 executive compensation.
Short-Term Incentives Were Awarded for Fiscal Year 2017
The CNG Committee, with assistance from management, utilized the scorecard to determine short-term incentive awards for fiscal year 2017 Company and individual performance, as follows:
· The CNG Committee determined the Company’s performance against each Financial, Operational and Strategic Performance measure. The CEO determined each executive officer’s (other than the CEO’s)also evaluated Mr. Heissenbuttel’s performance against his unique Individual Performance measures,individual performance measures. Mr. Heissenbuttel evaluated the performance of our other executives against their individual performance measures. Some numbers in the tables below do not total due to rounding and the CNG Committee determined the CEO’s performance against his Individual Performance measures.
· The scoresprorations for all measures were converted to a percentage of the target achieved and multiplied by the percent weight assigned to each measure. The results were totaled.
mid-year promotions.
Table 7 — Actual Performance Versus Performance Measures for Fiscal Year 2017ACTUAL PERFORMANCE VERSUS PERFORMANCE MEASURES FOR FISCAL YEAR 2020
Measure |
| Result |
| % of Target Achieved |
| Weight |
| Jensen |
| Wenger |
| Heissenbuttel |
| Isto |
| Kirchhoff |
|
OCF vs GDX Constituents |
| .93 |
| 153% |
| 20% |
| 30.7% |
| 30.7% |
| 30.7% |
| 30.7% |
| 30.7% |
|
Net GEO Production |
| 276,128 |
| 113% |
| 10% |
| 11.3% |
| 11.3% |
| 11.3% |
| 11.3% |
| 11.3% |
|
Cost Containment |
| Not Met |
| 0% |
| 10% |
| 0% |
| 0% |
| 0% |
| 0% |
| 0% |
|
Capital Deployment |
| Not Met |
| 0% |
| 15% |
| 0% |
| 0% |
| 0% |
| 0% |
| 0% |
|
Thompson Creek Debt |
| Exceeded |
| 200% |
| 15% |
| 30% |
| 30% |
| 30% |
| 30% |
| 30% |
|
Financial Strength |
| Met |
| 100% |
| 5% |
| 5% |
| 5% |
| 5% |
| 5% |
| 5% |
|
Growing Dividend |
| Met |
| 87% |
| 5% |
| 4.4% |
| 4.4% |
| 4.4% |
| 4.4% |
| 4.4% |
|
Individual Performance |
|
|
|
|
| 20% |
| 20.4% |
| 18.2% |
| 16.5% |
| 18.5% |
| 17.7% |
|
Total Score |
|
|
|
|
| 100% |
| 101.8% |
| 99.6% |
| 97.9% |
| 99.9% |
| 99.1% |
|
The total score was divided by 100 and multiplied by the midpoint of each NEO’s short-term incentive range, as described above. As indicated in Table 8, the NEOs as a group were awarded short-term incentives at approximately the mid-point of their short-term incentive range.
Measure | % of Target Achieved | Weight | Heissenbuttel | Isto | Breeze | Libner | Shefman | |||||||
Operating Cash Flow Multiple vs. | 130% | 20% | 26.0% | 26.0% | 26.0% | 26.0% | 26.0% | |||||||
GDX Constituents | ||||||||||||||
Net GEO Production | 95% | 10% | 9.5% | 9.5% | 9.5% | 9.5% | 9.5% | |||||||
Cost Containment | 200% | 10% | 20.0% | 20.0% | 20.0% | 20.0% | 20.0% | |||||||
Capital Deployment | 50% | 20% | 10.0% | 10.0% | 10.0% | 7.5% | 7.5% | |||||||
Peak Gold JV | 0% | 10% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | |||||||
Financial Strength | 100% | 5% | 5.0% | 5.0% | 5.0% | 5.0% | 5.0% | |||||||
Individual Performance | 25% | 21.6% | 25.0% | 28.8% | 34.2% | 34.5% | ||||||||
Total Score | 100% | 92.0% | 95.5% | 99.2% | 102.2% | 102.4% |
Table 8 — Actual Short-Term Incentive Awards for Fiscal Year 2017ACTUAL SHORT-TERM INCENTIVE AWARDS FOR FISCAL YEAR 2020
|
| Jensen |
| Wenger |
| Heissenbuttel |
| Isto |
| Kirchhoff |
| |||||
Midpoint of Short-Term Incentive Range |
| $ | 720,000 |
| $ | 330,000 |
| $ | 352,500 |
| $ | 267,500 |
| $ | 289,500 |
|
Individual Total Score/100 |
| 1.018 |
| 0.996 |
| 0.979 |
| 0.999 |
| 0.991 |
| |||||
Actual Short-Term Incentive |
| $ | 733,000 |
| $ | 328,000 |
| $ | 345,000 |
| $ | 266,000 |
| $ | 287,000 |
|
Measure | Heissenbuttel | Isto | Breeze | Libner | Shefman | ||||||||||
Target (Midpoint of Short-Term Incentive Range) | $ | 518,500 | $ | 363,750 | $ | 277,500 | $ | 189,892 | $ | 181,612 | |||||
Individual Score | 92.0% | 95.5% | 99.2% | 102.2% | 102.4% | ||||||||||
Actual Short-Term Incentive | $ | 477,000 | $ | 347,000 | $ | 275,000 | $ | 194,000 | $ | 186,000 |
3. LONG-TERM INCENTIVE AWARDS
Our Long-Term Incentives Align Management Objectives with Stockholders’ InterestsOUR LONG-TERM INCENTIVES ALIGN EXECUTIVES’ INTERESTS WITH STOCKHOLDERS’ INTERESTS
Long-term incentive compensation is designed to encourage executive officersexecutives to manage our business for the Company’s business over a multi-year periodlong term by delivering a significant portion of each officer’sexecutive’s potential total direct compensation at a future date.
· The CNG Committee administers the 2015 LTIP by:
· Undertaking a careful risk analysis to assure that executive officers are guided by appropriate incentives while discouraging excessive risk-taking;
· Establishing performance measures and goals designed to align management’s objectives with stockholders’ long-term interests;
· Considering the degree to which financial, operational and strategic goals and objectives have been met; and
· Determining the equity awards for our NEOs each year.
· Annual long-term incentive awards are driven primarily by:
· The Company’sby our achievement of performance goals that are consistent with generatingour strategy and generate long-term returns for stockholders; and
·stockholders. The Company’s overall goalCNG Committee generally tries to maintainset the value of long-term equity awards at an amount that maintains total direct compensation at or near the median of our compensation benchmarking peers.
In administering our long-term incentive program, the CNG Committee undertakes a risk analysis to assure that executives are guided by appropriate incentives without encouraging excessive risk taking.
In general, the CNG Committee grants equity awards annually in August and, in certain cases, in connection with a significant promotion.
We Utilize Three Forms44 ROYAL GOLD, INC.
Table of Equity Awards, Each Serving a Different PurposeContents
Proposal 2
WE USE THREE FORMS OF EQUITY AWARDS, EACH SERVING A DIFFERENT PURPOSE
Stock Options and Stock-Settled Stock Appreciation Rights1. STOCK OPTIONS AND STOCK-SETTLED STOCK APPRECIATION RIGHTS
Stock options and SARs are considered long-term awards, andstock-settled stock appreciation rights (“SARs”) are intended to promote sustainable business results by encouraging management to achieve share price appreciation. A SAR is a right to receive, upon exercise, the excess of the fair market value of one share of stock on the date of exercise over the grant price of the SAR. SARs are settled in shares of the Company’sour common stock. The grant price for stock options and SARs is the closing price of the Company’sour common stock on the NASDAQ Global Select Market on the date of grant. Optionsgrant date. Stock options and SARs have ten-year10-year terms and generally vest in equal annual increments over three years beginning on the first anniversary of the grant.grant date. In some cases, when we grant SARs mid-year as a result of a promotion, the three-year vesting schedule for the award may be tied to the previous annual grant date in August. Once granted, options and SARs are not subject to any future price adjustment.
WeOur U.S.-based executives are typically awardawarded the first $100,000 in value of stock options in the form of incentive stock options (the limit for incentive stock options under the Internal Revenue Code), and amounts above $100,000 are typically awarded in the form of SARs.
Our executives based in Canada and Switzerland typically are awarded the entire value in SARs.
Restricted Stock2. RESTRICTED SHARES
Awards of restricted stock (“RSAs”) and restricted stock units (“RSUs”) focus on retention by securing the long-term commitment of our executives. Restricted stockRSAs and RSUs generally vest in equal annual increments on the third, fourth, and fifth anniversaries of the grant date. In some cases, when we grant RSAs or RSUs mid-year as a result of a promotion, the five-year vesting schedule for the award may be tied to the previous annual grant date of grant.in August.
Shares of restricted stock awarded to ourOur U.S.-based executives receive RSAs, and our executives based in Canada and Switzerland receive RSUs. RSAs are considered issued and outstanding shares of common stock with respect tovoting and dividend rights. RSUs are not issued and outstanding shares upon which executivesthe grantee may vote and receive dividends paid in the ordinary course to other Royal Gold stockholders. RSUs awarded to our Canada-based employees do not entitle the executives to vote or receive dividends, although executives receivedividends; however, grantees are entitled to a cash payment (or dividend equivalent) in the amount of declared dividends at the time dividends are paid.
In addition to service-based vesting requirements for historical restricted stock awards, the CNG Committee introducedRSAs and RSUs granted in August 2019 also contained a performance-based vesting requirement beginning with restricted stock awards made to NEOscondition that provided that no vesting would occur unless we generated net revenue of $280 million or more in August 2012 for fiscal year 2013. For restricted stock awarded before August 2015, all stock underlying an annual award would have been forfeited if the Company failed to meet an Adjusted EBITDA hurdle established for the2020. Net revenue is a non-GAAP measure that is calculated as revenue less cost of sales (which excludes depreciation, depletion, and amortization). We generated net revenue of $415 million in fiscal year for which2020. As a result, the awardperformance-based vesting condition was made. For awards made since August 2015, the CNG Committee requires the Company to achieve the Net Revenue Target before the NEOs become entitled to receive such awards. The CNG Committee reasons that there may be times when the health of the Company does not allow for restricted stock awards or RSUs, and these hurdles establish a threshold below which corporate performance is not sufficient to justify vesting the awards.
met.
Performance Stock3. PERFORMANCE SHARES
Performance stock awardsshares are intended to provide significant incentive to achieve long-term revenue growth and share price appreciation. Performance shares can beare earned only if preestablished performance goals are met within defined measuring periods. If the performance goals are not achieved by the end of the applicable measuring period, the shares are forfeited. expire unvested. In some cases, when we grant performance shares mid-year as a result of a promotion, the measuring period for the award may be tied to the previous annual grant date in August.
Performance shares are not considered issued and outstanding shares with respect toupon which executivesthe grantee may vote or receive dividends, and cannotdividends. Performance shares vest untilonly if the CNG Committee determines that the underlying performance objectivesgoals are met. PerformanceVested performance shares are settled within shares of the Company’sour common stock when they vest.
Performance Shares Awarded Before August 2015
stock.
Performance shares awarded prior to August 2015 for fiscal years 2012 through 2015 may vest upon meeting a single performance goal: 10% compounded annual growth in AFCFPS on a trailing twelve-month basis. Performance shares awarded prior to August 2015 may vest in increments over five years from the grant date. For example, a threshold level of 2.5% growth in compounded AFCFPS is necessary for the minimum vesting of 25% of the performance shares. Maximum vesting is earned with achievement of 10% compounded AFCFPS.
Table 9 shows the amount of performance shares awarded for fiscal years 2012 through 2015 which have vested through July 30, 2017. All performance shares awarded for fiscal year 2012 which did not vest on or prior to June 30, 2017 have lapsed and may not vest. For purposes of ASC 718 recognition of compensation expense, as of June 30, 2017, management determined that it is probable that:
· 0% of the performance shares granted for fiscal year 2013 will vest in future periods;
· 0% of the performance shares granted for fiscal year 2014 will vest in future periods; and
· Remaining 25% of the performance shares granted for fiscal year 2015 will vest in future periods.
Table 9 — Pre-2015 Performance Share Awards: Vesting to June 30, 2017
Awarded |
| Earned in |
| Earned in |
| Earned in |
| Earned in |
| Earned in |
| Earned in |
|
2012 |
| 25% |
| 0% |
| 0% |
| 0% |
| 0% |
| Lapsed on 6/30/2017 |
|
2013 |
| N/A |
| 0% |
| 0% |
| 0% |
| 0% |
| 25% |
|
2014 |
| N/A |
| N/A |
| 0% |
| 0% |
| 0% |
| 25% |
|
2015 |
| N/A |
| N/A |
| N/A |
| 0% |
| 25% |
| 50% |
|
Performance Shares Awarded Beginning in August of each year from 2015 for Fiscal Year 2016
Following its work with Hugessenthrough 2019 remained outstanding and subject to vesting conditions during fiscal year 2015, and in response to stockholder feedback,2020. These awards had the CNG Committee replaced the AFCFPS measure with two new performance share measures. Forfollowing characteristics:
● | GEO Shares – 50% of an executive’s performance shares granted in each year vest only if we grow annual net GEOs between defined threshold and maximum growth levels prior to the end of the fifth fiscal year following the grant date. Growth in annual net GEOs is designed to measure our success in growing our business, whether by acquiring new streams and royalties or reserve expansion by our mine operators. Net GEOs are calculated in the same manner as for short-term incentive awards, as described above. However, due to the five-year vesting period, meeting or exceeding this measure depends on our success in continually acquiring new, revenue-producing stream and royalty assets. Growth by acquisition and reserve expansion is one of our strategic objectives. |
2020 PROXY STATEMENT 45
Proposal 2
● | TSR Shares – 50% of an executive’s performance shares granted in each year vest only if we achieve a total shareholder return (“TSR”) compared to the TSRs of the GDX constituents between defined threshold and maximum levels. TSR Shares are eligible to vest for defined one- and three-year measuring periods. Relative TSR measures the value created for our stockholders over one- and three-year periods. Achieving the highest TSR among our industry peers is one of our strategic objectives. |
Performance shares awarded beginning in August 2015:
· One-half may vest upon the Company’s achievement of annual growth in Net GEO production (“GEO Shares”) between defined threshold and maximum growth levels prior to the end of the fifth fiscal year following the grant date. Annual growth in Net GEO production measures success in growing our business, which is a key strategic objective of the Company. Net GEO production for purposes of determining eligibility to vest performance share awards is calculated in the same manner as for short-term incentive awards; but meeting or exceeding this measure depends upon the Company’s ability to continually acquire new, revenue-producing stream and royalty assets; and
· One-half may vest based on the Company’s achievement of TSR compared to the TSRs of the GDX Constituents (“TSR Shares”) between defined threshold and maximum levels. TSR Shares are eligible to vest for defined one- and three-year measuring periods, and only if the executive remains in continuous service to the Company until the end of the third fiscal year following the grant date. Relative TSR measures the value created for our stockholders over one- and three-year periods.
GEO Shares and TSR Shares may vest by linear interpolation inwithin a range betweenfrom zero shares if neither the threshold GEO and TSR metric goal is met;met, to 100% of GEO Sharesif the target goal is met, and TSR Shares awarded if both the target GEO and TSR metrics are met;then to 200% ofif the GEO Shares and TSR Shares awarded if both the maximum GEO and TSR metrics are goal is met or exceeded.
For all performance shares, the grantee must be in continuous service from the grant date through any vesting date to receive any shares. Any performance shares that remain unvested after the last applicable vesting date will expire unvested.
The specific goals for awarding fiscal year 2016 and fiscal year 2017 performance shares granted in August 2015 through 2019, and the Company’sour results compared to these goals, were:
are presented below:
GEO Shares Goal: Add, within five fiscal years after any grant date, a specific number of Netnet GEOs over the actual Net GEO production achieved in the fiscal year prior to the grant date, excluding Net GEOs attributable to Voisey’s Bay.a set baseline of net GEOs. The CNG Committee established specific threshold, target, and maximum Netnet GEO growth goals for fiscal year 2017.2020. The specific goals are not disclosed here because the CNG Committee has determined that public disclosure of themthe specific goals could cause competitive harm to the Companyus and the figures themselves areis not material to an understanding of the GEO Shares.fiscal year 2020 executive compensation.
Growth in actual Net GEO production volume achieved during each of fiscal years 2016 and 2017 exceeded the number of additional Net GEOs required to vest GEO Shares at the target level for each award. Accordingly, the CNG Committee awarded GEO Shares to the NEOs based on linear interpolation between the target and maximum number of shares eligible for award. Vesting of GEO Sharesshares awarded for fiscal years 2016 and 2017annually in August of 2015 through 2019 is summarized as follows:
below:
Table 10 — GEO Share Vesting through JuneSHARES VESTING THROUGH JUNE 30, 20172020
Grant Date | Cumulative Percentage of Target Net GEO Production as of: | Vesting Result | Cumulative Percentage of Target GEO Shares Vested | |||||
August 2015 | 6/30/2016 | 121% | Between target and maximum | 121% | ||||
6/30/2017 | 190% | Incremental additional shares | 190% | |||||
6/30/2018 | 198% | Incremental additional shares | 198% | |||||
6/30/2019 | 198% | No vesting | 198% | |||||
6/30/2020 | 198% | No vesting – unvested shares expired | 198% | |||||
August 2016 | 6/30/2017 | 107% | Between target and maximum | 107% | ||||
6/30/2018 | 109% | Incremental additional shares | 109% | |||||
6/30/2019 | 109% | No vesting | 109% | |||||
6/30/2020 | 109% | No vesting | 109% | |||||
August 2017 | 6/30/2018 | 0% | No vesting | 0% | ||||
6/30/2019 | 0% | No vesting | 0% | |||||
6/30/2020 | 0% | No vesting | 0% | |||||
August 2018 | 6/30/2019 | 0% | No vesting | 0% | ||||
6/30/2020 | 0% | No vesting | 0% | |||||
August 2019 | 6/30/2020 | 0% | No vesting | 0% |
46 ROYAL GOLD, INC.
Awarded for |
| Cumulative Percentage of |
| Cumulative Percentage of |
| Percentage of Maximum |
|
2016 |
| 190% |
| 190% |
| 5% |
|
2017 |
| 107% |
| 107% |
| 46% |
|
Proposal 2
TSR Shares GoalGoal:: Achieve the highest percent rankpercentile in TSR among the GDX Constituentsconstituents for defined 1-one- and 3-year periods. With respect tothree-year periods:
● | 50% of TSR shares are evaluated for the three-year measuring period ending on June 30 of the third fiscal year after the grant date (“3-year TSR shares”) |
● | 50% of TSR shares are evaluated for vesting in equal one-third increments for each one-year measuring period ending on June 30 of the first, second, and third fiscal years after the grant date (“1-year TSR shares”) |
Vested TSR Shares awarded for a fiscal year:
· One-half will be evaluated for the three-year measuring period ending on June 30shares are settled in shares of the third fiscal year after the grant date (“Three-year TSR Shares”); and
· One-half will be evaluated for vesting in equal one-third increments for each one-year measuring period ending on June 30 of the first, second and third fiscal years after the grant date (“One-year TSR Shares”).
Awards of Three-year TSR Shares and One-year TSR Shares that are determined to vest will be settledcommon stock following June 30 of the third fiscal year after the grant date, when and if the CNG Committee determines that the TSR goal has been met or exceeded. In order to receive any TSR Shares, Executives must remain in continuous service to the Company through the third anniversary of the grant date. In addition, eligibility to vest TSR Shares will lapse as to any that do not vest at the end of their three-year or one-year measuring period.
met.
Table 11 —TSR Share Vesting ThresholdsTSR SHARES VESTING THRESHOLDS
Metric | Total Shareholder Return | Vesting | |||
Threshold | Less than 50th percentile | 0% of target shares awarded | |||
Target | 75th percentile | 100% of target shares awarded | |||
Maximum | 100th percentile | 200% of target shares awarded |
Table 12 summarizes the TSR Shares awarded for fiscal years 2016 and 2017, the Company’s TSR percent rank compared to the GDX Constituents for fiscal years 2016 and 2017, and the determinations of the CNG Committee with respect to such awards.
Table 12 — TSR Share Vesting through JuneSHARES VESTING THROUGH JUNE 30, 20172020
| Tranche |
| CNG Committee | |||||
|
|
| th |
| ||||
|
| Vested by linear interpolation between target and maximum* | ||||||
| 47 | th | Percentile below threshold; shares expired unvested | |||||
1-Year, tranche 3 |
| th |
| Percentile below threshold; shares expired unvested | ||||
|
| th |
| |||||
|
|
| Vested by linear interpolation between | target* | ||||
August 2018 |
| 47 | th | Percentile below threshold; shares expired unvested | ||||
1-Year, tranche 2 |
| rd | Percentile below threshold; shares expired unvested | |||||
1-Year, tranche 3 | N/A | Not yet subject to evaluation | ||||||
|
| Not yet subject to evaluation | ||||||
August 2019 |
|
| th | Percentile below threshold; shares expired unvested | ||||
1-Year, tranche 2 | N/A | Not yet subject to evaluation | ||||||
1-Year, tranche 3 | N/A | Not yet subject to evaluation | ||||||
3-Year | N/A | Not yet subject to evaluation |
* | Vesting subject to grantee meeting the three-year continuous service requirement. |
2020 PROXY STATEMENT 47
* Vesting is subject to recipient meeting the continuous employment requirement.
ADDITIONAL INFORMATION ABOUTProposal 2
THE CNG COMMITTEE LEADS THE ANNUAL EXECUTIVE COMPENSATION PROCESS, WITH INVOLVEMENT FROM ITS INDEPENDENT COMPENSATION CONSULTANT AND MANAGEMENT
ROLES AND RESPONSIBILITIES IN THE ANNUAL EXECUTIVE COMPENSATION PROCESS
CNG Committee | ●Consists of three independent directors in accordance with securities, tax, and listing rules ●Oversees administration of policies governing executive compensation ●Reviews stockholder feedback and trends in executive compensation design ●Reviews and sets compensation philosophy, objectives, and design and reviews any updates or changes with the Board annually ●Ensures alignment with strategic goals and stockholder value through establishment of performance measures and goals consistent with our strategy and long-term value creation for stockholders ●Determines whether performance measures are met ●Conducts annual assessment of CEO performance, with input from all independent directors ●Determines CEO compensation without the presence of CEO or other management ●Considers, without being bound by, input from independent compensation consultant and CEO on NEO compensation ●Determines NEO compensation with input from the CEO | |
Management | ●Provides input to CNG Committee on strategy and program design ●Develops initial recommendations for short- and long-term incentives based on achievement of performance measures | |
Independent Compensation Consultant | ●Retained annually by the CNG Committee; independence determined annually by CNG Committee ●Performs work at direction and under supervision of the CNG Committee ●Provides expertise on compensation design, market practices, peer group construction, and benchmarking ●Benchmarks NEO and director compensation in alternating years ●Provides in-depth review of and recommendations for compensation framework and design |
The CNG Committee commissions external reviews of executive and director compensation in alternating years to balance consulting costs with the need to achieve consistency with market compensation practices. In early 2019, the CNG Committee engaged Hugessen as its independent compensation consultant to conduct an updated executive compensation benchmarking study for purposes of setting fiscal year 2020 executive compensation. Hugessen provided its benchmarking study in May 2019, which was supplemented by the CNG Committee and management and then further validated by Hugessen.
The CNG Committee assessed the independence of its compensation consultant under Nasdaq listing standards and SEC rules and concluded that no conflict of interest existed that would have prevented the compensation consultant from serving as an independent consultant to the CNG Committee.
The compensation consultant reports directly to the Committee and did not provide any services to management in fiscal year 2020.
The CNG Committee or the Board is responsible for making all equity grants. Our management does not have the authority to make any equity grants.
48 ROYAL GOLD, INC.
Proposal 2
WE ESTABLISH A RELEVANT COMPARATOR GROUP AND CONDUCT EXECUTIVE COMPENSATION BENCHMARKING
WE SELECT BENCHMARKING PEERS THAT MATCH OUR INDUSTRY, BUSINESS MODEL, AND MARKET CAP
The CNG Committee reviews and selects executive compensation peers based primarily on similar industry profile and size as measured by market capitalization. Our compensation peer group includes our closest direct streaming and royalty competitors, while the remainder of the group includes comparably sized gold and silver mining companies.
ROYAL GOLD PEER GROUP
Company | Primary Industry | Market Capitalization as of June 30, 2020 ($ in millions) | ||
Agnico Eagle Mines Limited | Gold | 15,410 | ||
B2Gold Corporation | Gold | 5,911 | ||
Centerra Gold Inc. | Gold | 3,241 | ||
Eldorado Gold Corporation | Gold | 1,611 | ||
Franco-Nevada Corporation | Gold | 26,483 | ||
IAMGOLD Corporation | Gold | 1,875 | ||
Kinross Gold Corporation | Gold | 9,063 | ||
Osisko Gold Royalties | Gold | 1,646 | ||
Pan American Silver Corp. | Silver | 6,365 | ||
Wheaton Precious Metals Corporation | Silver | 19,681 | ||
Yamana Gold Corporation | Gold | 5,163 | ||
75th Percentile | 12,236 | |||
Median | 5,911 | |||
25th Percentile | 2,558 | |||
Average | 8,768 | |||
Royal Gold, Inc. | Gold | 8,153 | ||
Percentile | P64 |
Data source: S&P CapitalIQ
This is the same peer group as we used for fiscal year 2019 executive compensation, except that we made the following changes to account for merger and acquisition activity or to better align Royal Gold within the collective peer group based on market capitalization: (1) removed Coeur Mining, Inc., Hecla Mining Company, and New Gold Inc. and (2) added Osisko Gold Royalties, Yamana Gold Corporation, and Kinross Gold Corporation.
WE COMPARE OUR EXECUTIVE OFFICER COMPENSATION PROGRAMAGAINST OUR BENCHMARKING PEERS
For fiscal year 2020, the CNG Committee reviewed and considered peer data on several compensation elements, including base salary, short-term incentives, long-term incentives, and total direct compensation, as described above.
2020 PROXY STATEMENT 49
Proposal 2
KEY COMPENSATION POLICIES AND PRACTICES
EMPLOYMENT AGREEMENTS
Royal GoldWe have entered into employment agreements with each of its NEOs effective July 1, 2016, supersedingour NEOs. Under these agreements, we offer certain post-employment payments and replacingbenefits to our executives upon the occurrence of specified events. We believe these arrangements better enable us to offer competitive total compensation packages to our executives and promote the ongoing retention of these executives when considering potential transactions that may create uncertainty as to their future employment with us. None of the employment agreements entered intoprovide for excise tax gross-ups in September 2013. Pursuant to a change of control.
CEO EMPLOYMENT AGREEMENTMr. Jensen’s
Our employment agreement with Mr. JensenHeissenbuttel provides that he will continue to serve as the Company’sour President and Chief Executive Officer,CEO and the Company’sthat our Board of Directors will continue to nominate Mr. Jensenhim for re-electionreelection as Director. Pursuant to individual employment agreements, Messrs. Heissenbuttel, Isto, Kirchhoffa director. The agreement has a one-year term beginning on January 2, 2020, and Wenger will continue to serve as the Company’s Vice President Corporate Development, Vice President Operations, Vice President, General Counsel and Secretary, and Chief Financial Officer and Treasurer, respectively. The employment agreements are for one-year terms, renew automatically renews for four consecutive one-year periods and will expire on June 30, 2021, unless either the Company or the executiveparty timely elects notfor nonrenewal. Under the agreement, Mr. Heissenbuttel is entitled to renew the terman annual base salary of the$650,000, which may be increased annually as determined by our Board or CNG Committee. Mr. Heissenbuttel is also eligible to participate in our annual bonus and long-term equity programs, as well as other employee benefits made available to similarly situated executives. Mr. Heissenbuttel is entitled to severance benefits in connection with a termination of employment agreement. Asor a change of control as described below under the heading “Potential Payments uponUpon Termination or Change of Control (page 43), each” on page 59.
Mr. Heissenbuttel is prohibited from competing against us or soliciting our employees, customers, or business relationships for 12 months following termination of his employment.
OTHER NEO EMPLOYMENT AGREEMENTS
We have entered into an employment agreement provideswith each of our other current NEOs. The agreements for Messrs. Isto and Breeze are between these executives and our wholly owned subsidiaries, Royal Gold Corporation and RGLD Gold AG, respectively. Mr. Breeze’s agreement began on January 1, 2019, and has an indefinite term. The agreements with Messrs. Isto, Libner, and Shefman have a one-year term beginning on January 2, 2020, and automatically renew for four consecutive one-year periods unless either party timely elects for nonrenewal. Each executive is entitled to an annual base salary as originally set by the CNG Committee as described above, which salary may be increased annually as determined by our Board or CNG Committee. Each executive is also eligible to participate in our annual bonus and long-term equity programs, as well as other employee benefits made available to similarly situated executives. Each executive is entitled to severance compensationbenefits in certain events. Noneconnection with a termination of employment or a change of control as described below under “Potential Payments Upon Termination or Change of Control” on page 59.
Each executive is prohibited from competing against us or soliciting our employees, customers, or business relationships for 12 months following termination of his employment.
RETIREMENT AGREEMENTS
JENSEN RETIREMENT AGREEMENT
We entered into a retirement agreement with Mr. Jensen in connection with his retirement on January 1, 2020. Under the agreement, Mr. Jensen is prohibited from competing against us or soliciting our employees, customers, or business relationships for 24 months following termination of his employment. In recognition of Mr. Jensen’s long, successful, and distinguished service to Royal Gold and our Board, the CNG Committee approved that all time-vested equity awards held by Mr. Jensen on January 1, 2020, became fully vested and all performance shares held by Mr. Jensen on January 1, 2020, remained eligible to vest based on attainment of the employment agreements providesapplicable performance criteria through fiscal year 2021. Specifically, stock options representing 1,238 shares, SARs representing 25,958 shares, and restricted stock representing 27,032 shares received accelerated vesting. In addition, performance
50 ROYAL GOLD, INC.
Proposal 2
shares representing 35,881 shares (at maximum potential payout) continued to vest subject to attainment of the applicable performance criteria. In approving Mr. Jensen’s retirement benefits, the CNG Committee considered the following:
● | Mr. Jensen’s planned retirement followed a long period of successful and distinguished service to Royal Gold and the Board and took account of thoughtful succession planning. |
● | The CNG Committee reviewed alternatives to recognize Mr. Jensen’s service and the outstanding performance of Royal Gold stock during his 16-year tenure. |
● | Mr. Jensen agreed to additional noncompetition restrictions as described above. |
● | Mr. Jensen did not receive any equity grants for fiscal year 2020. |
● | Mr. Jensen would not receive any value from the continued vesting of performance shares unless the applicable performance criteria relating to relative TSR and GEOs were met during fiscal year 2020 or 2021 as part of his TSR and GEO performance shares granted in August 2017 and August 2018. |
● | Mr. Jensen did not receive any cash severance in connection with his retirement. |
KIRCHHOFF RETIREMENT AGREEMENT
We entered into a retirement agreement with Mr. Kirchhoff in connection with his retirement on January 1, 2020. Under the agreement, Mr. Kirchhoff is prohibited from competing against us or soliciting our employees, customers, or business relationships for excise tax gross-ups12 months following termination of his employment. In recognition of Mr. Kirchhoff’s dedicated service to Royal Gold and our Board, the CNG Committee approved a cash bonus of $177,500 to Mr. Kirchhoff recognizing his service during fiscal year 2020 (which amount represented one-half of his short-term incentive awarded for change-in-control provisions.fiscal year 2019) and the accelerated vesting of certain unvested equity awards held by Mr. Kirchhoff on January 1, 2020. Specifically, stock options representing 1,239 shares, SARs representing 6,262 shares, and performance shares representing 271 shares, all of which were originally scheduled to vest in August 2020 or August 2021, received accelerated vesting. Mr. Kirchhoff did not receive any cash severance in connection with his retirement.
BENEFIT PROGRAMS
Benefit programs for the executive officersour executives are common in design and purpose to those forthe programs offered all of our employees in the United States andU.S., Canada, and include an opportunity toSwitzerland. Executives can also participate in various health and welfare benefit programs.programs to the extent appropriate in the country of employment under applicable laws. We share the cost of certain health and retirement benefit programs with our employees. The CompanyWe also maintainsprovide, directly or indirectly, retirement plans for our US and Canadian Employees.employees. The USU.S. plan is a Salary Reduction/Simplified Employee Pension Plan (“SARSEP Plan”), in which all USU.S. employees are eligible to participate. The Canadian plan is a Group Registered Retirement Savings Plan (“Group RRSP”), in which all Canadian employees are eligible to participate. The SARSEP Plan and Group RRSP are voluntary plans. The plan for Swiss employees is regulated by Swiss statutes, is mandated for all Swiss employees within defined limits, and provides for employees’ retirement, survivors, and disability insurance (“Pension Plan”).
The SARSEP Plan and Group RRSP allow employees to reduce their pre-tax salary, subject to certain regulatory limitations, and to put this money into a tax deferredtax-deferred investment plan. The CompanyWe may make non-elective contributions to the employee’s SARSEP Plan and Group RRSP up to 7% of an individual’s annual salary and short-term incentive, subject to limits. Those that do not participate inEmployer contributions to the employee’s SARSEP Plan andor Group RRSP receive a 3% employer contribution in accordance with the respective plan rules. Employer contributions are immediately 100% vested. Total employee and employer contributions to the SARSEP Plan and Group RRSP are subject to annual regulatory limitations.
Our Swiss subsidiary pays approximately 50% of the contributions to the Pension Plan according to the applicable regulations of the pension scheme provider. The contribution due is a percentage of the relevant covered salary and depends on the age of the Swiss employee.
PERQUISITES
The CompanyWe do not generally does not provide perquisites or other special benefits to executive officers.executives.
2020 PROXY STATEMENT 51
Proposal 2
EXECUTIVE STOCK OWNERSHIP GUIDELINES
Royal Gold’sOur stock ownership requirements encourage its NEOsour executives to achieve and maintain a minimum investment in the Company’s common stock at levels set by the CNG Committee. The requirement incentivizes our NEOsstock. We believe these requirements incentivize our executives to focus on improving long-term stockholder value and alignsalign the interests of management and stockholders andstockholders. The requirement is set as a number of shares that is equivalent to a multiple of his or herthe executive’s base salary. Unexercised stock options and SARs unvested shares of restricted stock and unearned performance shares are not considered owned for purposes of the program.requirements.
There is no timeframe in which the NEOsexecutives must meet ownership targets. The program also requires each NEO toEach executive must hold an aggregate of fifty percent (50%)50% of the shares of stock acquired pursuant tounder any equity grant, of options, SARs, restricted stock or performance stock, net of any shares withheld or sold to cover withholding taxes, until suchthe executive officer reaches his or her ownership target. Mr. Isto became an NEO in fiscal year 2017 and is currently acquiring the shares necessary to meet the ownership requirements. All otherrequirement. As shown in the table below, all of our current NEOs are in compliance with the ownership requirements, (see Table 13 below, calculated asother than Mr. Breeze who joined Royal Gold at the beginning of September 19, 2017).
In order to align the interests of management and stockholders, Royal Gold’s policy precludes NEOs from hedging against their investments in the Company’s common stock. Further, NEOs are restricted from pledging their investments in the Company’s common stock.
2019.
Table 13 — NEO Stock Ownership SummaryEXECUTIVE STOCK OWNERSHIP GUIDELINES
| Guideline Value of Common | Actual Value Owned as of | |||
| 4x Salary |
| |||
| 2x Salary |
| |||
| 2x Salary |
| |||
| 2x Salary |
| |||
| 2x Salary |
|
TAX DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986, as amended, imposes a limit onlimits the amount that a public company maycan deduct for compensation paid to certain covered executives in any one yearexcess of $1 million. Prior to 2018, the Company’s Chief Executive Officer and certain other NEOs. The limitation doesdid not apply to certain performance-based compensation. This performance-based exception was repealed for awards granted after November 2, 2017, such that total compensation that meetspaid to covered executives in excess of $1 million is not tax deductible, unless the requirements under Section 162(m)excess qualifies for “qualifying performance based” compensation. The Company and the CNG Committee review and consider the deductibility ofcertain grandfather provisions. Going forward, we expect that executive compensation under Section 162(m).will not be fully deductible for income tax purposes. The CNG Committee usually seeksintends to satisfymaintain the requirements necessary to allowpay-for-performance alignment of our incentive compensation programs and believes the interests of our stockholders are best served by not limiting the CNG Committee’s discretion and flexibility in crafting compensation of its named executive officers to be deductible under Section 162(m) of the Internal Revenue Code, but has discretion to approveplans and arrangements, even though some compensation that is not deductible under Section 162(m).
awards may result in non-deductible compensation expenses.
POST-TERMINATION COMPENSATION
The Company doesWe do not provide pension or other retirement benefits apart from the SARSEP Plan, Group RRSP Plan, and Pension Plan, each described above. The Company providesWe provide certain post-termination benefits pursuant to the terms of the LTIPour equity incentive plan and the employment agreements described above under “Employment Agreements”“Employment Agreements” on page 3650 and below under the section titled “Potential“Potential Payments uponUpon Termination or Change of Control”Control” on page 43.59. None of the employment agreements provide for excise tax gross-ups for change-in-control provisions.
in a change of control.
RISK ASSESSMENT OF COMPENSATION POLICIES AND PRACTICES
The Company’sOur executive compensation program is designed to support itsour ability to recruit, retain, and reward high-performing executive officersexecutives who will drive growth, profitability, and increased long-term stockholder value, while managing the CompanyRoyal Gold responsibly over both the long- and short-term and while maintaining the Company’s excellentour strong reputation. The CNG Committee believes that the Company’sour executive compensation is an appropriate balance of competitive salary and attractive short- and long-term incentives that:that (a) are based uponon achievement of many of the same performance measures used by theour Board of Directors to chart our corporate strategy and evaluate the Company’sour success in achieving that strategy; (b) utilizeuse multiple performance measures to avoid placing excessive emphasis on any single measure; and (c) provide opportunity to earn significantly higher-than-target compensation over the long term through consistent superior corporate and individual performance. Management and the CNG Committee believe the totalour executive compensation program provides strong incentives to manage for the long term while avoiding excessive risk-takingrisk taking in the short term.
52 ROYAL GOLD, INC.
Table of Contents SUMMARY COMPENSATION TABLE The following table provides information regarding the 2020 PROXY STATEMENT 53 Name and Year Salary Bonus Non-Equity Stock Option All Other Total Principal Position (fiscal) ($) ($) ($) ($) ($) ($) ($) Tony Jensen 2017 720,000 — 733,000 1,172,404 638,386 31,389 3,295,179 President and Chief 2016 700,000 — 750,000 1,326,022 779,328 32,436 3,587,786 Executive Officer 2015 650,000 1,000,000 (4) 675,000 1,612,836 822,598 32,677 4,118,111 Stefan Wenger 2017 440,000 — 328,000 475,639 258,648 37,214 1,539,501 Chief Financial Officer 2016 425,000 — 345,000 512,536 301,214 36,036 1,619,786 and Treasurer 2015 385,000 — 320,000 624,690 323,747 37,408 1,690,845 William Heissenbuttel 2017 470,000 — 345,000 486,947 265,195 38,389 1,605,531 Vice President 2016 450,000 100,000 (5) 365,000 542,813 319,030 36,436 1,813,278 Corporate Development 2015 400,000 — 335,000 624,690 323,747 36,083 1,719,520 Mark Isto(6) 2017 350,000 — 266,000 426,390 232,162 13,446 1,287,998 VP Operations Bruce C. Kirchhoff 2017 386,000 — 287,000 399,907 217,282 31,074 1,321,263 Vice President, General 2016 375,000 — 305,000 451,883 265,600 31,211 1,428,694 Counsel and Secretary 2015 360,000 — 295,000 624,690 323,747 31,733 1,635,170 2017 Proposal 2potential compensation of the Company’sour NEOs for fiscal years 2017, 20162020, 2019, and 2015.2018.Name and Principal Position Year
(Fiscal) Salary
($) Bonus
($) Non-Equity
Incentive Plan
Compensation
($) Stock
Awards(1)
($) Option
Awards(2)
($) All Other
Compensation(3)
($) Total
($)Current NEOs William Heissenbuttel 2020 583,000 50,000 477,000 842,551 413,142 37,863 2,403,556 President and CEO 2019 502,000 — 432,000 539,175 278,755 32,784 1,784,714 2018 485,000 — 355,000 558,778 295,351 37,370 1,731,499 Mark Isto(4) 2020 473,500 50,000 347,000 559,782 269,671 34,116 1,734,069 EVP and Chief 2019 430,000 — 366,000 465,306 240,416 33,387 1,535,109 Operating Officer
Royal Gold Corporation2018 390,000 — 276,000 524,531 277,374 30,601 1,498,506 Daniel Breeze(5) 2020 370,000 — 275,000 406,475 194,594 35,340 1,281,409 VP Corporate Development 2019 175,000 — 151,000 214,248 100,065 17,119 657,432 RGLD Gold AG Paul Libner 2020 308,650 — 194,000 288,800 142,852 33,718 968,020 CFO and Treasurer Randy Shefman 2020 295,250 — 186,000 257,108 126,225 26,849 891,432 VP and General Counsel Former NEOs Tony Jensen(6) 2020 411,000 — — — — 3,730,033 4,141,033 Former President and CEO 2019 800,000 — 900,000 1,408,258 732,791 33,939 3,874,988 2018 750,000 — 750,000 1,552,322 820,850 32,738 3,905,910 Bruce Kirchhoff(7) 2020 213,000 177,500 — 415,502 193,788 243,650 1,243,440 Former VP, General 2019 414,000 — 355,000 385,741 198,662 32,686 1,386,089 Counsel, and Secretary 2018 400,000 10,000 289,000 434,655 229,864 32,171 1,395,690 (1) Amounts represent the grant date fair value of restricted shares and performance shares granted during the applicable fiscal year, calculated in accordance with financial statement reporting rules. You can find information about the assumptions used to calculate grant date fair values in Note 8 to our consolidated financial statements contained in our 2020 Annual Report on Form 10-K for the year ended June 30, 2020. Performance shares are shown at 100% of target performance. The grant date fair values of the performance shares, assuming target and maximum performance, were as follows: Grant Date Fair Value of
Performance Award Name At Target
($) At Maximum
($)William Heissenbuttel $ 385,602 $ 771,204 Mark Isto $ 256,246 $ 512,492 Daniel Breeze $ 185,933 $ 371,866 Paul Libner $ 132,089 $ 264,178 Randy Shefman $ 117,354 $ 234,708 Bruce Kirchhoff $ 189,976 $ 379,952 (2) Amounts represent the grant date fair value of stock options and SARs granted during the applicable fiscal year, calculated in accordance with financial statement reporting rules. You can find information about the assumptions used to calculate grant date fair values in Note 8 to our consolidated financial statements contained in our 2020 Annual Report on Form 10-K for the year ended June 30, 2020.
Incentive Plan
Compensation
Awards(1)
Awards(2)
Compensation(3)(1) Amounts shown reflect the total grant date fair valueTable of restricted stock awards and performance stock awards, determined in accordance with ASC 718, made during fiscal years 2017, 2016 and 2015. Performance stock awards made in fiscal year 2017 are shown at 100% of target performance. The fair value of the performance stock awards on the date of grant made during fiscal year 2017 assuming target and highest level of payout of performance shares, was as follows:Contents
Proposal 2
|
| Grant Date Value of Performance Award |
| ||
Name |
| At Target ($) |
| At Maximum ($) |
|
Tony Jensen |
| 540,233 |
| 1,080,466 |
|
Stefan Wenger |
| 219,106 |
| 438,212 |
|
William Heissenbuttel |
| 224,583 |
| 449,166 |
|
Mark Isto |
| 196,510 |
| 393,020 |
|
Bruce C. Kirchhoff |
| 184,186 |
| 368,372 |
|
Amounts shown do not represent cash payments made to the individuals, amounts realized or amounts that may be realized. Refer to Note 7 to the Company’s consolidated financial statements contained in the Company’s 2017 Annual Report on Form 10-K filed with the SEC on August 10, 2017, for a discussion on the valuation of the restricted stock and performance stock awards.
(2) Amounts shown reflect the total grant date fair value of stock options and SARs, determined in accordance with ASC 718 using the Black-Scholes-Merton option-pricing model, awarded during fiscal years 2017, 2016 and 2015. Amounts shown do not represent cash payments made to the individuals, amounts realized or amounts that may be realized. Refer to Note 7 to the Company’s consolidated financial statements contained in the Company’s 2017 Annual Report on Form 10-K filed with the SEC on August 10, 2017, for a discussion of the assumptions used in valuation of stock option and SARs awards.
(3) All Other Compensation includes the following:
Name |
| Year |
| Employer |
| Life and Accidental |
| Long-Term |
| Total |
| ||||
Tony Jensen |
| 2017 |
| $ | 29,700 |
| $ | 864 |
| $ | 825 |
| $ | 31,389 |
|
|
| 2016 |
| $ | 30,750 |
| $ | 861 |
| $ | 825 |
| $ | 32,436 |
|
|
| 2015 |
| $ | 30,994 |
| $ | 858 |
| $ | 825 |
| $ | 32,677 |
|
Stefan Wenger |
| 2017 |
| $ | 35,525 |
| $ | 864 |
| $ | 825 |
| $ | 37,214 |
|
|
| 2016 |
| $ | 34,350 |
| $ | 861 |
| $ | 825 |
| $ | 36,036 |
|
|
| 2015 |
| $ | 35,725 |
| $ | 858 |
| $ | 825 |
| $ | 37,408 |
|
William Heissenbuttel |
| 2017 |
| $ | 36,700 |
| $ | 864 |
| $ | 825 |
| $ | 38,389 |
|
|
| 2016 |
| $ | 34,750 |
| $ | 861 |
| $ | 825 |
| $ | 36,436 |
|
|
| 2015 |
| $ | 34,400 |
| $ | 858 |
| $ | 825 |
| $ | 36,083 |
|
Mark Isto |
| 2017 |
| $ | 10,278 |
| $ | 1,656 |
| $ | 1,512 |
| $ | 13,446 |
|
Bruce C. Kirchhoff |
| 2017 |
| $ | 29,385 |
| $ | 864 |
| $ | 825 |
| $ | 31,074 |
|
|
| 2016 |
| $ | 29,525 |
| $ | 861 |
| $ | 825 |
| $ | 31,211 |
|
|
| 2015 |
| $ | 30,050 |
| $ | 858 |
| $ | 825 |
| $ | 31,733 |
|
(4) Mr. Jensen’s fiscal year 2015 award included a cash award of $1,000,000 as special recognition of his exceptional business development efforts during fiscal year 2015, which led to execution of three significant transactions in the first several weeks of fiscal year 2016.
(5) Represents a cash award of $100,000 as special recognition of Mr. Heissenbuttel’s extraordinary performance in overseeing the acquisition of the Company’s new streaming interests in addition to a further royalty interest in one of the Company’s existing development projects, during the first quarter of fiscal year 2016.
(6) Mr. Isto was not considered a Named Executive Officer until fiscal year 2017. Mr. Isto’s salary and non-equity incentive plan compensation are paid in Canadian Dollars. The amounts shown are the applicable United States Dollar equivalent.
The Company provides a SARSEP Plan (US employees) or Group RRSP (Canadian employees) and life and disability benefits to all of its employees. The Company matches employee contributions to the SARSEP Plan and Group RRSP, up to 7% of an individual’s aggregate annual salary and short-term incentive, subject to limits (see Benefit Programs on page 36).
(3) | Amounts for fiscal year 2020 include the following: |
Name | Employer Retirement Plan Contributions ($) | Life and Disability Insurance Premiums ($) | Long-Term Disability Insurance Premiums ($) | Retirement Benefits* ($) | Total All Other Compensation ($) | ||||||
William Heissenbuttel | 36,180 | 858 | 825 | — | 37,863 | ||||||
Mark Isto | 29,675 | 2,236 | 2,205 | — | 34,116 | ||||||
Daniel Breeze | 35,340 | — | — | — | 35,340 | ||||||
Paul Libner | 32,035 | 858 | 825 | — | 33,718 | ||||||
Randy Shefman | 25,166 | 858 | 825 | — | 26,849 | ||||||
Tony Jensen | 3,000 | 429 | 413 | 3,726,191 | 3,730,033 | ||||||
Bruce Kirchhoff | 16,470 | 429 | 413 | 226,338 | 243,650 |
* | Retirement benefits for Mr. Jensen include 3,695,630 for the value of accelerated vesting of equity, calculated in accordance with financial statement reporting rules, and $30,561 in other retirement benefits. Retirement benefits for Mr. Kirchhoff include $210,777 for the value of accelerated vesting of equity, calculated in accordance with financial statement reporting rules, and $15,561 in other retirement benefits. |
(4) | Mr. Isto’s cash compensation is paid in Canadian dollars. The amounts shown are the U.S. dollar equivalent. For fiscal year 2020, we used a conversion rate of 0.76 for salary and 0.75 for non-equity incentive plan compensation and bonus. |
(5) | Mr. Breeze was hired on January 1, 2019. Mr. Breeze’s cash compensation is paid in Swiss francs. The amounts shown are the U.S. dollar equivalent. For fiscal year 2020, we used a conversion rate of 1.00 for salary, non-equity incentive plan compensation, and bonus. |
(6) | Mr. Jensen retired on January 1, 2020. |
(7) | Mr. Kirchhoff retired on January 1, 2020. |
GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR 20172020
This table provides information regarding incentive awards and other stock-based awards granted to or modified for our NEOs during fiscal year 2017 to the NEOs.2020.
Name | Award | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units(3) (#) | All Other Option Awards: Number of Securities Underlying Options(4) (#) | Exercise or Base Prices of Option Awards ($/sh) | Grant Date Fair Value of Stock and Option Awards(5) ($) | ||||||||||||
Target ($) | Maximum ($) | Target (#) | Maximum (#) | |||||||||||||||||
William | Annual | |||||||||||||||||||
Heissenbuttel | incentive | N/A | 518,500 | 1,037,000 | ||||||||||||||||
PS | 8/13/19 | 2,630 | 5,260 | 265,764 | ||||||||||||||||
PS | 1/2/20 | 1,220 | 2,440 | 119,839 | ||||||||||||||||
RSA | 8/13/19 | 2,530 | 315,238 | |||||||||||||||||
RSA | 1/2/20 | 1,170 | 141,710 | |||||||||||||||||
ISO/SAR | 8/13/19 | 7,810 | 124.60 | 277,699 | ||||||||||||||||
SAR | 1/2/20 | 3,910 | 121.12 | 135,444 | ||||||||||||||||
Mark Isto | Annual | |||||||||||||||||||
incentive | N/A | 363,750 | 727,500 | |||||||||||||||||
PS | 8/13/19 | 2,390 | 4,780 | 241,511 | ||||||||||||||||
PS | 1/2/20 | 150 | 300 | 14,734 | ||||||||||||||||
RSU | 8/13/19 | 2,300 | 286,580 | |||||||||||||||||
RSU | 1/2/20 | 140 | 16,957 | |||||||||||||||||
SAR | 8/13/19 | 7,100 | 124.60 | 253,044 | ||||||||||||||||
SAR | 1/2/20 | 480 | 121.12 | 16,627 |
54 ROYAL GOLD, INC.
|
|
|
| Estimated Future Payouts Under |
| All Other |
| All Other |
| Exercise or |
| Grant Date |
| ||||
|
|
|
| Threshold |
| Target |
| Maximum |
| Units(2) |
| Options(3) |
| Awards(4) |
| Awards(5) |
|
Name |
| Grant Date |
| (#) |
| (#) |
| (#) |
| (#) |
| (#) |
| ($/sh) |
| ($) |
|
Tony Jensen |
| 8/16/2016 |
| — |
| 7,890 |
| 15,780 |
|
|
|
|
|
|
| 540,233 |
|
|
| 8/16/2016 |
|
|
|
|
|
|
| 7,590 |
|
|
|
|
| 632,171 |
|
|
| 8/16/2016 |
|
|
|
|
|
|
|
|
| 21,460 |
| 83.29 |
| 638,457 |
|
Stefan Wenger |
| 8/16/2016 |
| — |
| 3,200 |
| 6,400 |
|
|
|
|
|
|
| 219,106 |
|
|
| 8/16/2016 |
|
|
|
|
|
|
| 3,080 |
|
|
|
|
| 256,533 |
|
|
| 8/16/2016 |
|
|
|
|
|
|
|
|
| 8,700 |
| 83.29 |
| 258,673 |
|
William Heissenbuttel |
| 8/16/2016 |
| — |
| 3,280 |
| 6,560 |
|
|
|
|
|
|
| 224,583 |
|
| 8/16/2016 |
|
|
|
|
|
|
| 3,150 |
|
|
|
|
| 262,363 |
| |
|
| 8/16/2016 |
|
|
|
|
|
|
|
|
| 8,920 |
| 83.29 |
| 265,221 |
|
Mark Isto |
| 8/16/2016 |
| — |
| 2,870 |
| 5,740 |
|
|
|
|
|
|
| 196,510 |
|
|
| 8/16/2016 |
|
|
|
|
|
|
| 2,760 |
|
|
|
|
| 229,880 |
|
|
| 8/16/2016 |
|
|
|
|
|
|
|
|
| 7,810 |
| 83.29 |
| 232,183 |
|
Bruce C. Kirchhoff |
| 8/16/2016 |
| — |
| 2,690 |
| 5,380 |
|
|
|
|
|
|
| 184,186 |
|
| 8/16/2016 |
|
|
|
|
|
|
| 2,590 |
|
|
|
|
| 215,721 |
| |
|
| 8/16/2016 |
|
|
|
|
|
|
|
|
| 7,310 |
| 83.29 |
| 217,301 |
|
(1) Represents performance stock awards, TSR Shares and GEO Shares, which will vest upon achievementTable of target performance or market objectivesContents
Proposal 2
Name | Award | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units(3) (#) | All Other Option Awards: Number of Securities Underlying Options(4) (#) | Exercise or Base Prices of Option Awards ($/sh) | Grant Date Fair Value of Stock and Option Awards(5) ($) | ||||||||||||
Target ($) | Maximum ($) | Target (#) | Maximum (#) | |||||||||||||||||
Daniel | Annual | |||||||||||||||||||
Breeze | incentive | N/A | 277,500 | 555,000 | ||||||||||||||||
PS | 8/13/19 | 1,840 | 3,680 | 185,933 | ||||||||||||||||
RSU | 8/13/19 | 1,770 | 220,542 | |||||||||||||||||
SAR | 8/13/19 | 5,460 | 124.60 | 194,594 | ||||||||||||||||
Paul | Annual | |||||||||||||||||||
Libner | incentive | N/A | 189,892 | 379,784 | ||||||||||||||||
PS | 8/13/19 | 860 | 1,720 | 86,904 | ||||||||||||||||
PS | 1/2/20 | 460 | 920 | 45,185 | ||||||||||||||||
RSA | 8/13/19 | 830 | 103,418 | |||||||||||||||||
RSA | 1/2/20 | 440 | 53,293 | |||||||||||||||||
SAR | 8/13/19 | 2,560 | 124.60 | 91,238 | ||||||||||||||||
SAR | 1/2/20 | 1,490 | 121.12 | 51,614 | ||||||||||||||||
Randy | Annual | |||||||||||||||||||
Shefman | incentive | N/A | 181,612 | 363,224 | ||||||||||||||||
PS | 8/13/19 | 860 | 1,720 | 86,904 | ||||||||||||||||
PS | 1/2/20 | 310 | 620 | 30,451 | ||||||||||||||||
RSA | 8/13/19 | 830 | 103,418 | |||||||||||||||||
RSA | 1/2/20 | 300 | 36,336 | |||||||||||||||||
SAR | 8/13/19 | 2,560 | 124.60 | 91,238 | ||||||||||||||||
SAR | 1/2/20 | 1,010 | 121.12 | 34,987 | ||||||||||||||||
Tony | Annual | |||||||||||||||||||
Jensen | incentive | N/A | 822,000 | 1,644,000 | ||||||||||||||||
Retirement | ||||||||||||||||||||
modification(6) | 1/1/2020 | 3,695,630 | ||||||||||||||||||
Bruce | Annual | |||||||||||||||||||
Kirchhoff | incentive | N/A | 319,500 | 639,000 | ||||||||||||||||
PS | 8/13/19 | 1,880 | 3,760 | 189,976 | ||||||||||||||||
RSA | 8/13/19 | 1,810 | 225,526 | |||||||||||||||||
ISO/SAR | 8/13/19 | 5,590 | 124.60 | 193,788 | ||||||||||||||||
Retirement | ||||||||||||||||||||
modification(6) | 1/1/2020 | 210,777 |
(1) | Represents potential amounts payable under annual short-term incentive awards for fiscal year 2020. Actual amounts earned by NEOs are reported in the Summary Compensation Table. |
(2) | Represents performance shares that vest and pay out in shares of our common stock upon achievement of corporate performance goals tied to net GEOs or TSR within three or five years, respectively, of August 13, 2019. If performance goals are not met, the performance shares will expire unvested. Performance shares are not issued and outstanding shares upon which the grantee may vote or receive dividends. |
(3) | Represents performance-based restricted stock or restricted stock units that vest based on continued service after meeting a threshold corporate performance goal tied to revenue. The awards vest ratably over three years commencing on August 13, 2022. Shares of restricted stock are issued and outstanding shares of common stock with voting and dividend rights. Restricted stock units are not issued and outstanding shares upon which the grantee may vote or receive dividends; however, grantees are entitled to a cash payment (or dividend equivalent) in the amount of declared dividends at the time dividends are paid. |
(4) | Represents incentive stock options and stock appreciation rights that vest ratably over three years commencing on August 13, 2020. |
(5) | Represents the grant date fair value of awards at target calculated in accordance with financial statement reporting rules. |
(6) | Represents the incremental fair value of equity awards modified in connection with Messrs. Jensen’s and Kirchhoff’s retirements calculated as of the modification date in accordance with financial statement reporting rules. You can find more information about these benefits above under “Retirement Agreements” on page 50. |
2020 PROXY STATEMENT 55
(2) Represents shares of performance-based restricted stock that vest based on continued service after meeting a threshold corporate performance goal. The closing price of Royal Gold’s common stock on the NASDAQ Global Select Market on the date of grant was $83.29. Shares of restricted stock granted during fiscal year 2017 will vest ratably over three years commencing on the third anniversary of the grant date. Accordingly, one-third of the awarded shares will vest on August 16 of each of the years 2019, 2020 and 2021. Shares of restricted stock are issued and outstanding shares of common stock which have voting rights and upon which the NEOs received dividends calculated at the same rate paid to other stockholders.
(3)Proposal 2 Represents stock option and SARs awards that vest ratably over three years commencing on the first anniversary of the grant date. Accordingly, one-third of the stock options and SARs will become exercisable on August 16 of each of the years 2017, 2018 and 2019. Amounts for Messrs. Jensen, Wenger, Heissenbuttel, Isto and Kirchhoff include SARs awards of 20,260, 7,500, 7,720, 6,610 and 6,110 shares, respectively, and 1,200 stock option awards for each individual.
(4) Exercise or base price is the closing price of the Company’s common stock on the NASDAQ Global Select Market on the grant date.
(5) Amounts shown represent the total fair value of awards (at target) calculated as of the grant date in accordance with ASC 718 and do not represent cash payments made to the individuals, amounts realized or amounts that may be realized.
OUTSTANDING EQUITY AWARDS AT 2017THE END OF FISCAL YEAR END2020
This table provides information about the total outstanding stock options, SARs, shares of restricted stockshares, and performance stock awardsshares for each of theour NEOs as of June 30, 2017.2020.
Option Awards | Stock Awards | |||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options(1) (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units That Have Not Vested(2) (#) | Market Value of Shares or Units of Stock That Have Not Vested(3) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4) (#) | Equity Incentive Plan Awards: Market Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3) ($) | |||||||||
William Heissenbuttel | 8/20/2015 | 17,386 | — | 56.54 | 8/20/2025 | |||||||||||||
8/16/2016 | 8,920 | — | 83.29 | 8/16/2026 | ||||||||||||||
8/23/2017 | 6,133 | 3,067 | 87.42 | 8/23/2027 | ||||||||||||||
8/21/2018 | 3,574 | 7,146 | 77.73 | 8/21/2028 | ||||||||||||||
8/13/2019 | — | 7,810 | 124.60 | 8/13/2029 | ||||||||||||||
1/2/2020 | — | 3,910 | 121.12 | 1/2/2030 | ||||||||||||||
8/20/2015 | 1,737 | 215,944 | ||||||||||||||||
8/16/2016 | 2,100 | 261,072 | ||||||||||||||||
8/23/2017 | 3,350 | 416,472 | ||||||||||||||||
8/21/2018 | 3,220 | 400,310 | ||||||||||||||||
8/13/2019 | 2,530 | 314,530 | ||||||||||||||||
1/2/2020 | 1,170 | 145,454 | ||||||||||||||||
8/20/2015 | 42 | 5,221 | ||||||||||||||||
8/16/2016 | 1,497 | 186,107 | ||||||||||||||||
8/23/2017 | 3,490 | 433,877 | ||||||||||||||||
8/23/2017 | 3,490 | 433,877 | ||||||||||||||||
8/21/2018 | 3,350 | 416,472 | ||||||||||||||||
8/21/2018 | 3,350 | 416,472 | ||||||||||||||||
8/13/2019 | 2,630 | 326,962 | ||||||||||||||||
8/13/2019 | 2,630 | 326,962 | ||||||||||||||||
1/2/2020 | 1,220 | 151,670 | ||||||||||||||||
1/2/2020 | 1,220 | 151,670 | ||||||||||||||||
Mark Isto | 1/5/2015 | 1,518 | — | 65.85 | 1/5/2025 | |||||||||||||
8/20/2015 | 1,768 | — | 56.54 | 8/20/2025 | ||||||||||||||
8/16/2016 | 1,200 | — | 83.29 | 8/16/2026 | ||||||||||||||
8/23/2017 | 381 | 2,880 | 87.42 | 8/23/2027 | ||||||||||||||
8/21/2018 | 429 | 6,173 | 77.73 | 8/21/2028 | ||||||||||||||
8/13/2019 | — | 7,100 | 124.60 | 8/13/2029 | ||||||||||||||
1/2/2020 | — | 480 | 121.12 | 1/2/2030 | ||||||||||||||
8/20/2015 | 1,667 | 207,241 | ||||||||||||||||
8/16/2016 | 1,840 | 228,749 | ||||||||||||||||
8/23/2017 | 3,150 | 391,608 | ||||||||||||||||
8/21/2018 | 2,780 | 345,610 | ||||||||||||||||
8/13/2019 | 2,300 | 285,936 | ||||||||||||||||
1/2/2020 | 140 | 17,405 |
56 ROYAL GOLD, INC.
|
| Option Awards |
| Stock Awards |
| |||||||||||||||
Name |
| Number of |
| Number of |
| Option |
| Option |
| Number of |
| Market Value |
| Equity Incentive |
| Equity Incentive |
| |||
Tony Jensen |
| 7,334 |
| — |
| $ | 53.00 |
| 11/18/2019 |
|
|
|
|
|
|
|
|
| ||
|
| 20,000 |
| — |
| $ | 49.66 |
| 11/17/2020 |
|
|
|
|
|
|
|
|
| ||
|
| 14,400 |
| — |
| $ | 68.18 |
| 8/18/2021 |
|
|
|
|
|
|
|
|
| ||
|
| 22,000 |
| — |
| $ | 75.32 |
| 8/13/2022 |
|
|
|
|
|
|
|
|
| ||
|
| 36,000 |
| — |
| $ | 62.14 |
| 8/27/2023 |
|
|
|
|
|
|
|
|
| ||
|
| 22,400 |
| 11,200 | (6) | $ | 75.72 |
| 8/26/2024 |
|
|
|
|
|
|
|
|
| ||
|
| 14,157 |
| 28,316 | (7) | $ | 56.54 |
| 8/20/2025 |
|
|
|
|
|
|
|
|
| ||
|
| — |
| 21,460 | (8) | $ | 83.29 |
| 8/16/2026 |
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 8,000 | (9) | $ | 625,360 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 10,800 | (10) | $ | 844,236 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 12,726 | (11) | $ | 994,791 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 7,590 | (12) | $ | 593,310 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 22,000 | (13) | $ | 1,719,740 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 24,000 | (14) | $ | 1,876,080 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,500 | (15) | $ | 273,595 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 5,511 | (16) | $ | 430,795 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,945 | (17) | $ | 308,381 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,945 | (18) | $ | 308,381 |
| ||
Stefan Wenger |
| 5,114 |
| — |
| $ | 53.00 |
| 11/18/2019 |
|
|
|
|
|
|
|
|
| ||
|
| 4,000 |
| — |
| $ | 49.66 |
| 11/17/2020 |
|
|
|
|
|
|
|
|
| ||
|
| 5,000 |
| — |
| $ | 68.18 |
| 8/18/2021 |
|
|
|
|
|
|
|
|
| ||
|
| 5,250 |
| — |
| $ | 75.32 |
| 8/13/2022 |
|
|
|
|
|
|
|
|
| ||
|
| 13,500 |
| — |
| $ | 62.14 |
| 8/27/2023 |
|
|
|
|
|
|
|
|
| ||
|
| 8,800 |
| 4,400 | (6) | $ | 75.72 |
| 8/26/2024 |
|
|
|
|
|
|
|
|
| ||
|
| 5,471 |
| 10,944 | (7) | $ | 56.54 |
| 8/20/2025 |
|
|
|
|
|
|
|
|
| ||
|
|
|
| 8,700 | (8) | $ | 83.29 |
| 8/16/2026 |
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 1,667 | (19) | $ | 130,309 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 1,500 | (20) | $ | 117,255 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 2,800 | (9) | $ | 218,876 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 4,200 | (10) | $ | 328,314 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 4,919 | (11) | $ | 384,518 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 3,080 | (12) | $ | 240,764 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4,400 | (13) | $ | 343,948 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8,800 | (14) | $ | 687,896 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,350 | (15) | $ | 105,530 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,130 | (16) | $ | 166,502 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,600 | (17) | $ | 125,072 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,600 | (18) | $ | 125,072 |
|
|
| Option Awards |
| Stock Awards |
| |||||||||||||||
Name |
| Number of |
| Number of |
| Option |
| Option |
| Number of |
| Market Value |
| Equity Incentive |
| Equity Incentive |
| |||
William |
| 7,000 |
| — |
| $ | 53.00 |
| 11/18/2019 |
|
|
|
|
|
|
|
|
| ||
Heissenbuttel |
| 6,000 |
| — |
| $ | 49.66 |
| 11/17/2020 |
|
|
|
|
|
|
|
|
| ||
|
| 5,000 |
| — |
| $ | 68.18 |
| 8/18/2021 |
|
|
|
|
|
|
|
|
| ||
|
| 5,250 |
| — |
| $ | 75.32 |
| 8/13/2022 |
|
|
|
|
|
|
|
|
| ||
|
| 13,500 |
| — |
| $ | 62.14 |
| 8/27/2023 |
|
|
|
|
|
|
|
|
| ||
|
| 8,800 |
| 4,400 | (6) | $ | 75.72 |
| 8/26/2024 |
|
|
|
|
|
|
|
|
| ||
|
| 5,795 |
| 11,591 | (7) | $ | 56.54 |
| 8/20/2025 |
|
|
|
|
|
|
|
|
| ||
|
| — |
| 8,920 | (8) | $ | 83.29 |
| 8/16/2026 |
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 1,667 | (19) | $ | 130,309 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 1,500 | (20) | $ | 117,255 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 2,800 | (9) | $ | 218,876 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 4,200 | (10) | $ | 328,314 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 5,210 | (11) | $ | 407,266 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 3,150 | (12) | $ | 246,236 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4,400 | (13) | $ | 343,948 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8,800 | (14) | $ | 687,896 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,350 | (15) | $ | 105,530 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,257 | (16) | $ | 176,430 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,640 | (17) | $ | 128,199 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,640 | (18) | $ | 128,199 |
| ||
Mark Isto |
| 1,667 |
| 833 | (21) | $ | 65.85 |
| 1/5/2025 |
|
|
|
|
|
|
|
|
| ||
|
| 1,666 |
| 3,334 | (7) | $ | 56.54 |
| 8/20/2025 |
|
|
|
|
|
|
|
|
| ||
|
| — |
| 7,810 | (8) | $ | 83.29 |
| 8/16/2026 |
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 1,342 | (22) | $ | 104,904 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 5,000 | (11) | $ | 390,850 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 2,760 | (12) | $ | 215,749 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 625 | (23) | $ | 48,856 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,083 | (16) | $ | 162,828 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,435 | (17) | $ | 112,174 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,435 | (18) | $ | 112,174 |
| ||
Bruce C. Kirchhoff |
| 7,000 |
| — |
| $ | 53.00 |
| 11/18/2019 |
|
|
|
|
|
|
|
|
| ||
|
| 6,000 |
| — |
| $ | 49.66 |
| 11/17/2020 |
|
|
|
|
|
|
|
|
| ||
|
| 5,000 |
| — |
| $ | 68.18 |
| 8/18/2021 |
|
|
|
|
|
|
|
|
| ||
|
| 5,250 |
| — |
| $ | 75.32 |
| 8/13/2022 |
|
|
|
|
|
|
|
|
| ||
|
| 13,500 |
| — |
| $ | 62.14 |
| 8/27/2023 |
|
|
|
|
|
|
|
|
| ||
|
| 8,800 |
| 4,400 | (6) | $ | 75.72 |
| 8/26/2024 |
|
|
|
|
|
|
|
|
| ||
|
| 4,8247 |
| 9,650 | (7) | $ | 56.54 |
| 8/20/2025 |
|
|
|
|
|
|
|
|
| ||
|
|
|
| 7,310 | (8) | $ | 83.29 |
| 8/16/2026 |
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 1,667 | (19) | $ | 130,309 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 1,500 | (20) | $ | 117,255 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 2,800 | (9) | $ | 218,876 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 4,200 | (10) | $ | 328,314 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 4,337 | (11) | $ | 339,023 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| 2,590 | (12) | $ | 202,460 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4,400 | (13) | $ | 343,948 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8,800 | (14) | $ | 687,896 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,350 | (15) | $ | 105,530 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,878 | (16) | $ | 146,803 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,345 | (17) | $ | 105,139 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,345 | (18) | $ | 105,139 |
|
(1) Represents sharesTable of common stock underlying stock options and SARs. Stock options and SARs vest ratably over three years commencing on the first anniversaryContents
Proposal 2
Option Awards | Stock Awards | |||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options(1) (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units That Have Not Vested(2) (#) | Market Value of Shares or Units of Stock That Have Not Vested(3) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4) (#) | Equity Incentive Plan Awards: Market Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3) ($) | |||||||||
8/20/2015 | 38 | 4,724 | ||||||||||||||||
8/16/2016 | 1,310 | 162,859 | ||||||||||||||||
8/23/2017 | 3,270 | 406,526 | ||||||||||||||||
8/23/2017 | 3,270 | 406,526 | ||||||||||||||||
8/21/2018 | 2,890 | 359,285 | ||||||||||||||||
8/21/2018 | 2,890 | 359,285 | ||||||||||||||||
8/13/2019 | 2,390 | 297,125 | ||||||||||||||||
8/13/2019 | 2,390 | 297,125 | ||||||||||||||||
1/2/2020 | 150 | 18,648 | ||||||||||||||||
1/2/2020 | 150 | 18,648 | ||||||||||||||||
Daniel Breeze | 1/2/2019 | 1,167 | 2,333 | 84.64 | 1/2/2029 | |||||||||||||
8/13/2019 | — | 5,460 | 124.60 | 8/13/2029 | ||||||||||||||
1/2/2019 | 1,200 | 149,184 | ||||||||||||||||
8/13/2019 | 1,770 | 220,046 | ||||||||||||||||
1/2/2019 | 1,200 | 149,184 | ||||||||||||||||
1/2/2019 | 1,200 | 149,184 | ||||||||||||||||
8/13/2019 | 1,840 | 228,749 | ||||||||||||||||
8/13/2019 | 1,840 | 228,749 | ||||||||||||||||
Paul Libner | 8/23/2017 | — | 467 | 87.42 | 8/23/2027 | |||||||||||||
8/21/2018 | — | 933 | 77.73 | 8/21/2028 | ||||||||||||||
8/13/2019 | — | 2,560 | 124.60 | 8/13/2029 | ||||||||||||||
1/2/2020 | — | 1,490 | 121.12 | 1/2/2030 | ||||||||||||||
8/20/2015 | 500 | 62,160 | ||||||||||||||||
8/16/2016 | 800 | 99,456 | ||||||||||||||||
8/23/2017 | 1,400 | 174,048 | ||||||||||||||||
8/21/2018 | 1,400 | 174,048 | ||||||||||||||||
8/13/2019 | 830 | 103,186 | ||||||||||||||||
1/2/2020 | 440 | 54,701 | ||||||||||||||||
8/20/2015 | 12 | 1,492 | ||||||||||||||||
8/16/2016 | 548 | 68,127 | ||||||||||||||||
8/23/2017 | 1,400 | 174,048 | ||||||||||||||||
8/23/2017 | 1,400 | 174,048 | ||||||||||||||||
8/21/2018 | 1,400 | 174,048 | ||||||||||||||||
8/21/2018 | 1,400 | 174,048 | ||||||||||||||||
8/13/2019 | 860 | 106,915 | ||||||||||||||||
8/13/2019 | 860 | 106,915 | ||||||||||||||||
1/2/2020 | 460 | 57,187 | ||||||||||||||||
1/2/2020 | 460 | 57,187 |
2020 PROXY STATEMENT 57
Table of the grant date.Contents
(2)Proposal 2
Option Awards | Stock Awards | |||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options(1) (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units That Have Not Vested(2) (#) | Market Value of Shares or Units of Stock That Have Not Vested(3) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4) (#) | Equity Incentive Plan Awards: Market Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3) ($) | |||||||||
Randy Shefman | 8/16/2016 | 1,200 | — | 83.29 | 8/16/2026 | |||||||||||||
8/23/2017 | 933 | 467 | 87.42 | 8/23/2027 | ||||||||||||||
8/21/2018 | 467 | 933 | 77.73 | 8/21/2028 | ||||||||||||||
8/13/2019 | — | 2,560 | 124.60 | 8/13/2029 | ||||||||||||||
1/2/2020 | — | 1,010 | 121.12 | 1/2/2030 | ||||||||||||||
8/20/2015 | 667 | 82,921 | ||||||||||||||||
8/16/2016 | 800 | 99,456 | ||||||||||||||||
8/23/2017 | 1,400 | 174,048 | ||||||||||||||||
8/21/2018 | 1,400 | 174,048 | ||||||||||||||||
8/13/2019 | 830 | 103,186 | ||||||||||||||||
1/2/2020 | 300 | 37,296 | ||||||||||||||||
8/20/2015 | 15 | 1,865 | ||||||||||||||||
8/16/2016 | 548 | 68,127 | ||||||||||||||||
8/23/2017 | 1,400 | 174,048 | ||||||||||||||||
8/23/2017 | 1,400 | 174,048 | ||||||||||||||||
8/21/2018 | 1,400 | 174,048 | ||||||||||||||||
8/21/2018 | 1,400 | 174,048 | ||||||||||||||||
8/13/2019 | 860 | 106,915 | ||||||||||||||||
8/13/2019 | 860 | 106,915 | ||||||||||||||||
1/2/2020 | 310 | 38,539 | ||||||||||||||||
1/2/2020 | 310 | 38,539 | ||||||||||||||||
Tony Jensen | 8/20/2015 | 104 | 12,929 | |||||||||||||||
8/16/2016 | 3,601 | 447,676 | ||||||||||||||||
8/23/2017 | 9,680 | 1,203,418 | ||||||||||||||||
8/23/2017 | 8,712 | 1,083,076 | ||||||||||||||||
8/21/2018 | 8,750 | 1,087,800 | ||||||||||||||||
8/21/2018 | 8,750 | 1,087,800 |
(1) | Represents shares of common stock underlying stock options and SARs. Stock options and SARs vest ratably over three years commencing on the first anniversary of the grant date. |
(2) | Represents shares of restricted stock or restricted stock units that vest based on continued service after meeting threshold corporate performance goals, all of which have been met as of June 30, 2020. Shares of restricted stock or restricted stock units vest ratably over three years commencing on the third anniversary of the grant date. |
(3) | Market value is based on the closing price of our common stock on June 30, 2020 ($124.32). |
(4) | Represents maximum TSR and GEO performance shares, which will vest upon achievement of preestablished performance goals within three or five years of the grant date, respectively. If the goals are not met during the vesting period, the performance shares will be forfeited. |
58 ROYAL GOLD, INC.
(3)Proposal 2 Market value is based on a stock price of $78.17, the closing price of Royal Gold’s common stock on the NASDAQ Global Select Market on June 30, 2017, and the outstanding number of shares of restricted stock.
(4) Represents performance stock awards made before fiscal 2015, which will vest upon achievement of target performance objectives within five years of the grant. If target performance objectives are not met within five years of the grant, the performance stock awards will be forfeited. If target performance objectives are met at any time during the five year period, 100% of the performance stock awards will vest. Interim amounts may vest in 25% increments upon achievement of 25%, 50%, 75% and 100% of the target objectives. Each performance stock award, if earned, will be settled with shares of Royal Gold common stock. Performance targets for awards made prior to fiscal 2012 are based on growth of free cash flow per share on a trailing twelve month basis and growth of royalty ounces in reserve per share on an annual basis. Performance targets for awards made beginning in fiscal 2012 are based on growth of adjusted free cash flow per share on a trailing twelve month basis.
Also represents TSR and GEO performance stock awards made beginning in fiscal 2015, which will vest upon achievement of target performance or market objectives within three or five years of the grant date, respectively. If target performance or market objectives are not met within three or five years of the grant, the performance stock awards will be forfeited.
(5) Payout value is based on a stock price of $78.17, the closing price on the NASDAQ Global Select Market on June 30, 2017, and assuming 100% of the performance stock awards shown will vest based on the achievement of target performance objectives. Amounts indicated are not necessarily indicative of the amounts that may be realized by the NEO.
(6) Stock options and SARs became exercisable on August 26, 2017.
(7) One-half of these stock options and SARs became exercisable on August 20, 2017, and the remaining half will vest on August 20, 2018. Amounts include 1,179 stock options and 27,137 SARs for Mr. Jensen; 1,179 stock options and 9,765 SARs for Mr. Wenger; 1,179 stock options and 10,412 SARs for Mr. Heissenbuttel; 1,179 stock options and 2,155 SARs for Mr. Isto; and 1,179 stock options and 8,471 SARs for Mr. Kirchhoff.
(8) One-third of these stock options and SARs became exercisable on August 16, 2017, and the remaining two-thirds will vest in equal parts on each of August 16, 2018 and 2019. Amounts include 1,200 stock options and 20,260 SARs for Mr. Jensen; 1,200 stock options and 7,500 SARs for Mr. Wenger; 1,200 stock options and 7,720 SARs for Mr. Heissenbuttel; 1,200 stock options and 6,610 SARs for Mr. Isto; and 1,200 stock options and 6,110 SARs for Mr. Kirchhoff.
(9) One-half of the shares vested on August 27, 2017; the remaining one-half will vest on August 27, 2018.
(10) One-third of the shares vested on August 26, 2017; the remaining one-third will vest in equal parts on each of August 26, 2018 and 2019.
(11) One-third of the shares will vest on each of August 20, 2018, 2019 and 2020.
(12) One-third of the shares will vest on each of August 16, 2019, 2020 and 2021.
(13) Awards expired on August 13, 2017, since the vesting requirements were not met.
(14) Awards will expire on August 27, 2018, if the vesting requirements are not met.
(15) Awards will expire on August 26, 2019, if the vesting requirements are not met.
(16) Awards will expire on August 20, 2020, if the vesting requirements are not met.
(17) Awards will expire on August 16, 2019, if the vesting requirements are not met.
(18) Awards will expire on August 16, 2021, if the vesting requirements are not met.
(19) These shares vested on August 18, 2017.
(20) These shares vested on August 13, 2017.
(21) These shares will vest on January 5, 2018.
(22) One-third of these shares will vest on each of January 5, 2018, 2019 and 2020.
(23) Awards will expire on January 5, 2020, if the vesting requirements are not met.
FISCAL YEAR 20172020 OPTION EXERCISES AND STOCK VESTED
This table provides information on option exercises and the vesting of shares of restricted stock or performance stock awards for each of the NEOs during fiscal year 2017.
|
| Option Awards |
| Stock Awards |
| ||||||
|
| Number of Shares |
| Value Realized on |
| Number of Shares |
| Value Realized on |
| ||
Name |
| (#) |
| ($) |
| (#) |
| ($) |
| ||
Tony Jensen |
| — |
| — |
| 18,995 |
| $ | 1,437,944 |
| |
Stefan Wenger |
| — |
| — |
| 12,357 |
| $ | 946,147 |
| |
William Heissenbuttel |
| 16,517 |
| $ | 644,700 |
| 12,538 |
| $ | 961,223 |
|
Mark Isto |
| — |
| — |
| 4,272 |
| $ | 335,352 |
| |
Bruce C. Kirchhoff |
| — |
| — |
| 11,990 |
| $ | 915,580 |
| |
(1) Value realized upon exercise of stock options and SARs was computed by subtractingand the exercise price of the option from the closing price of the underlying Royal Gold common stock on the date of grant and multiplying that number by the number of shares underlying the options exercised.
(2) Value realized upon vesting of restricted stockshares and performance stock awards was computed by multiplying the closing priceshares for each of the underlying Royal Gold common stock on the NASDAQ Global Select Market on the date that the restricted stock and performance stock awards vested, by the number of restricted stock and performance stock awards that vested.our NEOs during fiscal year 2020.
Option Awards | Stock Awards | |||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise(1) ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(2) ($) | ||||
William Heissenbuttel | — | — | 6,220 | 790,102 | ||||
Mark Isto | 18,861 | 995,391 | 5,198 | 648,920 | ||||
Daniel Breeze | — | — | — | — | ||||
Paul Libner | 2,780 | 129,480 | 2,144 | 272,183 | ||||
Randy Shefman | 5,602 | 334,615 | 2,310 | 293,351 | ||||
Tony Jensen | 52,210 | 2,467,700 | 43,264 | 5,331,390 | ||||
Bruce Kirchhoff | 22,140 | 593,885 | 5,647 | 716,892 |
(1) | Value was calculated by multiplying the number of shares exercised by the difference between the market price of our common stock at exercise and the exercise price. |
(2) | Value was calculated by multiplying the number of shares that vested by the closing market price of our common stock on the vesting date. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
Other Employee Benefits
The Company provides life insurance benefits up to $300,000 to all of its employees. The Company also provides long-term disability coverage to all of its employees that provides for 60% of monthly salary protection up to $7,000 a month until age 65. Each of the NEOs shown below would be entitled to these amounts upon termination for death or disability.
The table below shows the estimated payments and benefits for each of our NEOs that would be providedpayable as a result of termination of employment or a Changechange of Controlcontrol for our NEOs who were employed as of the Company, as defined within each NEO’s employment agreement and the 2004 LTIP and the 2015 LTIP, as applicable. Calculations for this tableJune 30, 2020. We assume that the triggeringapplicable trigger event took place on June 30, 2017, the last business day2020. The value of our 2017 fiscal year, except as noted. Calculations for combined amounts shown foraccelerated vesting of equity awards under the Company’s 2004 LTIP and 2015 LTIP areis based on the closing market price of the Company’sour common stock on June 30, 2020 ($124.32). Change of control is defined in each NEO’s employment agreement and equity award agreements. The table does not show employee benefits that are provided to our employees on a non-discriminatory basis. You can find information about Messrs. Jensen’s and Kirchhoff’s retirement benefits in the NASDAQ Global Select MarketSummary Compensation Table. Messrs. Jensen and Kirchhoff did not receive any cash severance in connection with their retirements.
2020 PROXY STATEMENT 59
Proposal 2
Cash Compensation ($) | Value of Medical Insurance Continuation ($) | Value of Accelerated Vesting of Outstanding Equity Awards | Total ($) | |||||||||
Name | Restricted Stock ($) | Stock Options and SARs ($) | Performance Stock Awards ($) | |||||||||
William Heissenbuttel Involuntary Termination, Voluntary Termination for Good Reason, or Company Non-Renewal of Employment Agreement | 1,088,000 | — | 869,569 | 458,616 | — | 2,416,185 | ||||||
Involuntary Termination, Voluntary Termination for Good Reason, or Company Non-Renewal of Employment Agreement with Change of Control | 2,720,000 | 28,229 | 1,753,782 | 458,616 | 2,849,290 | 7,809,917 | ||||||
Mark Isto Involuntary Termination, Voluntary Termination for Good Reason, or Company Non-Renewal of Employment Agreement | 831,333 | — | 782,832 | 395,408 | — | 2,009,573 | ||||||
Involuntary Termination, Voluntary Termination for Good Reason, or Company Non-Renewal of Employment Agreement with Change of Control | 1,247,000 | 12,627 | 1,476,549 | 395,408 | 2,330,751 | 5,462,335 | ||||||
Daniel Breeze(1) Involuntary Termination or Voluntary Termination for Good Reason | 61,667 | — | 112,966 | 92,573 | — | 267,206 | ||||||
Involuntary Termination or Voluntary Termination for Good Reason with Change of Control | 967,500 | — | 369,230 | 92,573 | 755,866 | 2,185,169 | ||||||
Paul Libner Involuntary Termination, Voluntary Termination for Good Reason, or Company Non-Renewal of Employment Agreement | 489,667 | — | 325,510 | 65,469 | — | 880,646 | ||||||
Involuntary Termination, Voluntary Termination for Good Reason, or Company Non-Renewal of Employment Agreement with Change of Control | 734,500 | 24,580 | 667,598 | 65,469 | 1,094,016 | 2,586,163 | ||||||
Randy Shefman Involuntary Termination, Voluntary Termination for Good Reason, or Company Non-Renewal of Employment Agreement | 479,333 | — | 343,832 | 63,933 | — | 887,098 | ||||||
Involuntary Termination, Voluntary Termination for Good Reason, or Company Non-Renewal of Employment Agreement with Change of Control | 719,000 | 24,653 | 670,955 | 63,933 | 1,057,093 | 2,535,634 |
(1) | Mr. Breeze’s Employment Agreement is of indefinite term, so termination for non-renewal is not possible. |
60 ROYAL GOLD, INC.
Proposal 2
CEO PAY RATIO
The ratio of Mr. Heissenbuttel’s annualized total compensation for his role as CEO ($2,541,562) to the annual total compensation of our median-compensated employee ($392,087) for fiscal year 2020 was 6.5 to 1.
Because Mr. Heissenbuttel was promoted to the CEO role mid-year, in accordance with SEC rules, we annualized his CEO compensation for the entire year for purposes of this calculation. As a result, Mr. Heissenbuttel’s annualized total compensation shown above does not match his annual total compensation for fiscal year 2020 as set forth in the Summary Compensation Table.
We identified our median compensated employee by examining total cash compensation (salary and short-term cash incentive) paid for fiscal year 2020 to all employees who were employed by us globally on June 30, 2017, which2020, excluding Mr. Heissenbuttel. No assumptions, adjustments, or estimates were made in respect of total cash compensation, except that we (a) annualized the compensation of any employee who was $78.17.not employed with us for all of fiscal year 2020 and (b) applied the average fiscal year 2020 foreign exchange rate to Canadian dollars and Swiss francs paid to our Canadian and Swiss employees, respectively. We believe the use of total cash compensation for all employees is a consistently applied compensation measure because all of our employees receive a salary and are eligible for short-term cash incentives, while not all of our employees are eligible for long-term incentive awards.
After identifying the median compensated employee, we determined the annual total compensation for that employee using the same methodology used to calculate our executives’ annual total compensation as set forth in the Summary Compensation Table.
We believe this CEO pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL2020 PROXY STATEMENT 61
|
|
|
| Value of |
| Combined awards under the 2004 LTIP and the |
|
|
| ||||||||||
Name |
| Cash Compensation |
| Insurance |
| Restricted |
| Stock Options |
| Performance |
| Total |
| ||||||
Tony Jensen Involuntary Termination, Voluntary Termination for Good Reason or Company Non-Renewal of Employment Agreement |
| $ | 720,000 |
| — |
| $ | 1,434,448 |
| $ | 1,899,529 |
| — |
| $ | 4,053,977 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Involuntary Termination, Voluntary Termination for Good Reason or Company Non-Renewal of Employment Agreement with Change of Control |
| $ | 3,869,167 |
| $ | 32,168 |
| $ | 3,057,698 |
| $ | 1,899,529 |
| $ | 4,917,049 |
| $ | 13,775,611 |
|
Stefan Wenger Involuntary Termination, Voluntary Termination for Good Reason or Company Non-Renewal of Employment Agreement |
| $ | 440,000 |
| — |
| $ | 781,855 |
| $ | 663,975 |
| — |
| $ | 1,885,830 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Involuntary Termination, Voluntary Termination for Good Reason or Company Non-Renewal of Employment Agreement with Change of Control |
| $ | 1,156,500 |
| $ | 22,801 |
| $ | 1,420,036 |
| $ | 663,975 |
| $ | 1,554,020 |
| $ | 4,817,332 |
|
William Heissenbuttel Involuntary Termination, Voluntary Termination for Good Reason or Company Non-Renewal of Employment Agreement |
| $ | 470,000 |
| — |
| $ | 791,275 |
| $ | 775,473 |
| — |
| $ | 1,898,799 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Involuntary Termination, Voluntary Termination for Good Reason or Company Non-Renewal of Employment Agreement with Change of Control |
| $ | 1,277,500 |
| $ | 23,598 |
| $ | 1,448,256 |
| $ | 775,473 |
| $ | 1,570,201 |
| $ | 5,095,388 |
|
Mark Isto Involuntary Termination, Voluntary Termination for Good Reason or Company Non-Renewal of Employment Agreement |
| $ | 350,000 |
| — |
| $ | 235,153 |
| $ | 56,573 |
| — |
| $ | 641,726 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Involuntary Termination, Voluntary Termination for Good Reason or Company Non-Renewal of Employment Agreement with Change of Control |
| $ | 814,500 |
| $ | 9,866 |
| $ | 711,503 |
| $ | 53,573 |
| $ | 436,032 |
| $ | 2,018,609 |
|
Bruce C. Kirchhoff Involuntary Termination, Voluntary Termination for Good Reason or Company Non-Renewal of Employment Agreement |
| $ | 386,000 |
| — |
| $ | 758,328 |
| $ | 754,471 |
| — |
| $ | 1,898,799 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Involuntary Termination, Voluntary Termination for Good Reason or Company Non-Renewal of Employment Agreement with Change of Control |
| $ | 1,022,500 |
| $ | 22,049 |
| $ | 1,336,316 |
| $ | 754,471 |
| $ | 1,494,454 |
| $ | 4,629,790 |
|
Proposal #4: ADVISORY VOTE ON FREQUENCY OF STOCKHOLDER VOTES ON EXECUTIVE COMPENSATION
In additionOur AF Committee has selected Ernst & Young LLP to serve as our independent registered public accounting firm for the advisory vote on executive compensation (Proposal #3 above), Section 14A of the Exchange Act requires us to provide a separate stockholder advisory vote once every six years concerning how frequently the stockholders’ Say on Pay vote should occur. This proposalfiscal year ending June 30, 2021. Our Board is commonly known as the “Say When on Pay” proposal. Our first Say When on Pay advisory vote was held in 2011, when our Board of Directors recommended, and the stockholders voted in favor of, an annual advisory Say on Pay vote.
The proxy card will allowasking stockholders to voteratify this selection.
Stockholder approval or ratification is not required. However, we believe that submitting the appointment of Ernst & Young LLP to stockholders for one of four choices concerning the frequency of the Say on Pay vote: every one, two or three years, or abstain.
The Board of Directors firmly believes that executive compensation should be strongly linked to the Company’s financial and operating performance such thatratification is good corporate governance. If stockholders do not ratify this appointment, our executives’ interests are aligned with those of our stockholders, and that an annual advisory vote on executive compensation is appropriate for the Company and its stockholders at this time. Although the Say When on Pay vote is advisory only, the Board of Directors and the Compensation, Nominating and GovernanceAF Committee value the opinion of our stockholders and will take the votevoting results into account whenever consideringunder consideration.
Representatives of Ernst & Young LLP are expected to attend the annual meeting. They will have an opportunity to make a statement if they so desire and will have an opportunity to respond to appropriate frequency of the advisory vote on executive compensation. Because the frequency vote is advisory, however, the Board of Directors may decide that the best interests of the Company and the stockholders are best served by holding an advisory executive compensation vote more or less often than the frequency approved by ourquestions from stockholders.
Stockholders are asked to support a frequency of every one year for future Say on Pay votes.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the votes cast at a meeting at which a quorum is present is required to approve this proposal.
ratify the appointment of Ernst & Young LLP.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES
Fees for services rendered by Ernst & Young LLP for the fiscal years ended June 30, 2020, and 2019, were as follows:
Fiscal Year 2020 | Fiscal Year 2019 | |||||
Audit Fees | $ | 756,252 | $ | 710,748 | ||
Tax Fees | $ | 326,804 | $ | 177,680 | ||
All Other Fees | — | $ | 19,712 | |||
Total | $ | 1,083,066 | $ | 908,140 |
Audit fees represent fees associated with the audits of our and certain of our foreign subsidiaries’ annual financial statements and review of our quarterly financial statements, issuance of consents and review of documents filed with the SEC. Audit fees also include fees associated with the audit of management’s assessment and operating effectiveness of Section 404 of the Sarbanes-Oxley Act. We did not pay any audit-related fees to Ernst & Young LLP for fiscal years 2020 or 2019.
Tax fees represent fees associated with tax compliance, tax return preparation, and tax consulting services.
Other fees represent fees associated with the ongoing servicing of our global mobility policies.
CONDUCTING THE ADVISORY VOTE ON EXECUTIVE COMPENSATION EVERY ONE YEAR.PRE-APPROVAL POLICIES AND PROCEDURES
The AF Committee has adopted a policy requiring advance approval for all audit, audit-related, tax, and other services performed by our independent registered public accounting firm. The policy provides for pre-approval by the AF Committee of specifically defined audit and non-audit services. Unless the specific service has been previously pre-approved with respect to a year, the AF Committee must approve the permitted service before the independent auditor is engaged to perform the service. The AF Committee has delegated to its Chairman the authority to approve certain permitted services, provided that the Chairman reports these decisions to the AF Committee at its next scheduled meeting. The AF Committee pre-approved all of the services described above for fiscal year 2020.
62 ROYAL GOLD, INC.
OTHER INFORMATIONProposal 3
Section 16(a)The Audit and Finance Committee has reviewed and discussed the audited financial statements of Royal Gold for the fiscal year ended June 30, 2020, and our reporting processes, including internal control over financial reporting, with our management. The Audit and Finance Committee has discussed with Ernst & Young LLP, our independent registered public accounting firm for fiscal year 2020, the matters required to be discussed by applicable Public Company Accounting Oversight Board standards. The Audit and Finance Committee has also received the written disclosures and the letter from Ernst & Young LLP required by the applicable requirements of the Exchange Act requiresPublic Company Accounting Oversight Board regarding its communications with the Company’s officersAudit and Finance Committee concerning independence and the Audit and Finance Committee has discussed the independence of Ernst & Young LLP with Royal Gold.
Based on the review and discussions with Royal Gold’s auditors and management, the Audit and Finance Committee recommended to the Board of Directors and persons who own more than 10%(and the Board of a registered class ofDirectors has approved) that the Company’s equity securities, to file reports of ownership and changesaudited financial statements be included in ownership inRoyal Gold’s Annual Report on Form 10-K for the Company’s equity securities tofiscal year ended June 30, 2020, for filing with the Securities and Exchange Commission. Officers, Directors and greater than 10% stockholders are required
This report has been submitted by the regulationsfollowing independent directors, who comprise the Audit and Finance Committee of the SecuritiesBoard of Directors:
William Hayes, Chairman | Jamie Sokalsky | Christopher Thompson |
2020 PROXY STATEMENT 63
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the beneficial ownership, as of September 21, 2020, or such other date noted below, of our common stock by each director, director nominee, NEO, and Exchange Commission to furnish the Company with copiesbeneficial owners of all Section 16(a) reports they file. Based solelymore than 5% of our common stock, based on itsour review of copiesdocuments filed with the SEC. Unless otherwise noted below, the address of such reports receivedeach beneficial owner listed in the table is c/o Royal Gold, Inc., 1144 15th Street, Suite 2500, Denver, Colorado 80202.
Name of Beneficial Owner | Number of Shares of Common Stock Beneficially Owned | Percent of Common Stock Outstanding | ||||
Current Directors, Director Nominees, and NEOs | ||||||
William Heissenbuttel | 96,858 | (1) | * | |||
President, Chief Executive Officer, and Director | ||||||
William Hayes | 8,780 | (2) | * | |||
Chairman of the Board | ||||||
Kevin McArthur | 17,124 | (3) | * | |||
Director | ||||||
Jamie Sokalsky | 15,480 | (4) | * | |||
Director | ||||||
Christopher Thompson | 43,624 | (5) | * | |||
Director | ||||||
Ronald Vance | 13,794 | (3) | * | |||
Director | ||||||
Sybil Veenman | 7,810 | (4) | * | |||
Director | ||||||
Fabiana Chubbs | — | * | ||||
Director Nominee | ||||||
Mark Isto | 20,735 | (6) | * | |||
Executive Vice President and Chief Operating Officer, Royal Gold Corporation | ||||||
Daniel Breeze | 361 | (7) | * | |||
Vice President Corporate Development, RGLD Gold AG | ||||||
Paul Libner | 13,592 | (8) | * | |||
Chief Financial Officer and Treasurer | ||||||
Randy Shefman | 8,221 | (9) | * | |||
Vice President and General Counsel | ||||||
Current Directors, Director Nominees, and NEOs as a Group (13 individuals, including 12 named above) | 247,499 | * | ||||
Former Executives | ||||||
Tony Jensen | 8,403 | (10) | * | |||
Former President, Chief Executive Officer, and Director | ||||||
Bruce Kirchhoff | 33,694 | * | ||||
Former Vice President, General Counsel, and Secretary | ||||||
5% or More Beneficial Owners | ||||||
Capital World Investors (U.S.) | 8,038,238 | (12) | 12.3 | % | ||
333 South Hope Street, 55th Floor Los Angeles, CA 90071 | ||||||
The Vanguard Group | 7,167,701 | (13) | 10.9 | % | ||
100 Vanguard Boulevard Malvern, PA 19355 | ||||||
BlackRock, Inc. | 6,618,719 | (14) | 10.1 | % | ||
55 East 52nd Street New York, New York 10055 | ||||||
Van Eck Associates Corporation | 4,316,528 | (15) | 6.6 | % | ||
666 Third Avenue – 9th Floor New York, New York 10017 |
64 ROYAL GOLD, INC.
Stock Ownership Information
* | Less than 1% ownership of our common stock. |
(1) | Includes (a) 12,470 shares of restricted stock and (b) 15,528 shares subject to SARs, and 5,236 shares subject to stock options, that were exercisable as of, or within 60 days after, September 21, 2020. Does not include shares potentially issuable under performance share awards. |
(2) | Includes 562 shares of restricted stock. |
(3) | Includes 6,310 shares of restricted stock the vesting of which is deferred until separation from service (or separation of service within 12 months of a change of control) under our Deferred Compensation Plan. |
(4) | Includes 6,310 restricted stock units the vesting of which is deferred until separation from service (or separation of service within 12 months of a change of control) under our Deferred Compensation Plan. |
(5) | Includes 3,154 restricted stock units the vesting of which is deferred until separation from service (or separation of service within 12 months of a change of control) under our Deferred Compensation Plan. |
(6) | Includes (a) 920 shares of restricted stock and (b) 1,692 shares subject to SARs, and 6,106 shares subject to stock options, that were exercisable as of, or within 60 days after, September 21, 2020. Does not include shares potentially issuable under restricted stock units and performance share awards. |
(7) | Represents 361 shares subject to SARs that were exercisable as of, or within 60 days after, September 21, 2020. Does not include shares potentially issuable under restricted stock units and performance share awards. |
(8) | Includes (a) 5,573 shares of restricted stock and (b) 311 shares subject to SARs that were exercisable as of, or within 60 days after, September 21, 2020. Does not include shares potentially issuable under performance share awards. |
(9) | Includes (a) 5,183 shares of restricted stock and (b) 1,133 shares subject to SARs that were exercisable as of, or within 60 days after, September 21, 2020. Does not include shares potentially issuable under performance share awards. |
(10) | Does not include shares potentially issuable under performance share awards. |
(11) | As reported by Capital World Investors on an Amendment No. 2 to Form 13G filed with the SEC on February 14, 2020. Capital World Investors reported that it had sole dispositive and voting power over all of the reported shares. |
(12) | As reported by The Vanguard Group on an Amendment No. 7 to Form 13G filed with the SEC on February 12, 2020. The Vanguard Group reported that it had sole dispositive power over 7,128,294 of the reported shares, shared dispositive power over 39,407 of the reported shares, sole voting power over 35,509 of the reported shares, and shared voting power over 12,686 of the reported shares. |
(13) | As reported by BlackRock, Inc. on an Amendment No. 10 to Form 13G filed with the SEC on February 4, 2020. BlackRock reported that it had sole dispositive power over all of the reported shares and sole voting power over 6,359,625 of the reported shares. |
(14) | As reported by Van Eck Associates Corporation on an Amendment No. 10 to Form 13G filed with the SEC on February 11, 2020. Van Eck Associates Corporation reported that it had sole dispositive power over all of the reported shares and sole voting power over 4,306,648 of the reported shares. |
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information concerning shares of our common stock that are authorized and written representations from such persons that no other reports were requiredavailable for those persons, the Company believes that all filing requirements applicable to its officers, Directors and greater than 10% stockholders were timely met for fiscal year 2017.issuance under our equity compensation plans as of June 30, 2020:
Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants, and Rights (a) | Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights (b) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) | |||||
Equity compensation plans approved by stockholders(1) | 338,352 | (2) | $92.20 | (3) | 2,287,751 | |||
Equity compensation plans not approved by stockholders | — | — | — | |||||
Total | 338,352 | $92.20 | 2,287,751 |
(1) | Represents shares issuable under our 2015 Omnibus Long-Term Incentive Plan. |
(2) | Includes (a) 141,506 shares issuable under outstanding stock options and stock appreciation rights, (b) 34,552 shares issuable under outstanding restricted stock units, (c) 139,520 shares issuable under outstanding performance shares (at maximum), and (d) 22,774 shares deferred under our Deferred Compensation Plan for nonemployee directors. |
(3) | Weighted-average exercise price does not take into account shares issuable under restricted stock units, performance shares, or deferred shares, which do not have an exercise price. |
2020 PROXY STATEMENT 65
The BoardWe are not aware of Directors knows of noany other matters to be brought before the Annual Meeting. However, ifannual meeting. If other matters should come before the Annual Meeting, it is the intention ofannual meeting, each person named in the proxy intends to vote suchthe proxy in accordance with histheir own judgment on suchthe matters.
STOCKHOLDER PROPOSALS FOR THE 2021 ANNUAL MEETING
Proposals to |
| Other | ||||
Deadline for proposal to be received by |
| Between July | ||||
What to include in the proposal | Information required by SEC rules | Information required by our | ||||
Where to send the proposal | By mail to |
* | Proposals must satisfy SEC requirements, including Rule 14a-8. |
** | Proposals not submitted pursuant to SEC Rule 14a-8 and any director nominees must satisfy our Bylaw requirements, which are available on our website. |
*** | If the number of directors to be elected at the 2021 annual meeting is increased and there is no public announcement by us specifying the size of the increased Board at least 100 days before November 18, 2021 (which is the first anniversary of the 2020 annual meeting), the stockholder’s notice with respect to nominees for any new positions created by the increase must be received not later than the close of business on the 10th day following the day on which we first make the public announcement. |
*Proposals must satisfy SEC requirements, including Rule 14a-8.
**Proposals not submitted pursuant to SEC Rule 14a-8 and any director nominees must satisfy the Company’s by-law requirements, available on our website.
***If the number of Directors to be elected at the 2018 Annual Meeting is increased and there is no public announcement by the Company specifying the size of the increased Board at least 100 days before November 16, 2018 (which is the first anniversary of the 2017 Annual Meeting), the stockholder’s notice with respect to nominees for any new positions created by such increase must be received not later than the close of business on the 10th day following the day on which such public announcement is first made by the Company.
Upon the written request of any record holder or beneficial owner of common stock entitled to vote at the Annual Meeting, the Companyannual meeting, we will provide, without charge, a copy of itsour Annual Report on Form 10-K for the fiscal year ended June 30, 2020, including any financial statements and any required financial statement schedules, as filed with the Securities and Exchange Commission for the fiscal year ended June 30, 2017.
SEC. Requests for a copy of the Annual Reportannual report should be mailed, faxed, or sent via e-maildelivered to Bruce C. Kirchhoff, Vice President, General Counsel andour Corporate Secretary, Royal Gold, Inc., 1660 Wynkoop 1144 15th Street, Suite 1000,2500, Denver, Colorado 80202-1132, 303-595-9385 (fax)80202 or corporatesecretary@royalgold.com.
STOCKHOLDERS ENTITLED TO VOTE AS OF RECORD DATE
This proxy statement is furnished to holders of Royal Gold, Inc. common stock, par value $0.01 per share, in connection with the solicitation of proxies on behalf of our Board of Directors to be voted at our 2020 virtual annual meeting of stockholders to be held on Wednesday, November 18, 2020, at 9 a.m. mountain time. Stockholders of record holding shares of our common stock at the close of business on September 21, 2020 (the “record date”) are eligible to vote at the virtual annual meeting and any postponement and adjournment of the annual meeting. There were 65,604,624 shares outstanding on the record date.
66 ROYAL GOLD, INC.
Other Information
INTERNET AVAILABILITY OF PROXY MATERIALS
We will furnish our proxy materials through a “notice and access” model via the internet in accordance with SEC rules. On or about October 5, 2020, we will furnish a “notice of internet availability” to our stockholders of record containing instructions on how to access the proxy materials and vote. In addition, instructions on how to request a printed copy of these materials may be found in the notice of virtual annual meeting. For more information on voting your stock, please see “Voting Your Shares” below.
Each share of Royal Gold common stock that you own as of the record date entitles you to one vote. If you are a stockholder of record, your proxy card shows the number of shares of our common stock that you own. If your stock is held in the name of your broker, bank, or another nominee, the nominee holding your stock will send you a voting instruction form. You may elect to vote in one of three methods:
● | By phone or the internet – You may vote your shares by following the instructions on your notice card, proxy card, or voting instruction form. If you vote by telephone or the internet, you do not need to return your proxy card. |
● | By Mail – If this proxy statement was mailed to you or if you requested that a proxy statement be mailed to you, you may vote your shares by signing and returning the enclosed proxy card or voting instruction form. If you vote by proxy card, your “proxy” (each or either of the individuals named on the proxy card) will vote your shares as you instruct on the proxy card. If you vote by voting instruction form, the bank, broker, or nominee holding your stock will vote your shares as you instruct on the voting instruction form. If you sign and return your proxy card, but do not give instructions on how to vote your shares, your shares will be voted as recommended by our Board (FOR proposals 1, 2, and 3). |
● | By voting at the virtual annual meeting – You may attend the annual meeting virtually and vote your shares through the online platform. All stockholders attending the meeting will be authenticated using your 16-digit control number included in your stockholder materials. You will be able to vote while the polls are open during the virtual annual meeting. |
INSTRUCTIONS FOR THE VIRTUAL ANNUAL MEETING
This year, our annual meeting will be a completely virtual meeting. There will be no physical meeting location. The meeting will only be conducted via a live virtual shareholder meeting. To participate in the virtual meeting, visit www.virtualshareholdermeeting.com/RGLD2020 and enter the 16-digit control number included on your notice of internet availability of the proxy materials, on your proxy card, or on the instructions that accompanied your proxy materials. If you lose your 16-digit control number, you may join the virtual annual meeting as a “Guest,” but you will not be able to vote, ask questions, or access the list of stockholders. You may begin to log into the meeting platform beginning at 8:45 a.m. mountain time on November 18, 2020. The meeting will begin promptly at 9 a.m. mountain time on November 18, 2020. The virtual meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. Participants should ensure that they have a strong WiFi connection wherever they intend to participate in the meeting. Participants should also give themselves plenty of time to log in and ensure that they can hear streaming audio prior to the start of the meeting. If you wish to submit a question prior to the virtual annual meeting, you may do so starting at 8:45 a.m. mountain time on November 18, 2020, via the virtual shareholder meeting platform. Questions pertinent to meeting matters will be answered during the meeting, subject to time constraints. Questions regarding personal matters are not pertinent to meeting matters and will not be answered. Any questions pertinent to meeting matters that cannot be answered during the meeting due to time constraints will be answered on our website at www.royalgold.com/investors/proxy-materials. The questions and answers will be available as soon as practical after the meeting and will remain available until one week after posting. If you encounter any technical difficulties with the virtual meeting platform on the meeting day, please call 800-586-1548 (Toll Free) or 303-562-9288 (International Toll). Technical support will be available starting at 8:45 a.m. mountain time on November 18, 2020, and will remain available until 30 minutes after the meeting has finished.
2020 PROXY STATEMENT 67
Other Information
REVOCATION OF PROXY OR VOTING INSTRUCTION FORM
You may revoke your proxy at any time before the proxy is voted at the annual meeting. This can be done by submitting another properly completed proxy card with a later date, sending a written notice of revocation to our Corporate Secretary with a later date, or attending and voting at the virtual annual meeting. You should be aware, however, that simply logging onto the virtual annual meeting will not automatically revoke your previously submitted proxy; rather, you must submit your vote at the virtual annual meeting or deliver written notice to us before the start of the virtual annual meeting. Written notices revoking a proxy should be sent to our Corporate Secretary at Royal Gold, Inc., 1144 15th Street, Suite 2500, Denver, Colorado 80202.
QUORUM AND VOTES REQUIRED TO APPROVE PROPOSALS
A majority of the outstanding shares of our common stock entitled to vote, represented in person or bkirchhoff@royalgold.com.by proxy, will constitute a quorum at the virtual annual meeting. Abstentions and broker non-votes will be counted as being present for purposes of determining whether there is a quorum. A “broker non-vote” occurs when a nominee holding shares for a beneficial owner does not vote those shares on a proposal because the nominee does not have discretionary voting authority and has not received voting instructions from the beneficial owner with respect to that proposal.
Cumulative voting is not permitted for the election of directors. Under Delaware law, holders of common stock are not entitled to appraisal or dissenters’ rights with respect to the matters to be considered at the annual meeting.
Proposal | Vote Required to Approve Proposals at a Meeting at Which a Quorum Is Present | Broker Non-Votes | Abstentions | ||||
1 | Election of Class III Director Nominees | Affirmative vote of a majority of the votes cast | No impact | No impact | |||
2 | Advisory Vote on Executive Compensation | Affirmative vote of a majority of the votes cast | No impact | ||||
3 | Ratification of Auditors | Affirmative vote of a majority of the votes cast | Nominees have the discretion to vote FOR; there will be no broker non-votes |
Broadridge Financial Solutions, Inc. will tabulate and certify votes at the virtual annual meeting.
In addition to solicitation of proxies by mail or by electronic data transfers, our directors, officers, and employees may, without additional compensation, make solicitations by telephone, facsimile, or personal interview. We engaged Saratoga Proxy Consulting LLC to assist us with the solicitation of proxies for a fee of $15,000, plus expenses. We will bear all costs of the solicitation of proxies. We will also reimburse the banks and brokers for their reasonable out-of-pocket expenses in forwarding proxy materials to beneficial owners of our common stock.
68 ROYAL GOLD, INC.
Other Information
ELIMINATING DUPLICATE MAILINGS
We have adopted a procedure called “householding,” which thein accordance with SEC has approved.rules. Under this procedure, we deliver a single copy of the Noticenotice of virtual annual meeting and, if applicable, theour proxy materials and the Annual Reportannual report to multiple stockholders who share the same address unless we received contrary instructions from one or more of the stockholders. This procedure reduces our printing costs, mailing costs, and fees. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written request, we will deliver promptly a separate copy of the Noticenotice of virtual annual meeting and, if applicable, theour proxy materials and the Annual Reportannual report to any stockholder at a shared address to which we delivered a single copy of any of these documents.
stockholder.
To receive a separate copy of the Noticenotice of virtual annual meeting and, if applicable, these proxy materials or the Annual Report, or to receive a separate copy of our proxy materials in theand annual report for this or future meetings, stockholders may contact us at the following address:
Bruce C. Kirchhoff
Vice President,Margaret McCandless
Assistant General Counsel, Chief Compliance Officer, and Corporate Secretary
Royal Gold, Inc.
1660 Wynkoop
1144 15th Street, Suite 1000
2500
Denver, Colorado 80202-113280202
corporatesecretary@royalgold.com
303-595-9385 (fax)
bkirchhoff@royalgold.com
Stockholders who hold shares in street name (as described on page 1)under the heading “Voting Your Shares,” above) may contact their brokerage firm, bank, broker-dealer, or other similar organization to request information about householding.
* * * * * * * * * * * * * *
BY ORDER OF THE BOARD OF DIRECTORS | |
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Denver, Colorado
October 5, 2020
462020 PROXY STATEMENT 69
*** Exercise Your Right to Vote *** Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on November 16, 2017. ROYAL GOLD, INC. You are receiving this communication because you hold shares in the company named above. This is not a ballot. You cannot use this notice to vote these shares. This communication presents only an overview of ROYAL GOLD, INC. 1660 WYNKOOP ST.,
1144 15TH STREET, SUITE 1000 2500
DENVER, CO 80202-1132 the more complete proxy materials that are available to you on the Internet. You may view the proxy materials online at www.proxyvote.com or easily request a paper copy (see reverse side). We encourage you to access and review all of the important information contained in the proxy materials before voting. proxy materials and voting instructions. E33193-P98119 See the reverse side of this notice to obtain Meeting Information Meeting Type:Annual Meeting For holders as of:September 19, 2017 Date: November 16, 2017Time: 9:00 AM MST Location: Ritz-Carlton Hotel 1881 Curtis Street Denver, Colorado 80202
80202-1161
Before You Vote How to Access the Proxy Materials Have the information that is printed in the box marked by the arrow XXXX XXXX XXXX XXXX (located on the by the arrow XXXX XXXX XXXX XXXX (located on the following page) in the subject line. How To Vote Please Choose One of the Following Voting Methods marked by the arrow XXXX XXXX XXXX XXXX (located on the following page) available and follow the instructions. E33194-P98119 Vote In Person: Many stockholder meetings have attendance requirements including, but not limited to, the possession of an attendance ticket issued by the entity holding the meeting. Please check the meeting materials for any special requirements for meeting attendance. At the meeting, you will need to request a ballot to vote these shares. Vote By Internet: To vote now by Internet, go to www.proxyvote.com. Have the information that is printed in the box Vote By Mail: You can vote by mail by requesting a paper copy of the materials, which will include a proxy card. Proxy Materials Available to VIEW or RECEIVE: NOTICE OF ANNUAL MEETING AND PROXY STATEMENTANNUAL REPORT How to View Online: following page) and visit: www.proxyvote .com. How to Request and Receive a PAPER or E-MAIL Copy: If you want to receive a paper or e-mail copy of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods to make your request: 1) BY INTERNET:www.proxyvote.com 2) BY TELEPHONE: 1-800-579-1639 3) BY E-MAIL*:sendmaterial@proxyvote.com * If requesting materials by e-mail, please send a blank e-mail with the information that is printed in the box marked Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before November 2, 2017 to facilitate timely delivery.
The Board of Directors recommends you vote FOR the following: 1. Election of Directors Nominees: 1a. C. Kevin McArthur 1b. Christopher M.T. Thompson 1c. Sybil E. Veenman The Board of Directors recommends you vote FOR proposals 2 and 3 and 1 year on proposal 4. 2. PROPOSAL to ratify the appointment of Ernst & Young LLP as independent registered public accountants of the Company for the fiscal year ending June 30, 2018. PROPOSAL to approve the advisory resolution relating to executive compensation. 3. 4. PROPOSAL to approve on an advisory basis, the preferred frequency of future votes on executive compensation. NOTE: In their discretion, the Proxies are also authorized to vote all of the shares of the undersigned upon such other business as may properly come before the Meeting. Management and Directors are not currently aware of any other matters to be presented at the Meeting. E33195-P98119 Voting Items
E33196-P98119
VOTE BY INTERNET
Before The Meeting - Go to www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ROYAL GOLD, INC. 1660 WYNKOOP ST., SUITE 1000 DENVER, CO 80202-1132 ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like
During The Meeting - Go to reducewww.virtualshareholdermeeting.com/RGLD2020
You may attend the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronicallymeeting via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and when prompted, indicatevote during the meeting. Have the information that you agree to receive or access proxy materials electronicallyis printed in future years. the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E33191-P98119 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | ||
D24623-P44601 | KEEP THIS PORTION FOR YOUR RECORDS | |
DETACH AND RETURN THIS PORTION ONLY | ||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
The Board of Directors recommends you vote FOR the following proposals: | |||
1. | The election of the three Class III director nominees identified in the accompanying proxy statement |
Nominees | ||||||||||||||
For | Against | Abstain | ||||||||||||
1a. Fabiana Chubbs | ☐ | ☐ | ☐ | |||||||||||
1b. Kevin McArthur | ☐ | ☐ | ☐ | |||||||||||
1c. Sybil Veenman | ☐ | ☐ | ☐ | For | Against | Abstain |
2. | The approval, on an advisory basis, of the compensation of our named executive officers | ☐ | ☐ | ☐ | ||||
3. | The ratification of the appointment of Ernst & Young LLP as our independent registered public accountant for the fiscal year ending June 30, 2021 | ☐ | ☐ | ☐ | ||||
NOTE: Such other business as may properly come before the meeting or any adjournment thereof. |
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners)
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice of Annual Meeting and Proxy Statement and Annual Report are available at www.proxyvote.com. E33192-P98119
D24624-P44601 |
ROYAL GOLD, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Bruce C. KirchhoffMargaret E. McCandless and William M. Hayes, or either of them, as attorneys, agents and proxies each with full power of substitution to vote, as designated on the reverse, side, all the shares of Common Stock of Royal Gold, Inc. held of record by the undersigned on September 19, 2017,21, 2020, at the Annual Meeting of Stockholders of Royal Gold, Inc. (the "Meeting") which will be held on November 16, 2017,18, 2020, virtually at the Ritz-Carlton Hotel, 1881 Curtis Street, Denver, Colorado,www.virtualshareholdermeeting.com/RGLD2020, at 9:00 a.m., Mountain Standard Time, or at any postponement or adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" EACH OF THE DIRECTOR NOMINEES AND "FOR" PROPOSALS 2 AND 3 AND "1 YEAR" ON PROPOSAL 4. 3. The proxies are also authorized to vote in their discretion upon any other matters as may properly come before the meeting, including any postponement or adjournment thereof.
The undersigned acknowledges receipt of this Proxy and a copy of the Notice of Annual Meeting and Proxy Statement, dated October 2, 2017. (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) 5, 2020.
Continued and to be signed on reverse side Address Changes/Comments: