DEF 14A 1 d105287ddef14a.htm DEF 14A DEF 14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant  þ

Filed by a Party other than the Registrant  ¨

Check the appropriate box:

 

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

Newmont Mining Corporation

 

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

Title of each class of securities to which transaction applies:

 

   

 

  (2)  

Aggregate number of securities to which transaction applies:

 

   

 

  (3)  

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

 

   

 

  (4)  

Proposed maximum aggregate value of transaction:

 

   

 

  (5)   Total fee paid:
   
   

 

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

Amount Previously Paid:

 

   

 

  (2)  

Form, Schedule or Registration Statement No.:

 

   

 

  (3)  

Filing Party:

 

   

 

  (4)  

Date Filed:

 

   

 

 

 

 


Table of Contents

 Newmont

 Proxy

 Statement

 2016

 

 

 

 

 

Annual Meeting of Stockholders

The Annual Meeting of Stockholders of

Newmont Mining Corporation will be held at:

Hotel du Pont

11th and Market Streets

Wilmington, Delaware 19801

On Wednesday, April 20, 2016

At 11:00 a.m., local time

 

LOGO

 


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LOGO   Newmont Mining Corporation

6363 South Fiddler’s Green Circle

Greenwood Village, Colorado 80111 USA

 

Notice of 2016 Annual Meeting of Stockholders

March 3, 2016

The Annual Meeting of Stockholders of Newmont Mining Corporation will be held on Wednesday, April 20, 2016 at 11:00 a.m., local time, at Hotel du Pont, 11th and Market Streets, Wilmington, Delaware 19801, to:

 

1. Elect Directors;

 

2. Ratify the Audit Committee’s appointment of Ernst & Young LLP as Newmont’s independent registered public accounting firm for 2016;

 

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

 

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

 

Record Date: February 23, 2016

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

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

 

By Order of the Board of Directors,  

Scan this QR code to

view digital versions

of our Proxy Statement

and 2015 Annual

Report.

  LOGO

 

LOGO

   
STEPHEN P. GOTTESFELD    
Executive Vice President and General Counsel    

 

  

You can vote in one of four ways:

 

  
LOGO   

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

  
LOGO   

 

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

  
LOGO   

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

 

  
LOGO   

 

 

Attend the meeting to vote IN PERSON

  

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


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LOGO

Table of Contents

 

   

2016 PROXY STATEMENT

    Page   

GENERAL INFORMATION

    1   

Notice of Internet Availability of Proxy Materials

    1   

Stockholders Entitled to Vote

    1   

Voting Your Shares

    1   

Quorum, Tabulation and Broker Non-Votes and Abstentions

    2   

Votes Required to Approve the Proposals

    3   

Revocation of Proxy or Voting Instruction Form

    3   

Solicitation Costs

    3   

Notes to Participants in Newmont Employee Retirement Savings Plans

    4   

Stockholder Proposals for the 2017 Annual Meeting of Stockholders

    4   

Voting Results

    4   

PROPOSAL NO. 1 — ELECTION OF DIRECTORS

    5   

Voting For Directors

    5   

Majority Vote Standard for the Election of Directors

    5   

Director Skills and Qualifications

    5   

Board of Directors Recommendation

    5   

Nominees

    5   

Director Nomination Process and Review of Director Nominees

    16   

Independence of Directors

    16   

Stock Ownership of Directors and Executive Officers

    17   

Stock Ownership of Certain Beneficial Owners

    19   

2015 Director Compensation

    20   

Committees of the Board of Directors and Attendance

    22   

Corporate Governance

    24   

Report of the Leadership Development and Compensation Committee on Executive Compensation

    27   

COMPENSATION DISCUSSION AND ANALYSIS

    28   

Executive Summary

    29   

Philosophy and Principles

    39   

Components of Total Compensation

    40   

2015 Compensation

    45   

“Realizable” Compensation for 2015

    61   

Looking Ahead to 2016

    61   

Post-Employment Compensation

    62   

Other Policies and Considerations

    63   

EXECUTIVE COMPENSATION TABLES

    66   

Section 16(a) Beneficial Ownership Reporting Compliance

    79   

PROPOSAL NO. 2 — RATIFY APPOINTMENT OF AUDITORS

    80   

Report of the Audit Committee

    82   

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

    83   

Other Matters

    86   

ANNEX A — Reconciliation of Non-GAAP Measures

    A-1   

 

Newmont Mining Corporation 2016 Proxy Statement   •  i


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LOGO

PROXY STATEMENT

General Information

This Proxy Statement is furnished to the stockholders of Newmont Mining Corporation (“Newmont,” the “Company” or “we”) in connection with the solicitation of proxies by the Board of Directors of the Company (the “Board of Directors” or the “Board”) to be voted at the Company’s 2016 Annual Meeting of Stockholders to be held on Wednesday, April 20, 2016 (the “Annual Meeting”). The Annual Meeting is being held for the purposes set forth in the accompanying Notice of 2016 Annual Meeting of Stockholders. The Proxy Statement, proxy card and 2015 Annual Report to Stockholders are being made available to stockholders on or about March 3, 2016.

 

Notice of Internet Availability of Proxy Materials.

 

On or about March 9, 2016, we will furnish a Notice of Internet Availability of Proxy Materials (“Notice”) to most of our stockholders containing instructions on how to access the proxy materials and to vote online. In addition, instructions on how to request a printed copy of these materials may be found on the Notice. For more information on voting your stock, please see “Voting Your Shares” below. If you received a Notice by mail, you will not receive a paper copy of the proxy materials unless you request such materials by following the instructions contained on the Notice. Your vote is important no matter the extent of your holdings.

 

Stockholders Entitled
to Vote.
 

The holders of record of common stock of Newmont, par value $1.60 per share,
at the close of business on February 23, 2016 (the “Record Date”) are entitled to
vote at the Annual Meeting. As of the Record Date, there were 529,161,509
shares outstanding.

 

 

Voting Your Shares.

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

 

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  If you hold Newmont Common Stock at your Broker - If your shares are held in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and the Notice or proxy materials, as applicable, are being forwarded to you by that organization. Your Voting Instruction Form from Broadridge or your Notice provides information on how to vote your shares. The organization holding your account is considered the shareholder of record for purposes of voting at the Annual Meeting.
  If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, the organization that holds your shares may generally vote on “routine” matters such as ratification of auditors but cannot vote on “non-routine” matters, which now include matters such as votes for the Election of Directors proposal and the Say-on-Pay proposal. Thus, if the organization that holds your shares does not receive instructions from you on how to vote your shares on a “non-routine” matter, that organization will inform the inspector of election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a “broker non-vote.”

 

   

Quorum, Tabulation

and Broker Non-Votes

and Abstentions.

 

Quorum. The holders of a majority of the outstanding shares of capital stock of the Company entitled to vote at the Annual Meeting must be present in person or represented by proxy in order to constitute a quorum for all matters to come before the meeting. For purposes of determining the presence of a quorum, “shares of capital stock of the Company” include all shares of common stock entitled to vote at the Annual Meeting.

 

 

Tabulating Votes and Voting Results. Votes at the Annual Meeting will be tabulated by one or more inspectors of election who will be appointed by the Chair of the meeting and who will not be candidates for election to the Board of Directors. The inspectors of election will treat shares of capital stock represented by a properly signed and returned proxy as present at the Annual Meeting for purposes of determining a quorum, without regard to whether the proxy is marked as casting a vote or abstaining.

 

 

Broker Non-Votes and Abstentions. Abstentions and “broker non-votes” as to particular matters are counted for purposes of determining whether a quorum is present at the Annual Meeting. Abstentions are counted in tabulations of the votes cast on proposals presented to stockholders (except with respect to the Election of Directors, where abstentions are excluded), whereas broker non-votes are not counted for purposes of determining whether a proposal has been approved. Except with respect to the Election of Directors, where abstentions are excluded, abstentions have the same effect as votes against proposals presented to stockholders. A “broker non-vote” occurs when a nominee holding shares for a beneficial owner votes on one proposal, but does not vote on another proposal because the nominee does not have discretionary voting power and has not received instructions to do so from the beneficial owner.

 

   

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

 

 

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Votes Required to
Approve the

Proposals.

 

Proposal

 

Vote Required

  Election of Directors   Majority of votes cast for the Nominees
  Ratification of independent registered public accounting firm for 2016   Majority of stock present in person or by proxy and entitled to vote
  Approve, on an advisory basis, the compensation of the Named Executive Officers   Non-binding advisory vote — majority of stock present in person or by proxy and entitled to vote
 

Election of Directors. Brokers, banks and other financial institutions can no longer vote your stock on your behalf for the Election of Directors if you have not provided instructions on your voting instruction form, by telephone or by Internet. For your vote to be counted, you must submit your voting instructions to your broker or custodian.

 

 

Ratify Ernst & Young LLP as the Company’s Independent Registered Public Accounting Firm for 2016. The affirmative vote of a majority of the shares present and entitled to vote, in person or by proxy, at the Annual Meeting is required to ratify the Audit Committee’s appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2016. Even if you do not instruct your broker how to vote with respect to this item, your broker may vote your shares with respect to this proposal.

 

 

Advisory Say-On-Pay Vote. Because the vote on Compensation of the Named Executive Officers is advisory in nature, it will not: (1) affect any compensation already paid or awarded to any Named Executive Officer, (2) be binding on or overrule any decisions by the Board of Directors, (3) create or imply any additional fiduciary duty on the part of the Board of Directors, and (4) restrict or limit the ability of stockholders to make proposals for inclusion in proxy materials related to executive compensation. If you do not instruct your broker how to vote with respect to this item, your broker may not vote your shares with respect to this proposal. For your vote to be counted, you must submit your voting instructions to your broker or custodian.

 

 

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

 

   

Revocation of Proxy or Voting Instruction Form.

 

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

 

Solicitation Costs.

  The cost of preparing and mailing the Notice, requests for proxy materials, and the cost of solicitation of proxies on behalf of the Board of Directors will be borne by the Company. The Notice will be furnished to the holders of the Company’s common stock on or about March 9, 2016. In addition, solicitation of proxies and Voting Instruction Forms may be made by certain officers and employees of the Company by mail, telephone or in person. The Company has retained Okapi Partners LLC to aid in the solicitation of brokers, banks, intermediaries and other

 

Newmont Mining Corporation 2016 Proxy Statement   •  3


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institutional holders for a fee of $15,000. The Company also will reimburse brokerage firms and others for their expenses in forwarding proxy materials to beneficial owners of common stock.

 

   

Notes to Participants in Newmont Employee Retirement Savings Plans.

 

Participants in the Retirement Savings Plan of Newmont and Retirement Savings Plan for Hourly-Rated Employees of Newmont. If you are a participant in the Retirement Savings Plan of Newmont or Retirement Savings Plan for Hourly-Rated Employees of Newmont (the “401(k) Plans”) and hold the Company’s common stock under either of the 401(k) Plans, the shares of Newmont common stock which are held for you under the 401(k) Plans may be voted through the proxy card accompanying this mailing. The 401(k) Plans are administered by Fidelity Investments, as trustee. The trustee, as the stockholder of record of the Company’s common stock held in the plans, will vote the shares held for you in accordance with the directions you provide. If you do not vote your shares by 11:59 p.m. Eastern time on April 15, 2016, the trustee will not vote your common shares in the 401(k) Plans.

 

Stockholder Proposals for the 2017 Annual Meeting of Stockholders.

  For a stockholder proposal to be included in the proxy statement and form of proxy for the 2017 Annual Meeting, the proposal must have been received by us at our principal executive offices no later than November 9, 2016. Proposals should be sent to the attention of the Corporate Secretary of the Company (attention: Logan Hennessey) at 6363 South Fiddler’s Green Circle, Greenwood Village, Colorado 80111 USA. Proposals must conform to and include the information required by SEC Rule 14a-8. We are not required to include in our proxy statement and form of proxy a stockholder proposal that was received after that date or that otherwise fails to meet the requirements for stockholder proposals established by Securities and Exchange Commission (“SEC”) regulations.
   

Our Board recently amended our By-Laws to permit a stockholder (or a group of no more than 20 stockholders) who has maintained continuous qualifying ownership of at least 3% of our outstanding common stock for at least three years and has complied with the other requirements set forth in our By-Laws, to submit Director nominees (up to the greater of 2 Directors or 20% of the Board) for inclusion in our proxy statement if the stockholder(s) and the nominee(s) satisfy the requirements set forth in our By-Laws. Notice of Director nominees submitted under these By-law provisions must be received by the Corporate Secretary of the Company (attention: Logan Hennessey) at 6363 South Fiddler’s Green Circle, Greenwood Village, Colorado 80111 USA by no earlier than October 10, 2016, and no later than November 9, 2016. Notice must include the information required by our By-Laws, which are available on our website at http://www.newmont.com/about-us/governance-and-ethics/board-and-committee-governance/.

 

In addition, under our By-Laws, stockholders not using proxy access in connection with Director nominations must give advance notice of nominations for Directors or other business to be addressed at the 2017 Annual Meeting and such notice must be received at the principal executive offices of the Company no later than the close of business on February 19, 2017, and not earlier than the close of business on January 20, 2017. The advance notice must be delivered to the attention of the Corporate Secretary of the Company (attention: Logan Hennessey) at 6363 South Fiddler’s Green Circle, Greenwood Village, Colorado 80111 USA. Notice must include the information required by our By-Laws.

 

Voting Results.

 

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

 

 

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Proposal No. 1 — Election of Directors

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

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

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

Director Skills and Qualifications. In addition to meeting the minimum qualifications set out by the Board of Directors under “Director Nomination Process and Review of Director Nominees,” on page 16, each nominee also brings a strong and unique background and set of skills to the Board, giving the Board, as a whole, competence and experience in a wide variety of areas, including board service, corporate governance, compensation, executive management, private equity, finance, mining, operations, manufacturing, marketing, government, international business and health, safety, environmental and social responsibility. The unique background, skills and qualifications that led the Board of Directors and the Corporate Governance and Nominating Committee to the conclusion that each of the nominees should serve as a Director for Newmont are set forth in the “Nominees” section below.

 

The Board of Directors recommends that the stockholders vote “FOR” all of the following nominees.

Nominees. Each of the ten persons named below is a nominee for election as a Director at the Annual Meeting for a term of one year or until his/her successor is elected and qualified. Unless authority is withheld, the proxies will be voted for the election of such nominees. All such nominees are currently serving as Directors of the Company and were elected to the Board of Directors at the last Annual Meeting except for Gregory H. Boyce and Julio M. Quintana, who were elected to the Board of Directors on October 27, 2015. If any such nominees cannot be a candidate for election at the Annual Meeting, then the proxies will be voted either for a substitute nominee designated by the Board of Directors or for the election of only the remaining nominees.

 

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

 

 

 

LOGO

 

Director Since: 2015

Independent

 

Board Committees:

Safety and Sustainability

  

 

GREGORY H. BOYCE

 

Gregory H. Boyce, 61, Retired Executive Chairman of Peabody Energy Corporation from 2007 to 2015. Mr. Boyce joined Peabody in 2003 as Chief Operating Officer, and served as Chief Executive Officer from 2006 to 2015. Prior to his service with Peabody, Mr. Boyce served in various executive roles with Rio Tinto Group from 1989 to 2003.

 

Director Qualifications:

    CEO/Executive Management Skills — Experience as former President and Chief Executive Officer of Peabody Energy Corporation and other executive management positions noted above.

 

    Operational and Industry Expertise — Over 38 years of experience in the global energy and mining industries. Past Chair of the Coal Industry Advisory Board, past member of the National Coal Council, and past Chairman of the National Mining Association. Member of the Advisory Council of the University of Arizona’s Department of Mining and Geological Engineering, and the School of Engineering and Applied Science National Council at Washington University. Awarded a Bachelor’s Degree in Mining Engineering from the University of Arizona and completed the Advanced Management Program from the Graduate School of Business at Harvard University.

 

•   Health, Safety, Environmental and Social Responsibility Experience — Experience managing matters related to regulatory, policy and social responsibility in executive roles, as well as during service on ESR committees of both Marathon Oil and Monsanto Company. Member of the Board of Trustees of Washington University of St. Louis and past member of Civic Progress in St. Louis.

 

•   International Experience — Extensive senior executive experience working with multinational energy and mining operations, including with Peabody Energy Corporation and Rio Tinto plc (an international natural resource company) as Chief Executive Officer – Energy. Prior to his service with Rio Tinto, Mr. Boyce worked for over 10 years in various operational roles of increasing responsibility with Kennecott, a global natural resources company. Current service on the Board of Monsanto Company, a multinational agrochemical and agricultural biotechnology company.

 

   Compensation Expertise — Experience serving as a Chair of Marathon Oil’s Compensation Committee. Participation in compensation, benefits and related decisions in senior executive roles.

 

Board Experience:

Service on the Company’s Board of Directors since October 2015, as well as on the boards of several other companies, including as Executive Chairman of Peabody Energy Company from 2007 to 2015 and as a director from 2005 to 2015; Marathon Oil Corporation from 2008 to present and Monsanto Company from April 2013 to present.

 

 

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LOGO

 

Director Since: 2011 Independent

 

Board Committees:

Audit

  

 

BRUCE R. BROOK

 

Bruce R. Brook, 60, currently serves as Chairman for Programmed Group and as a Director for CSL Limited. He served as a Director of Boart Longyear from 2007 to 2015. In addition, Mr. Brook retired in 2012 after six years of service as a member of the Financial Reporting Council in Australia, an agency of the Australian Commonwealth which oversees the work of the Accounting Standards Board and the Auditing Standards Board, and advises the Australian Government on matters relating to corporate regulation. In 2013 Mr. Brook was appointed to the Director Advisory Panel of the Australian Securities and Investment Commission, the Australian Corporate Regulator.

 

Director Qualifications:

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

 

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

 

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

 

Board Experience:

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

 

 

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LOGO

 

Director since: 2012

Independent

 

Board Committees:

Audit

  

 

J. KOFI BUCKNOR

 

J. Kofi Bucknor, 60, CEO of J. Kofi Bucknor & Associates, a Ghanaian corporate finance advisory and propriety investing firm established in 2000. Former Treasurer of the African Development Bank, former Executive Director, Lehman Brothers, former Managing Director of CAL Merchant Bank, Ghana, former Chairman of Ghana’s Investment Advisory Committee and former Chairman of the Ghana Stock Exchange. Mr. Bucknor’s interests in Ghana include investments in fishing and oil services. Managing Partner of Kingdom Africa Management (and its’ predecessor Kingdom Zephyr Africa Management), a private equity fund manager from 2003 to present.

 

Director Qualifications:

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

 

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

 

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

 

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

 

Board Experience:

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

 

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LOGO

 

Director since: 2000

Independent Chair

 

Board Committees:

Corporate Governance and Nominating (Chair)

Leadership Development and Compensation

  

 

VINCENT A. CALARCO

 

Vincent A. Calarco, 73, Non-Executive Chairman of Newmont Mining Corporation from 2008 to present. Former Chairman of Crompton Corporation (now known as Chemtura Corporation), a specialty chemical company, having served in that position from 1996 to 2004. President and Chief Executive Officer thereof from 1985 to 2004.

 

Director Qualifications:

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

 

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

 

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

 

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

 

   Compensation Expertise — Participation in compensation, benefits and related decisions in senior executive roles and service as a member of the Company’s Leadership Development and Compensation Committee.

 

Board Experience:

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

 

Newmont Mining Corporation 2016 Proxy Statement   •  9


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LOGO

 

Director since: 2007

Independent

 

Board Committees:

Leadership Development and Compensation

Safety and Sustainability (Chair)

  

 

JOSEPH A. CARRABBA

 

Joseph A. Carrabba, 63, Retired Chairman, President and Chief Executive Officer of Cliffs Natural Resources Inc., formerly Cleveland-Cliffs Inc., from May 2007 to November 2013. Served as Cliffs Natural Resources Inc.’s President and Chief Executive Officer from 2006 to 2007 and as President and Chief Operating Officer from 2005 to 2006. Previously served as President and Chief Operating Officer of Diavik Diamond Mines, Inc. from 2003 to 2005.

 

Director Qualifications:

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

 

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

 

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

 

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

 

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

 

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

 

Board Experience:

Service on the Company’s Board of Directors since 2007, as well as on the boards of several other companies, including as a current director of the following exchange listed companies KeyCorp, Aecon and Timken Steel. He is also a director of NioCorp Developments Ltd., a TSX:V listed company(1). Formerly served as a Director of Cliffs Natural Resources Inc. from 2006 through 2013.

 

(1)  Secondary exchange listed companies are exempted for purposes of the Company’s corporate governance guidelines related to director service on other boards due to the less onerous listing requirements and less burdensome time commitments. As such, Mr. Carrabba is not considered to serve on more than four boards for purposes of the Company’s guidelines. The Corporate Governance and Nominating Committee has considered his other commitments and determined that no conflict exists and that service on other boards does not negatively impact Mr. Carrabba’s attendance, participation or effectiveness.

 

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LOGO

 

Director since: 2005 Independent Vice Chair

 

Board Committees: Audit (Chair), Corporate Governance and Nominating

  

 

NOREEN DOYLE

 

Noreen Doyle, 66, Retired First Vice President of the European Bank for Reconstruction and Development (“EBRD”), having served in that position from 2001 to 2005, and in other executive positions with the EBRD since 1992. Currently serves as the Company’s independent Vice Chair of the Board of Directors.

 

Director Qualifications:

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

 

    International Experience — Extensive senior executive experience working with businesses, global and local, and governments throughout Europe including eastern Europe and the former Soviet Union. Current service as the Chair of the BBA, a leading trade association for the UK banking sector with member banks with operations in 180 jurisdictions worldwide, and as a member of the U.K. Panel on Takeovers and Mergers.

 

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

 

   Compensation Expertise — Served as Chair of the QinetiQ Remunerations committee; participated in compensation and benefits decisions as an executive at EBRD.

 

Board Experience:

Service on the Company’s Board of Directors since 2005, as well as on the boards of several other companies, including as the current Vice Chair and Lead Independent Director of the Board of Credit Suisse Group. Previous service as a director of QinetiQ plc and Rexam PLC and as a former member of advisory panels for Macquarie European Infrastructure Fund and Macquarie Russia and CIS Infrastructure Fund.

 

Newmont Mining Corporation 2016 Proxy Statement   •  11


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LOGO

 

Director since: 2013 Management—

President and CEO

 

  

 

GARY J. GOLDBERG

 

Gary J. Goldberg, 57, was appointed President and Chief Executive Officer and joined Newmont’s Board of Directors on March 1, 2013. Previously, Mr. Goldberg served as President and Chief Operating Officer of Newmont Mining Corporation from July 2012 until March 1, 2013, and as Executive Vice President and Chief Operating Officer from December 2011 to July 2012.

 

Director Qualifications:

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

 

   Operational and Industry Expertise — More than 35 years of mining industry experience with senior executive oversight of operations, marketing, mergers and acquisitions, divestments, procurement, labor relations and regulatory issues. Served as Chairman of the United States National Mining Association from 2008 to 2010. Awarded Bachelor of Science degree in Mining Engineering from the University of Wisconsin-Platteville.

 

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

 

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

 

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

 

Board Experience:

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

 

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LOGO

 

Director since: 2005 Independent

 

Board Committees:

Leadership Development and Compensation (Chair)

Corporate Governance and Nominating

  

 

VERONICA M. HAGEN

 

Veronica M. Hagen, 70, Chief Executive Officer of Polymer Group, Inc. from April 2007 through August 2013. President and Chief Executive Officer of Sappi Fine Paper North America from 2004 to 2007. Executive positions with Alcoa, Inc. from 1998 to 2004, including Vice President and Chief Customer Officer from 2003 to 2004 and President, Alcoa Engineered Products from 2001 to 2003.

 

Director Qualifications:

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

 

   Industry and Operational Expertise — Extensive mining industry experience, including in executive positions with Alcoa, Inc., an international aluminum producer, for over 8 years, including as former Vice President and Chief Customer Officer and former President, Alcoa Engineered Products.

 

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

 

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

 

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

 

Board Experience:

Service on the Company’s Board of Directors since 2005, as well as on the boards of several other companies, including as current Lead Director of Southern Company and current director of American Water Works Company, Inc. Former director of Jacuzzi Brands, Inc.

 

Newmont Mining Corporation 2016 Proxy Statement   •  13


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LOGO

 

Director since: 2011 Independent

 

Board Committees:

Safety and

Sustainability

  

 

JANE NELSON

 

Jane Nelson, 55, Founding Director of the Corporate Social Responsibility Initiative at Harvard Kennedy School, and a nonresident senior fellow at the Brookings Institution. A former senior associate of the Programme for Sustainability Leadership at Cambridge University and former Director at the International Business Leaders Forum from 1993 to 2009, and a senior advisor until 2013.

 

Director Qualifications:

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

 

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

 

    Academic Experience — Director, Corporate Social Responsibility Initiative and adjunct lecturer in Public Policy, Harvard Kennedy School. Former faculty, Corporate Social Responsibility executive education program, Harvard Business School. Nonresident senior fellow at the Brookings Institution and a former senior associate at Cambridge University’s Programme for Sustainability Leadership. Author of five books, including the Academy of Management’s 2015 Best Book Award in Social Issues in Management division, and over 80 publications on the topics of corporate responsibility, sustainability and international development.

 

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

 

Board Experience:

Service on the Company’s Board of Directors since 2011. Currently serves on the Boards of Directors of the following non-public entities: the Abraaj Group, FSG, and Chevron’s Niger Delta Partnership Initiative Foundation. Prior service on the Boards of Directors of SITA (now SUEZ Environment) and the World Environment Center.

 

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LOGO

 

Director Since: 2015 Independent

 

Board Committees:

Audit

  

 

JULIO M. QUINTANA

 

Julio M. Quintana, 56, Retired President and Chief Executive Officer of Tesco Corporation from September 2005 to December 2014 and as a Director from September 2004 to May 2015. Served as Tesco’s Executive Vice President and Chief Operating Officer from 2004 to 2005. Served in various executive roles for Schlumberger Technology Corporation from 1999 to 2004. Prior to Schlumberger, Mr. Quintana spent nearly 20 years in the oil and gas exploration and production business in various operational roles for Unocal Corporation.

 

Director Qualifications:

    CEO/Executive Management Skills — Experience as former President and Chief Executive Officer of Tesco Corporation, a public company listed on NASDAQ, and other executive management positions noted above.

 

    Operational and Industry Expertise — Over 35 years of experience in various aspects of the oil and gas exploration and production industry, including strong experience in upstream operations, a deep understanding of drilling and asset management technologies as former President and Chief Executive Officer and as Executive Vice President and Chief Operating Officer of Tesco Corporation, former Vice President of Exploitation of Schlumberger and as a current director of SM Energy since 2006. Awarded a Bachelor’s Degree in Mechanical Engineering from University of Southern California, Los Angeles.

 

    International Experience — Extensive senior executive experience working with multinational drilling and exploration operations, including with Tesco Corporation. Drove the Latin America business for Schlumberger. Prior to Schlumberger, worked for almost 20 years in various operational roles for Unocal Corporation, a global petroleum exploration company.

 

    Financial Experience— Extensive financial management experience in senior executive roles and as a member of the Audit Committee for SM Energy.

 

    Compensation Expertise — Experience serving as a member of SM Energy’s Compensation Committee. Participation in compensation, benefits and related decisions in senior executive, public company roles.

 

Board Experience:

Service on the Company’s Board of Directors since October 2015, as well as on the boards of several other companies, including as a current director of SM Energy Company since 2006. Formerly served as a Director of Tesco Corporation from 2004 through 2015.

 

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

 

Newmont Mining Corporation 2016 Proxy Statement   •  15


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

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

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

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

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

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

Mr. Brook is a director of Programmed Group, which provides certain staffing to the Company. The relationship with Programmed Group was carefully considered by the Corporate Governance and Nominating Committee and

 

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the Board. Given that the relationship arises only as a result of Mr. Brooks’ position as an independent outside director and that no other financial, personal or other relationship exists that might influence a reasonable person’s objectivity, the Corporate Governance and Nominating Committee and the Board determined that the relationship is not material for independence purposes.

Mr. Boyce serves on the advisory board for the University of Arizona’s Lowell Institute for Mineral Resources. Mr. Boyce is not an employee of the Lowell Institute and the advisory board is not compensated for such service. His appointment was in no way related to Newmont’s donations or involvement. The Company donated approximately $280,000 to the Lowell Mineral Institute in its 2015 fiscal year. The Company’s donation reflects its strong interest in promoting technological mining research and advancing the sustainable development of mineral resources. The Board of Directors has considered these circumstances and determined that the donation does not constitute a material relationship with the Company that would affect independence, and that no financial, personal or other relationship exists that might influence a reasonable person’s objectivity.

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

 

Gregory H. Boyce

   Vincent A. Calarco    Veronica M. Hagen

Bruce R. Brook

   Joseph A. Carrabba    Jane Nelson

J. Kofi Bucknor

   Noreen Doyle    Julio M. Quintana

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

Stock Ownership of Directors and Executive Officers. As of February 23, 2016, the Directors and executive officers of the Company as a group beneficially owned, in the aggregate, 1,182,407 shares of the Company’s outstanding capital stock, constituting, in the aggregate, less than 1% of the Company’s outstanding capital stock.

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

 

Newmont Mining Corporation 2016 Proxy Statement   •  17


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The following table sets forth the beneficial ownership of common stock as of February 23, 2016, held by (a) each then current Director and nominee; (b) the Chief Executive Officer, the Chief Financial Officer and each of the other highly compensated executive officers (the “Named Executive Officers”); and (c) all then current Directors and executive officers as a group. The address for each of the named individuals below is c/o Newmont Mining Corporation, 6363 South Fiddler’s Green Circle, Greenwood Village, Colorado 80111 USA.

 

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

Non-Employee Directors

                                       

Gregory H. Boyce

    —          7,722        —          —          7,722   

Bruce R. Brook

    20,212        —          —          —          20,212   

J. Kofi Bucknor

    18,662        —          —          —          18,662   

Vincent A. Calarco

    4,686        32,659        —          —          37,345   

Joseph A. Carrabba

    —          30,165        —          —          30,165   

Noreen Doyle

    —          32,480        —          —          32,480   

Veronica M. Hagen

    —          32,480        —          —          32,480   

Jane Nelson

    —          20,212        —          —          20,212   

Julio M. Quintana

    —          7,722        —          —          7,722   

Named Executive Officers

                                       

Gary Goldberg(6)

    145,424        61,181        524        —          207,129   

Laurie Brlas

    17,661        22,695        —          —          40,356   

Randy Engel

    111,740        20,406        4,108        143,345        279,599   

Stephen Gottesfeld

    47,671        15,227        1,597        76,260        140,755   

Chris Robison

    91,350        31,739        375        —          123,464   

All Directors and executive officers as a group, including those named above (18 persons)(7)

    569,332        361,569        7,901        243,605        1,182,407   

 

(1) 

Represents shares of the Company’s common stock held, or which the officer has the right to acquire within 60 days after February 23, 2016, pursuant to Performance Leveraged Stock Units (“PSUs”). PSUs are awards granted by the Company and payable, subject to performance and vesting requirements, as set forth more fully below in the CD&A, in shares of the Company’s common stock. Shares underlying PSUs vesting within 60 days after February 23, 2016, for which the performance measurements have been met, are included in this column as follows: Gary Goldberg, 63,648; Randy Engel, 21,138; Stephen Gottesfeld, 5,329; Chris Robison, 43,653; and all executive officers as a group, 170,375.

 

(2) 

For 2015, director stock units (“DSUs”) were awarded to all non-employee Directors under the 2013 Stock Incentive Compensation Plan, except Messrs. Brook and Bucknor elected to receive shares of the Company’s common stock. The DSUs represent the right to receive shares of common stock and are immediately fully vested and non-forfeitable. The holders of DSUs do not have the right to vote the underlying shares; however, the DSUs accrue dividend equivalents, which are paid at the time the common shares are issued. Upon retirement from the Board of Directors, the holder of DSUs is entitled to receive one share of common stock for each DSU. The amounts noted in this column for non-employee Directors represent DSUs.

 

(3) 

Restricted Stock Units (“RSUs”) of the Company’s common stock granted prior to April 24, 2013, were awarded under the Company’s 2005 Stock Incentive Plan and RSUs and Strategic Stock Units (“SSUs”) of the Company’s common stock granted after April 24, 2013, are awarded under the Company’s 2013 Stock Incentive Plan. The RSUs do not have voting rights, and are subject to forfeiture risk and other restrictions. The RSUs accrue dividend equivalents, which are paid at the time the units vest and common stock is issued. Shares underlying SSUs granted in the form of RSUs vesting within 60 days after February 23, 2016, for which the performance metrics have been met, are included in this column as follows: Gary Goldberg, 37,268; Laurie Brlas, 11,282; Randy Engel, 12,374; Stephen Gottesfeld, 9,358; and all executive officers as a group, 92,107. Shares underlying RSUs vesting within 60 days after February 23, 2016, are included in this column as follows: Gary Goldberg, 23,913; Laurie Brlas, 11,413; Randy Engel, 8,032; Stephen Gottesfeld, 5,869; Chris Robison, 31,739; and all executive officers as a group, 106,022. This column does not include RSUs that vest more than 60 days after February 23, 2016.

 

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(4) 

Includes equivalent shares of the Company’s common stock held by the trustee in the Company’s 401(k) Plans for each participant as of the January 31, 2016, plan statement date and is based on the Company’s estimation of the share value correlated with the number of units in the fund. Each participant in such plan has the right to instruct the trustee as to how the participant’s shares should be voted.

 

(5) 

Includes shares of the Company’s common stock that the executive officers have the right to acquire through stock option exercises within 60 days after February 23, 2016.

 

(6) 

Mr. Goldberg’s ownership includes 10,000 shares held in the Gary J and Beth A Goldberg Revocable Trust.

 

(7) 

Includes only the beneficial ownership of those persons serving as directors and executive officers as of February 23, 2016.

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

 

Name and Address of Beneficial Owner  

Title of

Class

    Amount and
Nature of
Beneficial Ownership
    Percentage
of Class
 

BlackRock, Inc.

    Common Stock        (1     10.1

55 East 52nd Street

       

New York, NY 10055

                       

The Vanguard Group Inc.

    Common Stock        (2     8.46

100 Vanguard Blvd.

       

Malvern, PA 19355

                       

State Street Corporation

    Common Stock        (3     5.0

State Street Financial Center, One Lincoln Street

       

Boston, MA 02111

                       

 

(1) 

As reported on Schedule 13G/A as filed on January 8, 2016, as of December 31, 2015, BlackRock, Inc. and its subsidiaries beneficially owned 53,619,829 shares, had sole voting power of 47,304,403 shares and sole dispositive power of 53,619,829 shares of Newmont common stock.

 

(2) 

As reported on Schedule 13G/A as filed on February 11, 2016, as of December 31, 2015, The Vanguard Group and its subsidiaries beneficially owned 44,808,351 shares, had sole voting power of 959,392 shares and sole dispositive power of 43,779,426 shares of Newmont common stock.

 

(3) 

As reported on Schedule 13G as filed on February 16, 2016, as of December 31, 2015, State Street and its subsidiaries beneficially owned 26,474,553 shares, had shared voting and shared dispositive power over all 26,474,553 shares of Newmont common stock.

Director Compensation. The annual compensation for non-employee Directors for their service on the Board of Directors for each of 2015 and 2016 is set forth below:

 

Annual Retainer:

  $115,000 for each Director
  $25,000 for the Chair of the Audit Committee
  $12,000 for each Audit Committee Member
  $20,000 for the Chair of the Leadership Development and Compensation Committee
  $12,000 for each Leadership Development and Compensation Committee Member
  $15,000 for the Chair of the Corporate Governance and Nominating Committee
  $10,000 for each Corporate Governance and Nominating Committee Member
  $15,000 for the Chair of the Safety and Sustainability Committee
  $10,000 for each Safety and Sustainability Committee Member
  $300,000 for the Non-Executive Chair of the Board

Stock Award:

  $150,000 of common stock or director stock units each year under the 2013 Stock Incentive Plan. The fair market value is determined on the first business day following election by the Board or re-election at the Company’s Annual Meeting, or as soon as administratively possible.

 

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The following table summarizes the total compensation paid to or earned by the Company’s non-employee Directors during 2015:

2015 Director Compensation

 

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

Gregory H. Boyce

    $22,418        $150,000        –0–        $172,418   

Bruce R. Brook

    $127,000        $150,000        $3,000        $280,000   

J. Kofi Bucknor

    $127,000        $150,000        –0–        $277,000   

Vincent A. Calarco

    $452,000        $150,000        –0–        $602,000   

Joseph A. Carrabba

    $152,000        $150,000        –0–        $302,000   

Noreen Doyle

    $162,000        $150,000        $5,000        $317,000   

Veronica M. Hagen

    $151,505        $150,000        –0–        $301,505   

Jane Nelson

    $125,000        $150,000        –0–        $275,000   

Donald C. Roth(4)

    $45,885        –0–        $82,329        $128,214   

Julio M. Quintana

    $22,777        $150,000        –0–        $172,777   

 

(1) 

Mr. Goldberg, the only Director who is also an employee, receives no additional compensation for his service on the Board. His compensation is shown in the Summary Compensation Table.

 

(2) 

For 2015, all non-employee Directors elected to receive $150,000 in the form of director stock units (“DSUs”), except Messrs. Brook and Bucknor who elected to receive their awards in the form of the Company’s common stock. The amounts set forth next to each award represent the aggregate grant date fair value of such award computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 718 (“ASC 718”) which was the average of the high and low sales price on the date of grant, which was April 23, 2015 of $23.215 for Messrs. Brook, Bucknor, Calarco and Carrabba, and Mmes. Doyle, Hagen and Nelson; and was October 28, 2015 of $19.425 for Messrs. Boyce and Quintana. There are no other assumptions made in the valuation of the stock awards.

 

(3) 

The amount shown as All Other Compensation represents contributions made under the Company’s charitable Matching Gifts Program. Non-Employee Directors are eligible to participate in the Company’s Matching Gifts Program on the same basis as employees, pursuant to which the Company will match dollar-for-dollar, contributions to qualified tax-exempt organizations, not more than $5,000 per eligible donor per calendar year.

 

(4) 

Mr. Roth retired from the Board effective as of April 22, 2015. The amount shown as All Other Compensation represents accrued dividends paid to Mr. Roth in connection with the shares of common stock underlying the 26,198 director stock units awarded to Mr. Roth from 2005 to 2014 pursuant to the Company’s director compensation program.

Outstanding Awards. The following table shows outstanding equity compensation for all non-employee Directors of the Company as of December 31, 2015, calculated with the closing price of $17.99:

 

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

Gregory H. Boyce

    7,722        $138,919   

Bruce R. Brook(1)

    —          —     

J. Kofi Bucknor(1)

    —          —     

Vincent A. Calarco

    32,659        $587,535   

Joseph A. Carrabba

    30,165        $542,668   

Noreen Doyle

    32,480        $584,315   

Veronica M. Hagen

    32,480        $584,315   

Jane Nelson

    20,212        $363,614   

Julio M. Quintana

    7,722        $138,919   

 

(1) 

In 2015, Messrs. Brook and Bucknor elected to receive their director equity awards in the form of common stock rather than in the form of DSUs, which amount is included in the Common Stock column of the Stock Ownership of Directors and Executive Officers Table set forth above. See footnote 2 to such table.

 

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Share Ownership Guidelines. All Directors are encouraged to have a significant long-term financial interest in the Company. To encourage alignment of the interests of the Directors and the stockholders, each Director is expected to beneficially own shares of common stock (or hold director stock units) of the Company having a market value of five times the annual cash retainer payable under the Company’s Director compensation policy. Directors elected before January 1, 2011, are expected to meet this requirement. Directors elected after January 1, 2011, are expected to meet this requirement within five years of becoming a Director. Taking into consideration the volatility of the stock market, the impact of gold, copper and other commodity price fluctuations on the Company’s share price and the long-term nature of the ownership guidelines, it would be inappropriate to require Directors to increase their holdings because of a temporary decrease in the price of the Company’s shares. As such, once the guideline is achieved, future fluctuations in price are not deemed to affect compliance. Specifically, if a decline in the Company’s share price causes a Director’s failure to meet the guideline, the Director will not be required to purchase additional shares, but such Director will refrain from selling any shares until the threshold has again been achieved. Compliance is evaluated on a once-per-year basis, as of December 31 of each year. As of December 31, 2015, all Directors either met the share ownership guidelines or fell within the exceptions to the guidelines.

Compensation Consultant. The Board of Directors engaged Pay Governance LLC during 2015 to assist in the evaluation of independent Director compensation. For executive compensation consulting services in 2015, the Board of Directors engaged Frederic W. Cook & Co. (“Cook & Co”). For a description of the executive compensation consulting services provided by Cook & Co to the Leadership Development and Compensation Committee of the Board of Directors, see page 40 of the Compensation Discussion and Analysis.

 

Newmont Mining Corporation 2016 Proxy Statement   •  21


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Committees of the Board of Directors

and Attendance

Attendance at Meetings. During 2015, the Board of Directors held nine meetings and Committees of the Board held a total of 23 meetings. Overall attendance by incumbent Director nominees at such meetings was approximately 99%. Each incumbent Director attended 75% or more of the aggregate of all meetings of the Board of Directors and Committees of the Board of Directors on which he or she served. It is the policy and practice of the Company that nominees for election at the Annual Meeting of Stockholders attend the meeting. All of the Board members at the time of the 2015 Annual Meeting of Stockholders held on April 22, 2015, attended the meeting.

Board Committees. The Board of Directors has, in addition to other committees, Audit, Leadership Development and Compensation, Corporate Governance and Nominating, and Safety and Sustainability Committees. All members of these four Committees are independent, as defined in the listing standards of the New York Stock Exchange and the Company’s Corporate Governance Guidelines. Each Committee functions under a written charter adopted by the Board, which are available on our website at http://www.newmont.com/about-us/governance-and-ethics/board-and-committee-governance/. The current members of these Committees and the number of meetings held in 2015 are shown in the following table:

 

Audit Committee Members(1)

  Functions of the Committee   Meetings
in 2015

Noreen Doyle, Chair

 

Bruce R. Brook

 

J. Kofi Bucknor

 

Julio M. Quintana(2)

 

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

  7
 

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

   
 

    provide oversight of the Company’s internal audit function

   
 

    authority to retain and terminate the Company’s independent auditors

   
 

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

   
 

    responsible for confirming the independence and objectivity of the independent auditors

   
 

    please refer to “Report of the Audit Committee” on page 82

   

 

Leadership Development and Compensation Committee Members(3)   Functions of the Committee   Meetings
in 2015

Veronica M. Hagen, Chair

 

Vincent A. Calarco

 

Joseph A. Carrabba

 

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

  7
 

    reviews plans for management development and senior executive succession

   
 

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

   
 

    please refer to “Report of the Leadership Development and Compensation Committee on Executive Compensation” and the “Compensation, Discussion and Analysis” beginning on pages 27 and 28, respectively

   

 

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Corporate Governance and Nominating Committee Members   Functions of the Committee   Meetings
in 2015

Vincent A. Calarco, Chair

 

Noreen Doyle

 

Veronica M. Hagen

 

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

  5
 

    proposes slates of officers to be elected

   
 

    conducts annual Board, Director peer and Committee evaluations

   
 

    conducts evaluations of the performance of the Chief Executive Officer

   
 

    responsible for recommending amount of Director compensation

   
 

    advises Board of corporate governance issues

   

 

Safety and Sustainability

Committee Members

  Functions of the Committee   Meetings
in 2015

Joseph A. Carrabba, Chair

 

Gregory H. Boyce(4)

 

Jane Nelson

 

    assists the Board in its oversight of safety issues

  4
 

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

   
 

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

   
 

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

   

 

(1) 

While all of the Audit Committee members are considered financially literate, the Board of Directors has determined that each of Noreen Doyle, Bruce R. Brook and J. Kofi Bucknor is an Audit Committee Financial Expert, as a result of his or her knowledge, abilities, education and experience.

(2) Julio M. Quintana was appointed to the Audit Committee following his election to the Board on October 27, 2015.

(3) The Compensation Committee and the Board recently determined to revise the name of the Committee title to Leadership Development and Compensation Committee to better reflect the charter and the leadership and talent reviews covered by the Committee.

(4) Gregory H. Boyce was appointed to the Safety and Sustainability Committee following his election to the Board on October 27, 2015.

 

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Corporate Governance

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

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

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

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

In July 2015, a Vice Chair role was created and Noreen Doyle was appointed to that role. In the interest of Board succession planning and leadership refreshment, in February 2016, the Board determined that Ms. Doyle will succeed Mr. Calarco in the role of independent Non-Executive Chair of the Board. Ms. Doyle’s appointment to the role of Chair will become effective on April 20, 2016, immediately following the Annual Meeting of Stockholders, subject to her re-election to the Board of Directors. Mr. Calarco will continue to serve as Chair until such time and is also standing for re-election as an independent director.

Board Oversight of Risk Management. The Board of Directors is engaged in company-wide risk management oversight. Directors are entitled to rely on management and the advice of the Company’s outside advisors and auditors, but must at all times have a reasonable basis for such reliance. The Board of Directors relies upon the Chief Executive Officer and Chief Financial Officer to supervise the risk management activities within the Company, each of whom may provide reports directly to the Board of Directors and certain Board Committees, as appropriate. The Company has a global Enterprise Risk Management (“ERM”) team, led by the Company’s Senior Vice President and Controller. The ERM team’s objectives include, but are not limited to, conducting the executive compensation risk assessment for purposes of reporting to the Leadership Development and Compensation Committee, as well as reporting on the ERM process and risk findings to the Audit Committee and the Safety and Sustainability Committee regularly, and to the full Board of Directors on at least an annual basis.

The Board of Directors also delegates certain risk oversight responsibilities to its Board Committees. For a description of the functions of the various Board Committees, see “Board Committees” above. For example, while the primary responsibility for financial and other reporting, internal controls, compliance with laws and regulations, and ethics rests with the management of the Company, the Audit Committee provides risk oversight with respect

 

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to the Company’s financial statements, the Company’s compliance with legal and regulatory requirements and corporate policies and controls, the independent auditor’s selection, retention, qualifications, objectivity and independence, and the performance of the Company’s internal audit function. Additionally, the Leadership Development and Compensation Committee provides risk oversight with respect to the Company’s compensation program. For a discussion of the Leadership Development and Compensation Committee and Enterprise Risk Management team’s assessments of compensation-related risks, see “Compensation Discussion and Analysis — Executive Compensation Risk Assessment.” The Safety and Sustainability Committee provides oversight and direction with regard to environmental, social responsibility, community relations, human rights, operational security and safety risks.

Board, Committee & Director Assessment. In alignment with the Company’s Corporate Governance Guidelines, the Corporate Governance and Nominating Committee leads the Board in its annual review of the performance and effectiveness of the Board and each of its Committees.

The Company’s Board of Directors Self-Assessment process focuses on numerous aspects of corporate governance and performance of the Board’s duties and responsibilities. Among other topics, the related questionnaire focuses on: (i) the Board’s overall responsibilities and effectiveness; (ii) the structure and composition of the Board (including organization, size, operation, diversity and tenure policies); (iii) the Board culture (both in executive session, as well as in connection with management and advisors); (iv) oversight of the Company’s key issues, opportunities and risks; (v) the adequacy and quality of information provided to the Board; and (vi) the overall Board policies, processes and procedures. Additionally, on an annual basis, the Chair of each Committee of the Board leads his or her respective Committee in a self-assessment and charter review and related discussions.

The annual Director Peer Evaluation process is utilized as a tool to solicit confidential feedback from fellow members of the Board regarding individual director performance. The Chair and the Corporate Governance and Nominating Committee use these results in conjunction with the assessment of the skills and characteristics of Board members, as well as in connection with making recommendations to the Board regarding the slate of directors for inclusion in the Company’s Proxy Statement for election at the Annual Meeting of Stockholders.

Communications with Stockholders or Interested Parties. Any stockholder or interested party who desires to contact the Company’s Chair, the non-management directors as a group or the other members of the Board of Directors may do so by writing to the Corporate Secretary (attention: Logan Hennessey), Newmont Mining Corporation, at 6363 South Fiddler’s Green Circle, Greenwood Village, Colorado 80111 USA. Any such communication should state the number of shares owned, if applicable. The Secretary will forward to the Chair any such communication addressed to him, the non-employee Directors as a group or to the Board of Directors generally, and will forward such communication to other Board members, as appropriate, provided that such communication addresses a legitimate business issue. Any communication relating to accounting, auditing or fraud will be forwarded immediately to the Chair of the Audit Committee.

Proxy Access. Effective February 12, 2016, the Board amended and restated the Company’s By-Laws to implement a proxy access by-law, which permits a stockholder, or a group of up to 20 stockholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three (3) years to nominate and include in the Company’s proxy materials directors constituting up to the greater of two (2) members or 20% of the Board, provided that the stockholder(s) and the nominee(s) satisfy the requirements specified in the By-Laws, which are available on our website at http://www.newmont.com/about-us/governance-and-ethics/board-and-committee-governance/.

Majority Voting Policy. The Company’s By-Laws require that in an uncontested election each Director will be elected by a vote of the majority of the votes cast, which means the number of votes cast “for” a Director’s election exceeds 50% of the number of votes cast with respect to that Director’s election. Notwithstanding the foregoing, in the event of a “contested election” of the Directors (as defined in the Company’s By-Laws), Directors shall be elected by the vote of a plurality of the votes cast at any meeting for the Election of Directors at which a quorum is present. If a nominee for Director does not receive the vote of at least a majority of votes cast at an Annual Meeting, it is the policy of the Board of Directors that the Director must tender his or her resignation to the Board. In such a case, the Corporate Governance and Nominating Committee will make a recommendation to the Board, whether to accept or reject the tendered resignation, taking into account all of the facts and circumstances. The Director who has tendered his or her resignation will not take part in the deliberations. For additional information, our Corporate Governance Guidelines describing this policy are available on our website at http://www.newmont.com/about-us/governance-and-ethics/board-and-committee-governance/.

 

Newmont Mining Corporation 2016 Proxy Statement   •  25


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Retirement Age. The Company’s retirement policy for non-employee Directors provides that, except at the request of the Board of Directors, no non-employee Director may stand for re-election to the Board after reaching age 75. As of December 31, 2015, the average age of members of our Board of Directors was approximately 62 and the average tenure of our Board of Directors was approximately 6.6 years.

Code of Conduct. Newmont’s Code of Conduct (the “Code”) publicly sets out the high standards of conduct expected of all of our Directors, employees and officers (including the Chief Executive Officer, the Chief Financial Officer, the Chief Accounting Officer and other persons performing financial reporting functions), as well as by our partners, vendors and contractors when they are working with us or on our behalf. The Code, which has been adopted by Newmont’s Board of Directors, sets out Newmont’s basic standards for ethical and legal behavior. The Code is available on our website at http://www.newmont.com/about-us/governance-and-ethics/code-of-conduct-and-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. Newmont will post on its website a description of any amendment to the Code and any waiver, including any implicit waiver, by Newmont of a provision of the Code to a Director or executive officer (including senior financial officers), the name of the person to whom the waiver was granted and the date of the waiver.

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

 

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Report of the Leadership Development and Compensation Committee on Executive Compensation

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

The LDCC has reviewed and discussed with management the Company’s Compensation Discussion and Analysis section of this Proxy Statement. Based on such review and discussions, the LDCC has recommended to the Board of Directors that the Compensation Discussion and Analysis section be included in this Proxy Statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Submitted by the following members of the LDCC of the Board of Directors:

Veronica M. Hagen, Chair

Vincent A. Calarco

Joseph A. Carrabba

 

Newmont Mining Corporation 2016 Proxy Statement   •  27


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Compensation Discussion

and Analysis

Our Compensation Discussion and Analysis (“CD&A”) describes Newmont’s executive compensation programs and compensation decisions in 2015 for our Named Executive Officers (“Officers”), who for 2015 includes:

 

Name   Title

Gary Goldberg

  President and Chief Executive Officer

Laurie Brlas

  Executive Vice President and Chief Financial Officer

Randy Engel

  Executive Vice President, Strategic Development

Stephen Gottesfeld

  Executive Vice President and General Counsel

Chris Robison

  Executive Vice President and Chief Operating Officer

 

          Page  
  

Table of Contents:

 

  Executive Summary: Provides the highlights of the Company’s business performance, executive compensation structure and the alignment of pay and performance, as well as foundational executive compensation practices

  

 

 

 

29

 
  

 

Overview of 2015 Company Performance and CEO Compensation

  

 

29

 
  

 

Company Overview and Summary of Results

  

 

30

 
  

 

Compensation Framework

  

 

31

 
  

 

Summary of 2015 CEO Compensation

  

 

34

 
  

 

LDCC matters: Say on Pay and Shareholder Engagement

  

 

35

 
  

 

Key 2015 LDCC Actions

  

 

36

 
  

 

Foundational Executive Compensation Practices

  

 

37

 
  

 

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

  

 

39

 
  

 

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

  

 

40

 
  

 

 2015 Compensation: Provides the details regarding 2015 pay and incentive programs

  

 

45

 
  

 

  “Realizable” Compensation for 2015: This table is provided as a supplement to assist stockholders with understanding the incentive compensation awarded or granted to executives as of December 31, 2015

  

 

61

 
  

 

 Looking Ahead to 2016: Provides a summary of executive compensation program changes planned for 2016

  

 

61

 
  

 

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

  

 

62

 
  

 

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

 

  

 

63

 

 
       

 

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Executive Summary

OVERVIEW OF 2015 COMPANY PERFORMANCE AND CEO COMPENSATION

In 2015, Newmont continued delivering our strategy by building on our leading safety and sustainability performance, implementing programs to drive profitability and generate robust free cash flow, and strengthening our balance sheet for sustainability, growth and ability to return cash to shareholders. This focus resulted in strong operational results in 2015 and a Total Shareholder Return (TSR) in the top quartile of the gold sector and above gold price performance. This is reflected in the pay of Newmont’s CEO; the following table illustrates the relationship between business performance, alignment with shareholder returns and CEO realizable incentive pay in 2015:

 

 

LOGO

 

1. Based on Newmont’s stock price as of December 31, 2015.

SUMMARY OF THREE-YEAR CEO PAY AND TOTAL SHAREHOLDER RETURN – 2013-2015

The following summary of Newmont’s total CEO compensation for the prior three years reflects the relationship of “realizable” compensation with the Company’s performance, as measured by three-year TSR. While Newmont’s three-year TSR has decreased 59%, total “realizable” compensation has declined as well and is approximately 73% of the “reported” compensation for the same period.

 

 

LOGO  

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

 

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

 

Total Realizable Pay: We believe this provides the most valid measure of incentive compensation at a point in time as it reflects the actual end-of-year compensation value as: Salary + actual bonus + intrinsic value1 of performance stock programs

 

(1) “Intrinsic value” is calculated using the closing stock price on December 31, 2015 ($17.99). Based on actual performance of outstanding performance awards if known, or estimated performance.

 

Note: Three-year compensation is based on pay for Mr. Goldberg for 2013-2015. Mr. Goldberg’s 2013 CEO salary was annualized for the analysis to more accurately reflect CEO pay since he assumed the role on March 1, 2013.

 

Newmont Mining Corporation 2016 Proxy Statement   •  29


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COMPANY OVERVIEW

Newmont is one of the world’s largest gold producers and is the only gold company included in the S&P 500 Index and Fortune 500. The Company has been included in the Dow Jones Sustainability Index-World for nine consecutive years and has adopted the World Gold Council’s Conflict-Free Gold Policy. The Company is also engaged in the exploration for and acquisition of gold and copper properties. The Company has significant operations and/or assets in the United States, Australia, Peru, Indonesia, Ghana and Suriname.

Our purpose is to create value and improve lives through sustainable and responsible mining.

2015 MARKET AND INDUSTRY CONTEXT

The past four years have witnessed extraordinary volatility in the mining industry and for gold-focused companies in particular. Gold price has declined significantly since the end of 2011 and remained under pressure in 2015 largely related to macroeconomic forces, leading to a decline in gold price of 12% during 2015. Investor preference continued to trend away from commodity-based gold mining stocks towards potentially higher yields as gold price impacted cash generation and asset values, furthering the decline in gold industry market capitalization (share price). As a reflection of this, the HUI Gold Index, an index of companies involved in the mining of gold and a barometer for the industry, declined by approximately 32% in 2015.

While Newmont’s stock price is highly correlated with gold price and not immune to industry pressures, Newmont largely maintained its value in 2015, declining 4.8% for the year. Newmont significantly outperformed gold and key gold company indices in 2015 and total shareholder return (“TSR”) ended 2015 in the top quartile of our gold competitors. This share price performance was supported by the operational and strategic improvements realized during the year as summarized in the following sections.

Newmont’s performance (NEM) relative to gold price and the HUI Gold Index (HUI) are displayed in the following chart:

 

LOGO

HOW NEWMONT HAS RESPONDED TO INDUSTRY CHALLENGES

We continued to build on the foundation established in 2013 taking the steps necessary to position the business for success in a constrained gold price environment. From 2013 through 2015, Newmont made significant changes in operations, corporate structure and asset portfolio. These changes led to our strong financial results and supported our relative stock price performance as shown above.

We have been focused on providing sustainable efficiency, productivity and cost improvements and expect to deliver significant cost and cash savings improvement initiatives. One of the programs we launched in 2013, and continued to progress in 2015 to achieve these improvements, is the Full Potential program (“Full Potential”). Full Potential is designed to leverage our industry experience and discipline to accelerate the delivery of business improvement opportunities across our operations and support areas, resulting in improved levels of operating cash flow.

 

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Increasing efficiencies and decreasing costs are a key component to improving our performance, yet we also realize sustaining performance over the long-term requires a focus on growth. Through our efficiency gains and additional work in optimizing our asset base, we were able to build a stronger balance sheet enabling us to repay debt, invest in higher margin projects (new operations), complete an accretive acquisition and continue to return cash to shareholders through our dividend.

 

    
  

2015 BUSINESS RESULTS — OPERATING PERFORMANCE HIGHLIGHTS

 

Based on the actions as noted above, in 2015 Newmont achieved the following:

 

Financial and Operating Results:

 

  Achieved adjusted net income1 of $507 million; GAAP net income attributable to shareholders from continuing operations of $193 million

 

 Increased consolidated Adjusted EBITDA1 of $2.7 billion, a 29% increase year-over-year

 

  Generated strong gains in free cash flow of $756 million, more than doubled 2014 free cash flow1, strengthening our balance sheet to support sustaining operations, future growth and returning cash to shareholders through our dividend of which we paid $52 million in 2015

 

  Significantly improved gold All In Sustaining Costs1 (“operating costs”) by 10% year-over-year

 

  Achieved gold production at the high end of guidance and above 2014 results, producing 5.04 million ounces on a attributable basis

 

Safety, Sustainability and Growth Results:

 

  Maintained status as a leader in safety; achieved lowest injury rates in Newmont’s history and among the best safety results in the International Council on Mining and Metals (ICMM)

 

  Industry leading performance in sustainability; named mining sector sustainability leader in the Dow Jones Sustainability Index (DJSI)

 

  Strengthened our asset portfolio with the accretive acquisition of Cripple Creek and Victor mine in Colorado and divesture of non-core assets

 

  Progressed key growth projects in the U.S. and Suriname providing increased future production capability

 

  Maintained an investment grade balance sheet and reduced net debt by 19% year-over-year, supporting our sustainable and profitable growth objectives

(1)     Non-GAAP measure. For a reconciliation to the nearest GAAP measure, see Annex A.

 
    
    

COMPENSATION FRAMEWORK — BALANCING EXECUTIVE COMPENSATION IN THE COMMODITIES INDUSTRY

Our stock price is heavily influenced by gold, copper and other commodity prices, which are in turn primarily driven by macroeconomic factors that are outside of the Company’s control. Since our stock price is significantly influenced by these external factors, Newmont’s compensation program is designed to focus management’s efforts and reward for results in areas where they have the most influence on driving business performance, as well as to motivate and retain leadership through various economic and commodity price cycles. We believe this approach aligns the incentive structure with business elements that support providing long-term performance gains for our stockholders.

 

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To promote long-term performance and sustainability as well as manage risk, the Company utilizes a comprehensive performance-based compensation structure with an appropriate balance of operational, financial and share price incentives based on:

 

 
Annual and Long-Term Performance   Operating, Financial and Market Performance
 
Absolute and Relative Performance  

Company and Individual Performance

 

While providing incentives for performance, the design of our program is intended to mitigate excessive risk taking by executives. Our LDCC believes that the mix and structure of compensation as described in this CD&A strike an appropriate balance to promote sustained performance without motivating or rewarding excessive risk. (See “Executive Compensation Risk Assessment” in the “Other Policies and Considerations” section of this CD&A for additional information on our risk analysis.)

2015 PAY FOR PERFORMANCE STRUCTURE

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

 

    
  

Newmont’s Executive Compensation Structure—

Portfolio of Leadership Measures

(percentages reflect mix of target compensation for the CEO)

 

LOGO

 

 
    

SUMMARY OF 2015 INCENTIVE MEASURES, COMPANY PERFORMANCE AND RESULTING COMPENSATION

The Company had strong 2015 operating performance which resulted in an above-target Corporate Performance Bonus. We believe that if we are able to execute on the key measures in the short-term, long-term results will follow. Noting the exceptional gold price and mining industry volatility over the past four years, performance for the long-term market measures was below target and resulted in payouts that are, as designed, below the target values for each long-term program.

 

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As our leadership is responsible for long-term performance aligned with stockholder interests, our compensation is substantially weighted to long-term results. With this, incentive compensation value for the year measured as of December 31, 2015 was below target at approximately 72.9% of target value as noted below:

 

LOGO

The above chart and table represent an average of Named Executive Officer (NEO) incentive pay (excludes salary).

 

  (1) 

Percent of total target incentive pay; based on NEO incentive mix with the exception of Mr. Robison, who was not eligible for a PSU award in 2013 and has therefore been excluded from the table.

 

  (2) 

Includes actual Personal Bonus paid to each NEO for 2015 based on the achievement of their personal objectives.

 

  (3) 

Granted shares included, vest over 3 years; realizable value determined using the closing stock price as of Dec. 31, 2015 was $17.99; grant date stock price was $25.555.

Details of each measure and corresponding performance are provided in the following table:

 

Newmont’s Incentive Plans   Incentive Plan
Measure(s)
  Corporate Metric /
Goal Supported
  Newmont Performance
vs. Target
  Resulting
Compensation
 

Realizable

Value

Annual Operating Measures

Corporate Performance Bonus (CPB)

  Safety   Core Value;
Safe Operations
  Above Target, but
downward  adjusted1
  Above Target   142.6%
of
Target
  CPB EBITDA   Profitability   Below Target   Below Target  
  Cash Sustaining Cost   Expense   Exceeded Cost
Reduction Target
  Above Target  
  Project Execution   Future Production/
Revenue
  Above Target   Above Target  
  Reserves   Assets; Future
Revenue
  Above Target   Above Target  
  Resources   Assets; Future
Revenue
  Above Target   Above Target  

Personal Objectives2

  Key Annual
Objectives
  Portfolio mgt.,
Operations,
Leadership
  Above Target   Above Target   135.9%
of
Target

Long-term Market (Stock) Based Measures

Performance-Leveraged Stock3,4

Units (Performance-based

Long-term Incentive)

  Stock Price   Stock Price
Performance
  Plan Performance
Below Target at
37.4%
  Below target   Below
Target
Value3
32%
  Total Stockholder
Return vs. Peers
  Stock Price
Performance plus
Dividends vs.
Peers
  Above Target –

91st percentile
adding 50% to
Plan Performance

  Above target  
 
 

Restricted Stock Units

(Time-based Long-term Incentive)

  Stock Price   Stock Price
Performance
  Below Target   Below Target
due to stock
price decline
  Below
Target
Value4
70.4%
(1) 

While Newmont exceeded targets and year-over-year safety results, we experienced two fatalities in 2015. Based on this, the Total Reportable Injury Frequency Rate (“TRIFR”) measure was capped.

 

(2) 

The Personal Bonus varies for each Officer based on their performance against stated goals; a summary of each Officer’s results and corresponding bonus award is provided in the section “2015 Compensation.”

 

(3) 

Represents value as a percent of target value for the 2013-2015 performance period; includes plan performance of 87.4% of target shares (37.4% for stock price performance plus 50.0% for 91st percentile relative TSR performance) and decrease in stock price over the performance period.

 

(4) 

Long-term incentive program results are based on program performance and change in stock price from the date of the award; resulting share payments are based on Newmont’s stock price value as of 12/31/15 of $17.99.

 

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Description of Above-Target Achievement for the Corporate Performance Bonus and Corresponding Bonus Plan Funding. The following table describes the above-target performance achieved in 2015 and the corresponding additional percentage of Corporate Performance Bonus plan funding above target. This is an additional point of review to ensure performance and pay are aligned, and that a return-on-investment (“ROI”) perspective is incorporated in our pay-for-performance review:

 

Performance Metric   2015 CPB
Performance
    Additional
Bonus % Above
Target
    Additional
Funding(1)
       

Return on Investment /

Results of Above Target Performance

Safety

    124.0     4.8     $2.2 M        Record low injury rate supported by actions taken on preventative/leading safety controls and procedures

CPB EBITDA

    95.7     -0.9     ($0.4 M     Result and corresponding bonus payout slightly below target; However, 23% above 2014(2) in declining gold price environment

Cash Sustaining Cost

    184.3     33.7     $15.5 M        Over $500 Million decrease in cash sustaining cost

Project Execution

    104.0     0.4     $0.2 M        Approx. $159M under budget; projects coming on-line at or ahead of original plans

Reserves

    164.0     3.2     $1.5 M        Maintained asset base in a declining price environment to support long-term sustainability

Resources

    128.9     1.4     $0.6 M       
           

Total Result:

    142.6%        42.6%        $19.6 M        Over $500M in benefit; $20M in bonus funding
(1) 

Represents additional Company bonus funding above target for all employees; reflects corporate results applied to global population.

 

(2) 

Comparing 2015 CPB EBITDA of $2,637M to 2014 SSU Adjusted EBITDA result of $2,147M.

SUMMARY OF 2015 CEO COMPENSATION

Based on Mr. Goldberg’s performance and in reviewing Mr. Goldberg’s market pay position (which was between the 25th and 50th percentile), the LDCC awarded Mr. Goldberg a 4% increase in target compensation for 2015 (Mr. Goldberg did not receive an increase in 2014). This resulted in a target compensation structure positioned at approximately the 50th percentile of the peer group. This overall target pay increase of 4% included a 7% increase in base salary and 2% increase in long-term incentive value. This approach was used to position Mr. Goldberg’s leveraged pay mix closer to peer group norms.

2015 Target Stock Compensation Value. With respect to the increase in target long-term incentive or stock value, the LDCC approved a total year-over-year increase of 2% or $125,000. While the Summary Compensation Table (provided after this CD&A) indicates an increase in year-over-year stock value of $3.87 million ($9.45 million for 2015, $5.59 million for 2014), this increase is largely due to the theoretical projected accounting value (or “Fair Value”) for the 2015 Performance-Leveraged Stock Unit (PSU) grant (payable in 2018) which resulted from the “Monte Carlo” simulation model (consistent with U.S. GAAP accounting standards for valuing performance stock awards). Due to the increase and volatility in Newmont’s stock price during the first quarter of 2015, the model projected a 2018 payout or performance result of 162% of target value. This theoretical value is the required amount to disclose in the Summary Compensation Table.

The following table is intended to clarify the decision by the LDCC in 2015, illustrating the value the LDCC utilized for the award versus the projected theoretical stock value provided in the Summary Compensation Table.

 

2015-2017 Performance Stock Unit
Value Comparison
         Price Used to Value the PSU Grant         
 

Target Shares
Granted
(vesting 2018

subject to
performance)

    Price Used to
Determine Target
Shares Granted
(vesting 2018)
    Newmont’s
Stock
Price on
December 31,
2015
   

Fair Value

per share

Based on the
“Monte Carlo”
Projected Value 1

   

Comparison of

the Valuation
Approaches for

the PSU Award

 

Target Value as Awarded by the LDCC

    182,058        $20.14                        $3,666,648   

“Realizable” Value as of December 31, 2015

    182,058                $17.99                $3,275,223   

2015 Fair Value (projected) in Accordance with Disclosure Requirements

    182,058                        $41.85        $7,619,127   
(1) 

In comparison, the 2014 Fair Value per share result from the Monte Carlo simulation was $27.20 vs. $41.85 for 2015, an increase of 54% in theoretical projected value.

 

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If the PSUs awarded to Mr. Goldberg achieve the value disclosed in the Summary Compensation Table, the stock price performance required to meet this level of payout would be a minimum shareholder return of 12% combined with top quartile performance against the peer group, or an absolute shareholder return of 62%. If the “Monte Carlo” value is used to assess Mr. Goldberg’s pay, then the stock price performance required to result in this level of compensation should be assumed. (Details for the PSU program are provided later in this CD&A.)

Realizable Compensation. The following chart illustrates: 1) Target Compensation (pre-performance adjusted pay); 2) salary, bonus and long-term incentive pay as provided in the Summary Compensation Table (which includes actual bonus value and value of long-term incentives upon grant – pre-performance adjusted); and, 3) Realizable Compensation (which includes the actual bonus value and valuation of long-term incentives based on actual performance for the 2013-2015 PSU and the stock price as of December 31, 2015).

 

Pay Summary Type

         Annual Incentives     Long-Term Incentives         
  Annual
Salary
    Corporate
Performance
Bonus
    Personal
Bonus
    Restricted
Stock
Units
    Performance
leveraged
Stock Units
    Total
Compensation
 

2014 Target Compensation

    $1,075,000        $806,250        $806,250        $1,791,667        $3,583,333        $8,062,500   

2015 Target Compensation

    $1,150,000        $1,207,500        $517,500        $1,833,333        $3,666,667        $8,375,000   

2015 Summary Compensation Table1

    $1,135,783        $1,700,608        $766,653        $1,833,316        $7,619,127        $13,055,487   

2015 “Realizable” Compensation2

    $1,135,783        $1,700,608        $766,653        $1,290,603        $1,145,028        $6,038,675   

This table is not intended to replace the Summary Compensation Table, but as a supplement to assist stockholders in understanding target compensation and performance adjusted compensation. The amounts reported in the “Realizable” Compensation row may differ substantially from the amounts reported in the Total column required under SEC rules and are not a substitute for total compensation as reported in the Summary Compensation Table.

 

(1) 

Excludes Change in Pension Value and All Other Compensation as listed in the Summary Compensation Table. Value of long-term incentives is based on the grant date fair value of the 2015 awards which vest/are payable over the period of 2015-2017, subject to performance prescribed for each form of long-term incentive.

 

(2) 

Value of long-term incentives is based on actual performance of the awards based on Newmont’s closing stock price on December 31, 2015 of $17.99. Includes the 2015 RSU and the 2013-2015 PSU, as this was the grant payable for 2015.

Details regarding Mr. Goldberg’s compensation are provided in the section “2015 Compensation” and in the Summary Compensation Table located on page 66.

2015 Say on Pay Vote and shareholder engagement

Newmont has historically received strong support from stockholders in favor of the “Advisory Vote on the Compensation of the Named Executive Officers” (“Say on Pay”). For the past four years, our “vote in favor” results have been 93% or greater (excluding abstentions). Additional information regarding the “Say on Pay” vote is on pages 63 and 83-85.

While our historical results indicate strong support for Newmont’s Officer compensation, the LDCC continues to review our executive compensation structure to increase its effectiveness and further align with stockholder interests in light of changing industry dynamics.

Shareholder Engagement. To further ensure alignment with stockholder interests, we engage our largest investors and solicit feedback on our executive compensation programs. We have reached out to many of our largest shareholders with the intent of communicating our programs, governance and performance, obtaining feedback to be considered in future designs, and fostering open dialogue and regular communication to support alignment with shareholder interests. We will continue this practice as a critical component of our annual governance review process.

Overall, results from the shareholder feedback indicate support for Newmont’s structure, performance alignment and disclosure. While no significant concerns were raised, Newmont will consider the feedback from shareholders to further improve our plans and disclosure of executive compensation to address their interests.

 

Newmont Mining Corporation 2016 Proxy Statement   •  35


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SUMMARY OF KEY 2015 LEADERSHIP DEVELOPMENT AND COMPENSATION COMMITTEE ACTIONS

The following highlights some of the key actions by the LDCC in 2015 as a supplement to ongoing practices noted in “Foundational Executive Compensation Practices” below:

 

2015 LDCC Action    Description
Revised the Committee title from Compensation Committee to Leadership Development and Compensation Committee (“LDCC”).    The Committee regularly reviews leadership and related talent management matters, as it provides a more holistic perspective and better informs the Committee’s decision making and governance responsibilities. As such, the title was revised to reflect the additional focus of their work.
The LDCC held joint sessions with the other Committees on relevant talent and compensation program topics.   

In select circumstances, the LDCC held joint sessions with the other Committees where 1) the input and expertise of the other Committees would add value to the LDCC’s decision making process, 2) efficiencies could be gained through collaboration, or 3) the other Committees would benefit from visibility to talent-related discussions. Examples include:

 

 Joint session with the Corporate Governance and Nominating Committee to review CEO performance and pay; and,

 

 For 2016, members of the Safety and Sustainability and LDCC Committees met with Management to review and evaluate proposed sustainability-related metrics for the 2016 Corporate Performance Bonus plan.

Held annual executive compensation strategy meeting to plan and identify continuous improvement opportunities.   

The LDCC Chair, Management and the Committee’s independent consultant conducted planning around key operational, governance and strategic items; outcomes for 2015 included:

 

  Continue proactive focus on total rewards design to ensure continued effectiveness of incentive design and governance trends;

 

  Perform proactive and holistic review of compensation plans to ensure they support future business objectives and drive shareholder value; and,

 

  Increase focus on performance, succession and diversity, as well as further integrate talent and rewards programs, in alignment with the Company’s human capital strategy.

Continuously improved the performance review and decision making process for the CEO and Executive Leadership Team.   

 The review cycle has been updated to include context setting on Company, CEO and Executive performance in the meeting prior to when decision making occurs; and,

 

 Details regarding the performance review and decision making process can be found in “Developing our Executive Compensation Program.”

 

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FOUNDATIONAL EXECUTIVE COMPENSATION PRACTICES 

The following policies demonstrate our strong governance model:

 

Foundational Executive Compensation Practices

ü  Competitive Stock Ownership Requirements

  Stock ownership requirements for Officers to own significant holdings of Newmont stock (five times salary for the CEO)

ü  Well-Managed “Burn Rate”

  Annual employee stock issuance “burn rate” under 1%

ü  Appropriate Vesting Terms

  Equity grant practices for standard annual awards with at least three year combined performance and vesting periods for Officer awards

ü  Compensation Clawback Provision

  A clawback policy to recover excess compensation from incentive payouts and stock gains if the financial results were restated, whether intentionally or by administrative error

ü  No Hedging, Pledging or Margin Policy

  Stock trading standard prohibiting executives from buying Newmont stock on margin, or hedging Newmont stock holdings

ü  Double-Trigger Change of Control

  Change-of-control plans that provide payments only upon termination following a change-of-control (“double-trigger”), including stock acceleration only upon a double-trigger

ü  Discontinued Excise Tax Gross-ups for Employees Hired/Promoted into Change of Control Eligible roles in or after 2012

  As of January 1, 2012, the new Change of Control plan removes the excise tax gross up for employees hired into, or current employees promoted into, eligible positions. The prior plan containing gross-ups remains in place for employees who were eligible on, or prior to, December 31, 2011, because the terms of the prior plan prohibit any reduction in benefits to plan participants; two of the five Officers listed in this CD&A are covered under the 2012 plan which does not provide the excise tax gross-up; additional details are provided in the section “Post Employment Compensation”

ü  No Employment Agreements

  No employment agreements for Officers

ü  No Repricing

  Prohibition against the repricing of stock options without stockholder approval

ü  Committee Governance Model

  LDCC operating model and annual work plan to support the governance activities of the LDCC

ü  Committee Charter Review

  The LDCC Charter is reviewed on a regular basis to ensure it is current with best practices and maintains high governance standards; all Committee Charter topics were completed for 2015

ü  Risk Management Review of Executive Compensation Program

  The Company’s Enterprise Risk Management (“ERM”) team conducts a periodic review of the Company’s Executive Compensation Program for excessive risk. Review completed for 2015 by Risk Management did not find that the program incents excessive risk

ü  Independent Committee Advisor

  Use of an independent compensation consultant, Cook & Co., to advise the LDCC regarding executive compensation (the consultant does not perform any other services for the Company)

ü  Audit of Incentive Plan Processes, Results and Payments

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

ü  Regular Executive Sessions

  Executive sessions of the LDCC without management present

ü  Annual executive compensation strategy meeting

  Hold annual LDCC strategy meeting outside of the standard Board meeting schedule to discuss results of the annual shareholder meeting and Say on Pay vote, business context, and potential areas for continued improvement

 

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Foundational Executive Compensation Practices

ü  Succession Planning

  Executive succession planning review by the LDCC and Board of Directors

ü  Talent, Global Inclusion and Diversity Reviews

  Conduct regular reviews of the Company’s talent programs, as well as reviews of global inclusion and diversity, providing oversight of programs which support core values and Newmont’s focus on sustainability. The succession and talent reviews also provide context for executive pay decisions. As appropriate, talent reviews may periodically be performed jointly with other Committees where it is valuable for cross-Committee insight into Executive talent.

 

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Philosophy and Principles

Compensation Philosophy. Newmont’s executive compensation programs are designed to effectively link the actions of our executives to business outcomes that drive value creation for stockholders. In designing these programs, we are guided by the following principles:

 

 

Maintaining a clear link between the achievement of business goals and compensation payout. We believe that:

 

  (1) Officers should be evaluated and paid based on performance that leads to long-term success and relative stock price improvement; and

 

  (2) Officer compensation programs can be an effective means of driving the behavior to accomplish our objectives, but only if each executive clearly understands how achievement of predetermined business goals influences his or her compensation.

 

 

Selecting the right performance measures. Equally important is the selection of those performance measures which need to be measurable and linked to both increased stockholder value and Newmont’s short- and long-term success.

 

 

Sharing information and encouraging feedback. Focused and clear program design supports transparency for our stockholders. It is important for stockholders to understand the basis for our Officers’ compensation, as this provides stockholders insight into our goals, direction and the manner in which resources are being used to increase stockholder value. We invite stockholder input and actively engage stockholders in matters related to Newmont’s executive compensation programs.

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

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

 

LOGO

 

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Components of Total Compensation

The components of target total direct compensation for our Officers are described in the Executive Summary and stated below. We emphasize performance-based “at-risk” compensation, based on operational, financial and share price performance.

LOGO

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

 

 

Assess the competitiveness of the Company’s executive compensation levels against peer groups;

 

 

Consider the desired target benchmark for total executive compensation levels; and

 

 

Make necessary refinements to the compensation components to further align executive compensation with performance goals and ensure good governance practices.

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

Use of Independent Compensation Advisors. The LDCC, which has the authority to retain special counsel and other experts, including compensation consultants, has engaged Frederic W. Cook & Co. (“Cook & Co.”) to assist the LDCC with: (1) advice regarding trends in executive compensation, (2) independent review of management proposals, and (3) an independent review and recommendation on Chief Executive Officer compensation, as well as other items that come before the LDCC. Cook & Co. has reviewed the compensation philosophy, objectives, strategy, benchmark analyses and recommendations regarding Officer compensation.

At least annually, the LDCC reviews the support provided by the independent compensation advisors to ensure the level of support, consultation and fees are appropriate and aligned with the LDCC’s needs. The LDCC conducted a thorough review in 2013, including interviews of other independent compensation advisors, and upon completing the interviews, the Committee retained the services of Cook & Co. based on their approach, expertise and fee structure.

Cook & Co. is engaged solely by the LDCC and does not provide any services or advice directly to management unless authorized to do so by the Committee. In connection with its engagement of Cook & Co., the LDCC reviewed Cook & Co.’s independence including, but not limited to, the amount of fees received by Cook & Co. from Newmont as a percentage of Cook & Co.’s total revenue, Cook & Co.’s policies and procedures designed to prevent conflicts of interest, and the existence of any business or personal relationship (including stock ownership) that could impact Cook & Co.’s independence. After reviewing these and other factors, the LDCC determined that Cook & Co. is independent and that its engagement did not present any conflicts of interest. Cook & Co. also determined that it was independent from management and confirmed this in a written statement delivered to the Chair of the LDCC.

 

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Compensation Decision Process. When making compensation decisions for Officers, the LDCC considers factors beyond market data and the advice of consultants. At the beginning of the compensation cycle, the Chief Executive Officer and Human Resources Management provide a fulsome review of business performance, executive performance and proposed compensation (for executives other than the Chief Executive Officer) to the LDCC for consideration. The LDCC then considers the individual’s performance, tenure and experience, the overall performance of the Company, any retention concerns, the individual’s historical compensation and the compensation of the individual’s peers within the Company and market. While the LDCC does have certain guidelines, goals, and tools that it uses to make its decisions, as explained below, the compensation process is not an exact science but incorporates the reasoned business judgment of the LDCC. Final decisions are made at a subsequent meeting after full consideration of all factors highlighted below.

Compensation Components and Alignment to Compensation Philosophy

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

Determining the Proper Mix of Different Pay Elements. In determining how we allocate an Officer’s total compensation package among various components, we emphasize compensation elements that reward performance on measures that align closely with business success, underscoring our pay-for-performance philosophy. A significant portion of our executive compensation is performance-based or “at-risk.” Our Chief Executive Officer and other Officers have a higher percentage of at-risk compensation relative to other employees, because our Officers have the greatest influence on Company performance. Stock-based long-term incentives represent the largest component of pay, in order to encourage sustained long-term performance and ensure alignment with stockholders’ interests. In the graphs below, we show the emphasis on at-risk or stockholder-aligned compensation through performance-based short-term and long-term incentives compared to base salary, with the Chief Executive Officer reflecting the most significant “at-risk” portion of compensation.

 

LOGO

Components of Compensation and Alignment to Goals. The Company recognizes that its stock price is heavily influenced by the price of gold, copper and other commodities, which are outside of the control of the Company. Thus, as a way to balance the commodity fluctuation, the Company grants a mix of incentives including performance-leveraged stock units (based on share return measures) and time-based restricted stock units (based on stock price performance) to align the interests of management with the long-term interests of stockholders. This balanced approach means that management needs to achieve specific performance results to earn the incentives even in periods of positive gold/copper price movement, and that the equity package continues to motivate performance in down-cycles as the stock and restricted stock units continue to retain value and have motivational impact even when gold/copper prices are falling. At the same time, the use of stock price-based incentives ensures that the highest rewards will only occur with an increasing stock price and performance that exceeds the median of the Company’s gold mining peers.

 

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The components of the compensation structure are:

 

Time Horizon   Component   Purpose   Key Features
Current   Base Salary   Compensation for the level of responsibility, experience, skills, and sustained individual performance.  

Fixed compensation is not subject to financial performance risk;

 

Benchmarked to the median range of the peer group to ensure the ability to compete for highly talented leadership;

 

Individual compensation can vary above or below the market reference point based on such factors as performance, skills, experience and scope of the role relative to internal and external peers.

Short-Term

  Corporate Performance Bonus   Supports annual operating and financial performance, based on defined performance metrics.  

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

    CPB EBITDA (earnings);

   Cash Sustaining Cost;

   Safety;

   Project execution and cost; and

    Reserve and resource additions

  Personal Bonus   Rewards for the achievement of individual objectives designed to support current initiatives, long-term sustainability and Company performance.   Annual cash award based on stated individual measures and objectives, which are calibrated by Management and approved in advance by the LDCC.

Long-Term

  Performance-Leveraged Stock Units   Incentive to outperform peer group stock price performance and to make Newmont the preferred gold stock; aligns pay with stockholder interests and long-term stock price performance.   Awards are based on absolute stock price growth and relative stock price performance against the PSU peer group (described later in this CD&A), over a three-year period, and are settled in shares of Company stock at the end of the three years.
  Restricted Stock Units   Long-term shareholder alignment and employee retention.  

Minority portion of LTI (one-third of LTI value) for senior executives;

Awards vest over three-year period;

Provides a strong retention and stock-price linkage for eligible employees.

Determination of Target Total Compensation. We consider a variety of factors when determining target Officer compensation to ensure we have a comprehensive understanding of alignment to goals, reasonableness of pay, internal equity, pay-for-performance, and ability to attract and retain executive talent. The primary items considered when making executive compensation determinations are discussed below and include:

 

Factors   Purpose/Key Considerations

Market Information

  To ensure reasonableness of pay relative to industry peers.

Performance and Leadership

  To understand important performance and leadership context, such as: Experience, skills and scope of responsibilities; Individual performance; Company performance; and Succession Planning.

Pay Mix

  To ensure pay “at-risk” is consistent with philosophy and comparator group practices; a significant majority of pay should be “at-risk.”
Internal Equity   To understand whether internal pay differences are reasonable between executives and consistent with market practice.
Total Compensation   To understand the purpose and amount of each pay component as well as the sum of all compensation elements in order to gauge the reasonableness and the total potential expense.
Chief Executive Officer and other Officer compensation versus Total Shareholder Return (“Pay-for-Performance Charts”)   To ensure that pay is aligned with performance and set appropriately given industry performance and pay rates.

Performance Sensitivity Analysis

  To understand potential payments assuming various Company performance outcomes; understand how potential performance extremes are reflected in pay; a component of our compensation risk assessment.

 

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Competitive Considerations (Market Information)

Peer Group Determination. We strive to compensate our employees, including our Officers, competitively relative to industry peers. As part of the LDCC’s charter and to ensure the reasonableness and competitiveness of Newmont’s position in the industry, the LDCC regularly evaluates Newmont’s peer group with the aid of its independent consultant, Cook & Co., and with input from management. As noted above, peer groups are used in the compensation benchmarking process as one input in helping to determine appropriate pay levels. When reviewing the appropriateness of a peer group, the LDCC’s analysis includes a review of information regarding each potential peer company’s industry, complexity of their business and organizational size, including revenue, net income, total assets, market capitalization and number of employees. This approach ensures a reasonable basis of comparison.

Peer Group. For 2015, the LDCC completed a comprehensive review of the peer group to ensure the reference companies continue to represent a valid point of comparison based on the industry and Newmont’s business model. As criteria to improve the peer group, the LDCC sought to:

 

   

emphasize mining and related extractive industries (i.e. oil and gas),

 

   

include a greater focus on U.S.-based companies to minimize volatility due to foreign exchange and differences in local laws and practices,

 

   

discontinue representation of engineering, procurement and construction (“EPC”) companies based on changes in Newmont’s business model for new projects, and,

 

   

include a review of “Say on Pay” results of peer companies to ensure the peer group represents companies with pay practices that have majority support by stockholders.

Based on this review, the LDCC removed four companies and added six new companies to the peer group. The peer group for 2015 included:

 

Alcoa Inc.

  Freeport-McMoran Copper and Gold Inc.

Anglo American

  Goldcorp Inc.

Apache Corporation

  Kinross Gold Corporation

Barrick Gold Corporation

  The Mosaic Company (added)

Canadian Natural Resources Limited

  Noble Energy, Inc. (added)

CONSOL Energy Inc. (added)

  Peabody Energy Corporation

Devon Energy Corporation (added)

  Rio Tinto plc.

EOG Resources, Inc.

  Teck Resources Limited

First Quantum Minerals Ltd. (added)

  United States Steel Corporation (added)

Companies that were removed from the peer group include: AngloGold Ashanti Limited, Fluor Corporation, Gold Fields Limited and Talisman Energy Inc.

Newmont’s ranking within the peer group is consistent with benchmarking standards and generally ranks at or near the median on key scope metrics, as indicated below. Relative positioning will vary over time based on commodity and market price changes, as well as annual business operations. Based on industry, company scope and the longer term view on comparative metrics, the LDCC has validated this list to be appropriate for benchmarking purposes.

 

LOGO

(1) 

Data based on the market statistics as of December 31, 2014, with the exception of market cap which is current as of December 31, 2015.

 

Newmont Mining Corporation 2016 Proxy Statement   •  43


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Newmont’s peer group may differ from the peer groups used by proxy advisory services; the LDCC believes Newmont’s peer group appropriately represents the relevant industry comparators and companies where Newmont competes for talent.

The Committee will continue to assess and monitor Newmont’s peer group and adjust as necessary to ensure continued relevancy.

Positioning of Pay Relative to Peers for 2015. For 2015 compensation, the LDCC determined that the appropriate benchmarking reference is a median range, and that actual compensation may be above or below the median range depending on the Company’s performance and other factors described in this section.

Material Differences Among Officers. The targets for salary and incentive compensation vary among Newmont’s Officers in an effort to reflect differences in job responsibilities and industry pay levels. This aims to avoid setting amounts that may be above or below market pay levels as would be the case if a “one size fits all” approach were used. Specifically for the Chief Executive Officer, the target percentage for each incentive compensation component is greater than the other Officers due to his position as the top executive of the Company, commensurate with the level of accountability and degree of impact that this executive can have on overall business results and strategy.

Other Factors Used to Determine Compensation

Effect of Individual Performance. The LDCC takes into consideration a variety of elements, such as the Officer’s skill set, individual achievements and role with Newmont during the relevant fiscal year. Additionally, an assessment of each Officer’s progress against his or her Personal Objectives (discussed later in this CD&A) is completed by the Chief Executive Officer and discussed with the LDCC. The LDCC ultimately makes the compensation decisions for all of the Officers, including the Chief Executive Officer, based on the LDCC members’ own collective experience and business judgment.

Effect of Compensation Previously Received on Future Pay Decisions. We consider actual compensation received in determining whether our compensation programs are meeting their pay-for-performance and retention objectives. Adjustments to future awards may be considered based on results. However, the LDCC generally does not adjust compensation program targets based on compensation received in the past to avoid creating a disincentive for exceptional performance or providing compensation not aligned with our plans.

 

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2015 Compensation

While the amount of compensation may differ among our Officers, the compensation policies are generally the same for each of our Officers, including our Chief Executive Officer. In this section, we discuss the LDCC’s considerations with respect to each element of compensation paid in 2015.

2015 Compensation Program Changes. Each year the LDCC holds a planning meeting outside of the regular Board of Directors meeting schedule to review executive compensation and talent management programs, as well as feedback received during the shareholder engagement cycle (including input from shareholders, proxy advisory services, and the results of the Company’s annual “Say on Pay” vote). The LDCC discusses current and future business objectives to determine whether adjustments should be considered to improve the alignment of pay and performance. Based on this review and subsequent discussions on proposed plan design revisions, the following plan changes were implemented for 2015.

 

  Program    What Changed    Why

  Corporate Performance Bonus

   The Corporate Performance Bonus weighting increased to 70% from 50% for the executive leadership team, with a corresponding decrease in the weighting of the Personal Bonus to 30% from 50%.    We believe that senior level employees have greater influence and accountability for overall company results, and while personal objectives are an important element of the annual program, a greater percentage of annual results should be based on company objectives.
     The “Production” metric was replaced with earnings, “CPB EBITDA.”    The addition of an earnings metric reinforces Newmont’s focus on delivering value, particularly during a challenging gold price environment. We believe this change improves the alignment of pay for performance as a broader measure of earnings is ultimately better aligned with financial results and the stockholder experience.
     For CPB EBITDA and Cash Sustaining Cost metrics, incorporated the impact of price changes for gold, copper, silver and oil, as well as and foreign exchange rates at 50% of the price change during the year (“50/50 flex”).    The Corporate Performance Bonus program previously excluded the impact of changes in gold, copper, fuel and foreign exchange rates to focus on “controlling what we control.” Including a “50/50 flex” increases the alignment with publicly disclosed results and stock price movement and better aligns with overall shareholder experience while maintaining a balance with “controlling what we control.”
     Added an additional Safety metric, focused on identifying and implementing critical controls to continue our focus on improving safety.    This is a key leading indicator that supports Newmont’s objective of achieving zero harm.
     The weighting of the Project Execution metric increased by 5% with a commensurate 5% decrease in the weighting of the Reserves and Resources metrics.    This change was made to drive further alignment with the 2015 Business Plan and Strategy.

  Long-Term Incentives

   Replaced Strategic Stock Units (“SSUs”) (an EBITDA-based incentive program) with Restricted Stock Units (“RSUs”).    We believe an EBITDA-based metric is better aligned with the annual incentive program, and to avoid duplicate measures in the incentive structure, the SSU program was discontinued for 2015. The addition of RSUs comprising one-third of the long-term incentive value aligns with driving long-term value, as RSUs will vest over three years and ultimate value will depend on Newmont’s stock price performance.

 

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2015 Company and Individual Results.

This section provides a summary of the Company and individual results, and corresponding compensation for the Named Executive Officers.

Base Salary. The LDCC considered the compensation levels of comparable positions in the market data to help determine a reasonable base salary range, but also considered individual performance, tenure and experience, the overall Company performance, any retention concerns, individual historical compensation and input from other Board members. While the LDCC has not adopted a policy with regard to the internal relationship of compensation among the Officers or other employees, this relationship is reviewed and discussed when the LDCC determines total compensation for our Officers.

Mr. Goldberg: Based on Newmont’s strong operating performance in 2015, Mr. Goldberg received a 4% increase in total target compensation for 2015, resulting in a target compensation structure positioned at approximately the 50th percentile of the peer group. This overall target pay increase of 4% included a 7% increase in base salary and 2% increase in long-term incentive value, positioning Mr. Goldberg’s leveraged pay mix closer to peer group norms. Mr. Goldberg’s performance and corresponding compensation are covered further in the “Personal Bonus” and “Long-Term Equity Incentive Compensation” sections.

Mr. Robison: Upon joining Newmont in 2013, Mr. Robison’s compensation terms were structured to support his leadership of Newmont’s operations for a period of time necessary to help drive improvements and develop a successor to effectively lead the organization after his retirement. As a result, greater emphasis has been placed on Mr. Robison’s base salary and short-term incentive compensation to date versus long-term incentives. Mr. Robison has delivered strong operational results in his tenure with Newmont and has effectively progressed the bench strength of Operations leadership globally. As such, the LDCC approved a 14.3% increase in base salary for Mr. Robison in 2015, reflective of his strong business results and in alignment with his compensation structure.

Mr. Engel: Mr. Engel received a 3.5% base salary increase for his performance in 2015 and to ensure continued competitiveness relative to market.

Ms. Brlas and Mr. Gottesfeld did not receive base salary increases in 2015 based on their overall position relative to market information.

Base salaries for 2015 were set as follows based on the criteria noted above.

 

Name   2014 Base
Salary1
    2015 Base
Salary
    Change  

Gary Goldberg

    $1,075,000        $1,150,000        7.0

Laurie Brlas

    $700,000        $700,000        —     

Randy Engel

    $595,000        $615,825        3.5

Stephen Gottesfeld

    $500,000        $500,000        —     

Chris Robison

    $700,000        $800,000        14.3

 

(1) 

None of the Named Executive Officers received a base salary increase in 2014, based on such factors as having recently been promoted or hired, and the respective relative position to the market benchmarking range.

Short-Term Non-Equity Incentive Compensation.

 

Short-Term Incentive Compensation Highlights:

 

   

Comprised of two components:

 

   

Corporate Performance Bonus (70% of the total short-term incentive opportunity); and

 

   

Personal Bonus (30% of the total short-term incentive opportunity).

 

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2015 SHORT-TERM INCENTIVE TARGETS

 

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

Gary Goldberg

  105%     45%   150%

Laurie Brlas

    70%     30%   100%

Randy Engel

    63%     27%     90%

Stephen Gottesfeld

  59.5%   25.5%     85%

Chris Robison

  87.5%   37.5%   125%

Corporate Performance Bonus (70% of short-term incentives).

 

Corporate Performance Bonus Summary:

 

   

Payment based on overall corporate performance results which include annual financial and operational targets based on key business objectives;

 

   

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

 

   

Five of six measures performed at or above target levels in 2015; and

 

   

Weighted performance resulted in an award of 142.6% of target payment for 2015.

The Corporate Performance Bonus provides an annual reward based on six measures1 designed to balance short-term and long-term factors, business performance and successful investment in and development of Company assets. The LDCC reviews and approves the performance metrics and target levels of performance annually to ensure metrics are well aligned to delivering shareholder value. The amounts of 2015 Corporate Performance Bonuses earned by the Officers are shown in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table. The measures that the LDCC established for 2015 are listed below.

2015 Corporate Performance Bonus. The Company’s focus on safety, profitability and growth set the overall theme of the Corporate Performance Bonus plan. See “2015 Compensation Program Changes” for more detail on the changes implemented for the 2015 program.

 

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The components of the 2015 Corporate Performance Bonus are as follows:

 

Corporate Performance
Bonus Measure
   What It Is    Why It Is Used

Safety

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

CPB EBITDA

  

Measures pre-tax cash income or earnings from Newmont’s operations. It also serves as a proxy for cash flow from operations as it excludes payments for income taxes and financing.

 

See Annex A for the detailed definition and adjustments.

   CPB EBITDA is an important profitability metric reflective of our financial operating results. SSU Adjusted EBITDA has traditionally been a measure in our long-term incentive plans and has been moved to the Corporate Performance Bonus as it better aligns with annual financial operating results.

Cash Sustaining Cost

   Measures the total production and early stage cost per gold equivalent ounce, including G&A, sustaining capital and other key operating expense items, excluding impact of non-cash write-downs.   

Cost is a key financial metric within employees’ control and helps to ensure efficiency and accountability to support a value focus for production.

 

Cost continues to be an important operating metric due to changes in gold price and the mining industry.

Project Execution

   Measures the progress of new key capital projects which are expected to add to Newmont’s production portfolio in the short- to medium- term. Project cost versus budget and development stage advancement are used to measure progress during the year.    New projects are important for sustaining Newmont’s business over the long-term as well as providing the opportunity to grow production capability.

Reserves and Resources(1)

   Measures the reserves potentially available for future mining as well as the mineralization not yet proven to the level required for public disclosure.    The Reserves and Resources metrics promote the long-term sustainability of the business; this includes discovery of new deposits and the successful completion of the work needed to report new deposits.
(1) 

Reserves and Resources are measured separately, resulting in a total of 6 measures.

Target Setting and Calculation of Corporate Performance Bonuses. The 2015 Corporate Performance Bonus targets were a mix of demanding financial, production, and growth objectives derived from the annual business planning process. It is the LDCC’s perspective that the target should be challenging, yet achievable, and the 2015 targets are structured accordingly. The Corporate Performance Bonus for Officers has paid below target in four of the last ten years as shown below, which we consider as one measure of the level of difficulty of achieving a target award.

Corporate Performance Bonus Results, 2006-2015:

 

Year   Bonus %     Year   Bonus %  

2015

    142.6   2010     124.3

2014

    159.9   2009     129.6

2013

    143.4   2008     128.1

2012

    71.9   2007     89.1

2011

    75.0   2006     92.0

 

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The performance targets for the 2015 bonus plan were reviewed against the results for 2014 performance to ensure meaningful performance objectives were set for 2015, as summarized here:

 

  Corporate Performance
  Bonus Measure
   Change in Targets from 2014 to 2015    Approach and Rationale

  Safety

   TRIFR target achievement for 2015 was set as a 10% reduction from the “best demonstrated performance” (requiring higher performance than the 2014 target).   

  In 2014, our safety result was the best in the Company’s history and among the best in the ICMM. The 10% reduction in “best demonstrated performance” continues to drive focus on further reducing injury rates.

  CPB EBITDA

   Target achievement for 2015 was a 19% increase over the 2014 SSU-Adjusted EBITDA performance.   

  To determine the payout range, a statistical analysis based on historical performance was conducted; results of the analysis were then reviewed by internal experts and adjusted as appropriate based on an understanding of the operating environment.

  Cash Sustaining Cost

   Target achievement for 2015 was 15% improved cost over the 2014 target and exceeded the performance achieved in 2014.   

  The same process as noted with CPB EBITDA was used to determine the range of payout; based on the review, performance required for maximum payout increased by 100% (the performance for maximum payout increased from 5% overachievement to 10%).

  Project Execution

   Company projects (as well as the phase of on-going projects) vary year-to-year; therefore, year-to-year comparisons may not be valid. However, targets and ranges for these measures are based on business plan targets and incorporate estimated probability of achievement to ensure the objectives are deemed to be sufficiently challenging.

  Reserves and Resources

   Exploration investment decisions for reserves and resources vary year-to-year; therefore, year-to-year comparisons may not be valid. However, targets and ranges for these measures are based on business plan targets and incorporate estimated probability of achievement to ensure the objectives are deemed to be sufficiently challenging.

Based on the above and review of the business plan objectives, the level of difficulty for the bonus plan targets is deemed to be reasonably challenging.

If the Company achieves its targeted performance for each of the metrics, the payout percentage for the Corporate Performance Bonus is 100%. If the minimum amounts are not achieved for a particular metric (the “threshold”), no Corporate Performance Bonus is payable for that metric. For performance between the threshold and maximum for any metric, the amount is prorated to result in a payout percentage between 20% and a maximum of 200%.

2015 CORPORATE PERFORMANCE BONUS METRICS AND SUMMARY OF RESULTS

As noted previously, in 2015 Newmont continued to build on the foundation set in 2013 and 2014. Newmont’s operating performance for 2015 exceeded plan and in most cases, prior year performance. In reviewing the performance results and corresponding bonus plan payments, the LDCC also considered the business benefits of achieving above-target performance relative to the resulting additional bonus funding from the above-target performance (a form of return-on-investment, or “ROI”, perspective). The LDCC concluded that the bonus amount resulting from the performance above target was aligned with performance as business results from this performance exceeded the incremental bonus plan funding (a summary of this is illustrated in the table “Description of Above Target Achievement for the Corporate Performance Bonus and Corresponding Bonus Plan Funding” provided in the Executive Summary).

 

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The structure of the Corporate Performance Bonus structure as well as the performance and bonus results for 2015 are provided in the table below:

 

Bonus Structure   Bonus Payment Range   2015 Results
Performance
Metric
  Measure/
Unit
  Weighting   Minimum
(20%)
  Target
(100%)
  Maximum
(200%)
  2015
Performance
  Performance
Percentage
  Payout
Percentage(1)
Safety   Leading /
Lagging
  20%   Details provided below   Above Target   124.0%(2)   24.8%
CPB EBITDA   $M   20%   $2,009   $2,678   $3,120   $2,637;

Below Target

  95.7%   19.1%
Cash Sustaining Cost   cost/
GEO(3)
  40%   $1,021   $950   $855   $865;

Above Target

  184.3%   73.7%
Project Execution   Milestone/
Cost
  10%   Details provided below   Above Target   104.0%   10.4%
Reserves   (oz. 000)   5%   0.50   1.40   CD(4)   4.30;

Above Target

  164.0%   8.2%
Resources   (oz. 000)   5%   1.50   1.85   CC(4)   3.03;

Above Target

  128.9%   6.4%

Total Result =

          142.6%

 

(1) 

Calculated by multiplying “Weighting” x “Performance Percentage”

 

(2) 

Actual performance was above target, but TRIFR was reduced to target as described below

 

(3) 

Cost/GEO is calculated by dividing Cash Sustaining Costs (CSC) by GEO. CSC is calculated by adding back non-cash changes in inventory and stockpile and leach pad inventory adjustments to AISC (See Annex A for AISC). GEO is Gold Equivalent Ounce; determined by converting copper production into a gold equivalent for an overall measure of production efficiency.

 

(4) 

CD is cover depletion; CC is cover conversion

Summary of the Safety metric for 2015: Our Corporate Performance Bonus includes two categories of performance measures. First are leading indicator safety metrics which aim to identify and remediate potential safety risks, and aim to establish visible safety leadership to further instill safe behavior across the Company. The second is a lagging indicator safety metric to measure the results of our continuous improvement efforts and ensure our actions are improving safety performance. In 2015, our safety result was the highest in the Company’s history and among the highest in the ICMM, resulting in performance on TRIFR of 175% of target. However, Newmont experienced the unfortunate loss of two colleagues in 2015 and with this, the Committee determined that notwithstanding the overall performance, the TRIFR performance was capped. These results are provided in the following table with this adjustment.

 

Bonus Structure   Bonus Payment Range   2015 Results
Safety Metric & Purpose   Weighting   Minimum
(20%)
  Target
(100%)
  Maximum
(200%)
  2015
Performance
 

Performance

Percentage

 

Payout

Percentage(1)

Completion of Critical Control Audits

 

Percent of layered audits of critical control management plans completed against plan

  5%   80%   90%   100%   97%   167%   8.4%

Effectiveness of Critical Controls

 

Assessment of effectiveness of behaviors, processes, and equipment; verification that controls are operating as designed

  5%   60%   75%   90%   79%   128%   6.4%

Progression toward ownership and integration

 

Qualitative assessment of behaviors to further embed critical controls and drive fatality prevention

  2%   20%   100%   200%   100%   100%   2.0%

TRIFR:

 

Reduce Total Reportable Injury Frequency Rate (“TRIFR”) by 10% from best demonstrated performance (% reduced)

  8%   0.45   0.35   0.31   0.32   175%(2)   14.0%(2)

Total Result

  20%                   153.8%   30.8%

Adjusted Result

  20%                   124.0%   24.8%

 

(1) 

Calculated by multiplying “Weighting” x “Performance Percentage”

 

(2) 

TRIFR performance capped at target (100%), resulting in 8% payout, due to fatalities in 2015.

 

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Summary of the Project Execution metric for 2015: The project execution metric is an objective, results-based measure of project performance. For major projects that are planned to move into operation, we measure project spend versus budget and expected production. For projects that remain in the study phase, we measure performance based on how the projects are progressing through our investment decision process (or progress against schedule). The results and corresponding payment are audited by the Company’s Internal Audit department. For 2015, the total project performance yielded a score of 104% as noted in the table below.

 

Project Execution Elements   Factor
Weighting
    Performance
Percentage
 

Merian

    32     114

Long Canyon

    12     135

Turf Vent Shaft

    20     110

Yanacocha Water Treatment

    6     153

Ahafo Mill Expansion

    0 %(1)      0

Tanami

    6     92

Project Advancement

    24     61
   

Total Achievement =

    100     104

 

(1) Ahafo Mill Expansion was removed from 2015 AICP due to postponement of full-funding decision.

Corporate Performance Bonus Payments. To calculate the Corporate Performance Bonus percentage for each of the Officers, the respective target percentage of eligible earnings (i.e., prorated salary) was multiplied by 142.6% to determine the actual value of the bonus. The amount of the corporate performance bonus paid to the Officers is also reflected in the Non-Equity Incentive Plan column of the Summary Compensation Table.

 

Name(1)   2015
Eligible
Earnings
(A)
    Target
Payout
(%) (B)
    Company
Performance
% (C)
    2015
Payout
(A*B*C)
 

Gary Goldberg

    $1,135,783        105.0     142.6     $1,700,608   

Laurie Brlas

    $700,000        70.0     142.6     $698,740   

Randy Engel

    $611,877        63.0     142.6     $549,698   

Stephen Gottesfeld

    $500,000        59.5     142.6     $424,235   

Chris Robison

    $781,044        87.5     142.6     $974,548   

 

(1) Messrs. Goldberg, Robison and Engel received a salary increase during 2015 and therefore, eligible earnings differ from annual base salary.

Personal Bonus (30% of short-term incentives).

 

Personal Bonus Highlights:

 

   

Individualized personal objectives established for each Officer by the LDCC;

 

   

Objectives are pre-approved by the LDCC and the Committee receives a year-end performance assessment from the CEO;

 

   

Payment ranges from 0-200% of target based on individual performance;

 

   

Incorporates the leadership areas of strategy, people and organizational development, safety, operational execution and efficiency, corporate sustainability and financial goals;

 

   

Objectives may be single or multi-year; and

 

   

Payments are based on objective results and reasoned business judgment of the LDCC.

 

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Purpose of the Personal Bonus: The purpose of the Personal Bonus is to align personal performance with key individualized objectives that will support the long-term sustainability and performance of the Company. The personal objectives encompass the broad spectrum of responsibilities inherent in senior leadership roles and, in some cases, may not have immediate or tangible measures. The Personal Bonus component of the executive compensation program provides for a well-rounded assessment of executive performance, resulting in an improved correlation of pay and performance. Specifically, the program serves to provide the ability to:

 

 

Holistically consider performance against a broad set of strategic, operational, environmental, social, safety and financial business goals;

 

 

Incentivize and reward efforts that may be difficult to quantify, but provide long-term stockholder value;

 

 

Reward for timely adjustments to business dynamics not anticipated prior to the performance period;

 

 

Consider the multitude of complex factors that can affect performance inside and outside of management’s control for the purpose of assessing performance and providing appropriate compensation (e.g., economic cycles, market volatility, and fluctuations in commodities prices);

 

 

Take an extended long-term perspective ensuring directional alignment of current performance with the vision of the organization’s future;

 

 

Control the potential risk of sub-optimized results due to a focus on set goals which may no longer be a key priority; and

 

 

Differentiate awards based on a broad perspective of an individual’s contribution to the Company.

Determining the Personal Bonus: The Personal Bonus is not strictly formulaic given the difficulty in explicitly quantifying the aggregate performance. Accordingly, payments under this program are awarded based on results subject to the qualified business judgment of the LDCC. The LDCC can award payments out of a total bonus opportunity assigned to each Officer based upon such Officer’s overall performance against annual objectives. The LDCC receives a year-end performance assessment and recommendation for each of the Officers (except for the Chief Executive Officer) from the Chief Executive Officer. For the Chief Executive Officer, the Board of Directors determines the Personal Bonus based on his performance against the stated objectives for the year, as well as other factors potentially not contemplated prior to the start of the year. While the Personal Bonus is based on pre-established individual goals, they do not constitute performance measures that result in automatic payout levels. Instead, they provide a context for the Chief Executive Officer and LDCC to evaluate each Officer’s performance and contributions to the Company’s success when making the bonus payout determinations.

While no single personal objective is either material to an understanding of the Company’s compensation policies relating to the Personal Bonus program or dispositive in the LDCC’s decisions regarding the specific payout levels, in determining the awards for 2015 the LDCC considered the accomplishments as described below for each Officer.

 

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Personal Objectives for the Chief Executive Officer: Mr. Goldberg’s objectives and a summary of the results for those objectives are listed in the following table. For these achievements, Mr. Goldberg received a 150% Personal Bonus.

 

Objective    Summary of Results
Key Financial Results   

  Achieved $2.6 billion in CPB EBITDA1

 

   More than doubled free cash flow to $756 million despite a 9% drop in gold price

 

  Maintained an investment grade balance sheet and prepaid $454 million in debt

 

   Paid $52 million in dividends, continuing the gold price linked dividend policy

Lead Newmont’s Safety Journey to zero harm by focusing on individual behaviors, safety leadership coaching and operational risk management   

  Led actions to embed Newmont’s health and safety culture further in the organization; delivered industry leading safety performance as measured by both leading and lagging indicators.

 

  Reduced total injury rates by 18%, to among the lowest in the mining industry.

Lead Newmont to safely, responsibly and profitably reach production and cost targets   

  Sustained cost savings, reducing gold all-in sustaining costs by 10%.

 

   Increased gold production to five million ounces and copper production to 166,000 tonnes on an attributable basis.

 

   Exceeded efficiency targets by 25%, delivering sustainable cost and efficiency improvements of about $800 million.

 

   Continued work to maintain a fit-for-purpose organization through strengthened contingency plans for lower metal prices, reduction of administrative costs by about 5%, and outsourcing services in IT and Asia Pacific.

Lead Newmont to achieve profitable, sustainable growth through cost-effective projects, M&A and exploration   

  Improved portfolio value by acquiring and integrating an accretive, cash-flowing operating mine in Colorado.

 

   Generated about $300 million by divesting non-core assets.

 

  Completed the Turf Vent Shaft, progressed Merian (new mine operation), Long Canyon and the Tanami Expansion Project on schedule and on budget.

 

  Exceeded near-mine exploration targets and added 4.3 million ounces to Newmont’s gold Reserves by the drill bit.

 

  Delivered first quartile Total Shareholder Returns

Lead Newmont in building a strong leadership pipeline across all regions   

  Built a strong and increasingly diverse bench of leaders across the portfolio.

 

   Effectively progressed Global Inclusion & Diversity objectives.

 

  Achieved low voluntary attrition globally.

Lead Newmont in establishing industry leadership in the areas of social and environmental responsibility   

  Newmont named mining sector sustainability leader by the Dow Jones Sustainability Index.

 

   Achieved public targets for water, reclamation and grievances.

 

  Introduced new standards and strategies on human rights, energy and climate change.

 

  Secured the Investment Agreement in Ghana.

 

(1) 

See Annex A for a reconciliation of this Non-GAAP metric.

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

 

 

Laurie Brlas: During 2015, Ms. Brlas continued to strengthen investor relations, communicating our strategy and financial progress. Ms. Brlas reduced costs and enhanced service delivery for the Information Technology and Finance functions through effective governance, organization and process re-design, leading to a smooth transition of initial services to business process outsourcing. Last, Ms. Brlas delivered ongoing improvements to the internal planning process, and improved the bench strength of her team. Based on these accomplishments, Ms. Brlas received an at-target Personal Bonus.

 

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Randy Engel: Mr. Engel significantly enhanced the quality of Newmont’s portfolio in 2015 through the successful acquisition of Cripple Creek and Victor (“CC&V”) an accretive, cash flowing asset in a favorable jurisdiction. Mr. Engel also led projects that generated about $300 million by divesting non-core assets, including Waihi and Valcambi, at fair market value, further reducing risk and strengthening the Company’s balance sheet. Finally, Mr. Engel facilitated a successful strategy process with the Board of Directors. The positive outcomes achieved through several successful transactions, along with his other accomplishments serve as the basis for Mr. Engel’s above-target Personal Bonus.

 

 

Stephen Gottesfeld: During 2015, Mr. Gottesfeld played a critical role with oversight of legal matters associated with the successful acquisition of CC&V and divestitures of Waihi and Valcambi. Mr. Gottesfeld elevated awareness and delivered strong results through Newmont’s Ethics and Compliance program and implemented an effective sustainability model for the Company’s Policies and Standards. Last, Mr. Gottesfeld effectively supported the on-boarding of two new Directors and appointment of a Vice-Chair to the Board of Directors. Based on these accomplishments, Mr. Gottesfeld received an above-target Personal Bonus.

 

 

Chris Robison: During 2015, Newmont’s total injury rates decreased by 18% to .32, the lowest in Newmont history, with Mr. Robison leading efforts to achieve zero harm through safer behaviors and effective controls. Mr. Robison delivered strong results, outperforming on production, cost and Full Potential targets. Additional accomplishments include the successful integration and transition of CC&V; improving safety, cost and productivity at KCGM under a new management agreement; optimizing the project pipeline and completing the Turf Vent Shaft on time and below budget; and advancing other profitable projects including Merian, Long Canyon Phase 1 and expansions at Tanami and CC&V. Last, near-mine exploration targets were exceeded, adding 4.3 million ounces of gold Reserves by the drill bit. Based on these accomplishments, Mr. Robison received an above-target Personal Bonus.

The LDCC considered Mr. Goldberg’s recommendations, each Officer’s performance and key accomplishments in determining each Officer’s Personal Bonus amounts. In alignment with Mr. Goldberg’s recommendations, the Committee adopted and approved the following amounts:

 

Name  

2015 Eligible
Earnings(1)

(A)

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

Gary Goldberg1

    $1,135,783        45.0     150     $766,653   

Laurie Brlas

    $700,000        30     100     $210,000   

Randy Engel1

    $611,877        27     150     $247,810   

Stephen Gottesfeld

    $500,000        25.5     120     $153,000   

Chris Robison1

    $781,044        37.5     135     $395,403   

 

(1) 

Messrs. Goldberg, Robison and Engel received a salary increase during 2015 and therefore, eligible earnings differ from annual base salary.

For the year, combining the Corporate Performance Bonus and the Personal Bonus, representing 70% and 30% of the target annual incentive program respectively, the total annual bonus for the year as a percent of target is displayed in the table below:

 

Name   2015 Total Actual
Bonus
    2015 Total Target
Bonus
    Total Bonus as a
% of Target
 

Gary Goldberg

    $2,467,261        $1,703,674        145

Laurie Brlas

    $908,740        $700,000        130

Randy Engel

    $797,508        $550,690        145

Stephen Gottesfeld

    $577,235        $425,000        136

Chris Robison

    $1,369,951        $976,305        140

 

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Long-Term Equity Incentive Compensation.

 

Long-Term Equity Incentive Compensation Highlights:

 

   

Includes two programs, majority performance-based:

 

   

Performance Leveraged Stock Units weighted at 67% of the total target long-term incentive award — actual value and grant is dependent upon stock price performance and company TSR performance relative to gold industry peers.

 

   

Restricted Stock Units weighted at 33% of the total target long-term incentive award — value is based upon Newmont’s stock price performance.

Overview of the Long-Term Equity Incentive Compensation Programs for 2015. The LDCC reviews the executive compensation incentive structure annually for potential adjustments to ensure the programs are aligned with the current business environment and compensation principles. The LTI programs were reviewed again in 2014 for 2015 awards, and upon completing a holistic review of the total compensation structure, the Strategic Stock Unit (SSU) program (based on a measure of EBITDA) was discontinued and replaced with Restricted Stock Units (RSUs). (This was discussed in the 2015 CD&A under the section “Looking Ahead to 2015.”)

With this, the LTI programs for 2015 include:

 

Program Summary    Performance Leveraged Stock Units (PSU)    Restricted Stock Units (RSU)

Percent of Target LTI

   Two-thirds (67%)    One-third (33%)

Purpose

   Reward for stock price improvement and relative Total Shareholder Return (TSR)    Link pay directly with share price performance; provide a base level of retention value

Vesting Structure

  

Vests after three years based on performance;

no minimum payout floor

   Vests one-third per year over three years

The purpose of the change from SSUs to RSUs. The change was made to improve the effectiveness of our total compensation structure by using compensation vehicles that best align with the performance objective. The following provides the details for the change in LTI:

 

 

EBITDA was incorporated into the annual bonus plan as “CPB EBITDA” (see the previous section “Corporate Performance Bonus”) and removed from the LTI program to avoid duplication of metrics in the short and long-term incentive programs;

 

   

EBITDA better aligns with annual financial operating results and therefore, annual incentive plans (as it is a form of annual operating earnings);

 

   

Moving EBITDA to the Corporate Performance Bonus reinforced the importance of earnings to a broader population of employees, helping to drive a culture of focusing on “value” (i.e., earnings) over “volume” (i.e., production).

 

 

The change did not eliminate a key performance metric (EBITDA), rather it is reallocated to apply measurement to where it is best suited.

 

 

Improved the alignment and simplification within our programs—the aim of the LTI program is to align executive pay with the experience of shareholders and to incent the achievement of long-term, total shareholder returns. The revised structure simplifies and clarifies this alignment; it is a more effective structure as it applies the appropriate vehicle for the intended objective.

 

 

RSUs align executive pay with shareholder returns as the value varies directly with Newmont’s share price.

 

 

RSUs further assist with increasing the ownership position of our executive team.

 

 

RSUs aid with retention in down markets as it will provide a base level store of value.

 

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Equity Award Target Values. The LDCC designed target values of equity incentives for each Officer based upon competitive market data and the scope of the respective positions. These target values are expressed as a percentage of base salary as follows:

2015 TARGET LONG-TERM EQUITY INCENTIVES

 

Name   % of Base Salary1  
   

Gary Goldberg2

    478

Laurie Brlas

    375

Randy Engel

    300

Stephen Gottesfeld

    270

Chris Robison

    350
(1) 

LTI target is based on the employee’s salary as of March 1, 2015.

(2) 

Mr. Goldberg’s target percentage of base salary decreased from 500% to 478% for 2015 as described below.

Newmont’s Policy with Respect to the Granting of Equity Compensation. The Board has delegated to the LDCC the authority to grant equity to Officers, except the CEO; Board of Directors’ approval is required for CEO grants.

Determination of Awards. The LDCC grants equity awards to the Officers, and recommends equity awards for the CEO to the full Board to approve. In addition to the targets discussed above, the LDCC is responsible for determining who should receive awards, when the awards should be made and the number of shares to be granted for each award (in accordance with “Newmont’s Policy with Respect to the Granting of Equity Compensation” as described above). The LDCC considers grants of long-term incentive awards to the Officers each fiscal year. The awards are granted at fair market value (the average of the designated grant date high and low stock price for Newmont) shortly after the release of quarterly earnings, in which case, financial performance and potentially other material items have already been disclosed publicly, prior to the granting of any awards.

Criteria Considered in Determining the Amount of Equity-Based Compensation Awards. The LDCC considers several factors when determining equity awards for our Officers, including performance, market practice, projected business needs, the projected impact on stockholder dilution, and the associated compensation expense that will be included in our financial statements. Based on these considerations, the LDCC has managed stockholder dilution well within the norms of our peers and stated guidelines from proxy advisory services and institutional investors. For 2015, Newmont’s gross burn rate (annual use of shares as a percentage of shares outstanding) was approximately 0.84%, below the benchmark set by governance advisory services for our industry.

Change in CEO LTI Percentage and LTI Grants for 2015. The LDCC regularly reviews the Company’s executive pay positioning with the assistance of its independent consultant, Cook & Co., and management. Based on the review, the LDCC reduced the target LTI percentage for Mr. Goldberg from 500% to 478%. This resulted from the determination that Mr. Goldberg’s salary was below market, particularly while he had been delivering strong operating results. Rather than have the salary increase carry into the LTI value, and also to adjust Mr. Goldberg’s pay leverage closer to market norms, the LDCC made the decision to increase Mr. Goldberg’s LTI target at a lower rate of 2% resulting in a reduction of the LTI target to 478%. Other than Mr. Goldberg, Officer long-term incentive targets were not adjusted for 2015.

2015 LTI Grants for Mr. Robison. As discussed in Newmont’s 2014 CD&A, Mr. Robison’s employment and corresponding compensation was structured to address certain operational objectives as well as to develop and effectively transition his responsibilities to a successor. Based on this, two of Mr. Robison’s LTI grants for 2015 vary from the standard program (while remaining within the shareholder approved terms of Newmont’s long-term incentive plan) as discussed below.

 

 

2015 PSU Award. The PSU award vests at a different rate from the standard program, vesting one-third per year subject to performance results, rather than vesting in-full after three years (subject to performance results). The vesting of the grant was structured in this manner to provide flexibility for succession planning, supporting appropriate transition timing should Mr. Robison decide to retire during the three year period, pending business needs and successor readiness to assume the role. As announced in Newmont’s Form 10-K filed February 17,

 

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2016 (Item 9B. Other Information), Mr. Robison will retire from his role as Executive Vice President and Chief Operating Officer effective May 1, 2016. With this, two-thirds of the 2015 PSU grant will be forfeited.

 

 

2015 Incentive and Recognition RSU Award. Mr. Robison received an additional RSU grant in 2015 with a target value of $500,000 in recognition of his performance and as consideration for not having received a PSU grant in 2014 per the original terms of his offer. In this regard, the additional grant served as a “true-up” for vesting that may have otherwise occurred had he received a 2014 PSU grant as well as an additional incentive to continue the operational and succession planning objectives for 2015. As noted in the paragraph above, Mr. Robison has successfully completed these objectives including identifying a strong successor to assume the role upon his retirement.

2013-2015 Performance Leveraged Stock Units (PSUs).

 

PSU Compensation Highlights:

 

   

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

 

   

Newmont’s share price performance versus peers;

 

   

Absolute share price growth over the performance period; and,

 

   

Performance period is three years.

 

   

2013-2015 PSU Performance:

 

   

TSR performance was in the top quartile at the 91st percentile of the gold peer group;

 

   

However, correlated with the drop in gold price and industry market cap decline, Newmont’s stock price declined 63% over the same period;

 

   

Resulting in a PSU performance of 87% of target; with the change in stock price over the performance period, the average award value was significantly below target at 32% of target value.

 

   

PSUs represent the single largest component of the Officer compensation program and is aligned with stockholders’ experience.

The Performance Leveraged Stock Units (“PSUs”) align Officer compensation with long-term Company and stock price performance. The number of PSUs earned is determined at the end of a three-year performance period based upon the change in Newmont’s stock price (the “Market Payout Factor”) and the relative performance of Newmont’s stock price versus an industry peer group (the “TSR Payout Factor”). Payment for the PSU program can range from 0% to 200% in total, as detailed below.

Determining PSU Awards. The calculation of the PSU awards is based on the Target Performance Leveraged Stock Unit Award, Market Payout Factor and the TSR Payout Factor:

PSU Award = Target Performance Leveraged Stock Unit Award x (Market Payout Factor + TSR Payout Factor)

Target Performance Leveraged Stock Unit Award. The target stock award for each Officer is calculated by multiplying the Officer’s base salary by their target PSU award percentage. This value is then divided by the average daily closing price for the fourth quarter prior to the performance period (the “baseline”).

Target Performance Leveraged Stock Unit Bonus = (base salary x target %) / baseline

Market Payout Factor (“MPF”). The MPF is based on the absolute stock price change versus the baseline over the three year performance period. The baseline is compared to the average daily closing price of the last quarter of the performance period to determine the overall stock price change. The ratio of the two determines the MPF.

 

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The payment for the MPF can range from a minimum of 0% to a cap of 150% of target based on the absolute stock price performance during the performance period. Officers can earn up to 150% of target to incent performance; the award is capped at 150% in recognition that significant stock price appreciation may be related to changes in commodities prices. This range of payment is believed to strike an appropriate balance between retention, incentive and mitigation of excessive risk. The performance range is displayed in the graph below.

 

LOGO

TSR Payout Factor (“TPF”). The TPF is based on the relative Total Shareholder Return (“TSR”) of Newmont over the three-year performance period versus the TSR of an index of gold mining peer companies. The stock prices used in the TPF calculation are based on the same approach as noted for the MPF; however the calculation also adjusts for dividends paid during the period.

The payment for the TPF can range from 0 to 50% of target based on Newmont’s relative share price performance. Newmont’s stock price must reach at least threshold performance for Officers to receive any level of payment. Threshold performance under the TPF is defined as the median (50th percentile) TSR of the peer group index. Upon exceeding the peer group median TSR, each percent increase above the median TSR corresponds to a payment equal to 2% of target, up to a maximum of 50%. This 2% multiplier is used to incent over-achievement yet make the maximum award realizable without incenting excessive risk taking. For example, if Newmont’s TSR percentile ranking reaches the 60th percentile (10% above the median), the resulting payment would be 20% of target (10% above the median x 2% multiplier).

 

LOGO

In sum, the maximum PSU payout of 200% of the target PSUs would be awarded if the Company’s stock price at the end of the performance period equals 150% of the baseline and if the Company’s TSR reaches the 75th percentile of the peer group. If the Company’s TSR is at or below the median of the peer group, there will be no PSUs earned for the TPF (TSR) metric.

 

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PSU Peer Group. The companies in the TSR peer group are listed below, and may be altered prospectively from time to time due to mergers, acquisitions or at the discretion of the LDCC:

 

Agnico Eagle Mines Limited

   Gold Fields Limited

Anglogold Ashanti Limited

   Harmony Gold Mining Company Limited

Barrick Gold Corporation

   Kinross Gold Corporation

Compañía de Minas Buenaventura S.A.A.

   Newcrest Mining Limited

Freeport-McMoran Copper & Gold Inc.

   Yamana Gold Inc.

Goldcorp Inc.

    

Difference Between the TSR Peer Group and Pay Benchmarking Peer Group. The TSR peer group varies from the total compensation peer group because the TSR peer group is comprised of only companies with large gold mining operations, irrespective of comparable company size. The LDCC determined that a relative TSR peer group should focus on companies with gold operations, as those are the Company’s direct competitors for investors and are subject to similar market forces related to gold price changes. The total compensation peer group includes companies without gold operations, but those entities are more similar in revenue, net income, total assets, market capitalization and number of employees. The LDCC determined that the total compensation peer group is superior to the TSR peer group for evaluating the level of total target compensation, because the companies in the total compensation peer group are the Company’s competitors for talent and their business operations are of a relatively comparable size to Newmont.

PSU results for 2013-2015. 2015 continued to be a challenging period for natural resource and mining companies as discussed in the executive summary. However, Newmont’s stock price sustained the period more favorably than many of its peers. Newmont’s relative TSR versus peers (“TPF”) ended the period in the first quartile of the PSU peer group at the 91st percentile resulting in a TSR payout factor of 50%. Stock price decline over the performance period was 67% (“MPF”), resulting in an overall PSU performance for 2015 of 87% (except for Ms. Brlas and Mr. Robison’s PSU awards which are based on separate schedules as noted below due to the timing of Ms. Brlas’ hire and Mr. Robison’s vesting schedule).

Adjusting for the stock price decline over the period, the award value as of December 31, 2015 as a percent of target value for the 2013-2015 PSU program was 32% for Mr. Goldberg, Mr. Engel and Mr. Gottesfeld, and 65.9% for Ms. Brlas’ 2013 PSU award; 126.2% for Mr. Robison’s 2015 PSU award. The chart below shows the payments for each Officer, based on the results of the PSU awards in 2015.

 

Name   PSU Base
Salary (A)
    Target %
(B)
    Award
Amount
(C)=(AxB)
    Average
Q4 2012
Closing
Price
(D)
    Target
Shares
Award
(E=C/
D)
   

MPF

Price
Appreciation
% of Tgt

(F)

   

TPF

Relative
TSR
Value
(G)

   

PSU
Result

(H=F+G)

    PSU
Award5
(Rounded
Down)
(ExH)
    Value as
percent
of target
as of
12/31/151
 

Gary Goldberg

    $1,075,000        333     $3,582,975        $49.20        72,824        37.4     50     87.4     63,648          32.0

Laurie Brlas2

       $700,000        250     $1,750,000        $30.24        57,870        60.8     50     110.8     64,119          65.9

Randy Engel

       $595,000        200     $1,190,000        $49.20        24,186        37.4     50     87.4     21,138          32.0

Stephen Gottesfeld3

       $500,000        60        $300,000        $49.20          6,098        37.4     50     87.4       5,329          32.0

Chris Robison4

       $800,000        78        $622,222        $20.14        30,894        91.3     50     141.3     43,653        126.2

 

(1) 

The closing price of the Company’s stock on 12/31/15 was $17.99.

 

(2) 

Ms. Brlas was hired on September 9, 2013; the average closing price was calculated based on the three months prior to her hire date, which was $30.24.

 

(3) 

On February 19, 2013, Mr. Gottesfeld was promoted to the position of Executive Vice President, General Counsel and Corporate Secretary. His initial PSU award upon promotion to this level was provided on a pro-rata basis such that it vests one-third per year based on the metrics as described above for the PSU program. This amount represents one-third of his 2013 PSU award and covers the performance period of 2013-2015 for the MPF and TPF. The “Average Q4 Closing Price” was based on the average Q4 2012 closing price for this award.

 

(4) 

Represents one-third of Mr. Robison’s 2015 PSU award, Mr. Robison did not receive a PSU award in 2013.

 

(5) 

PSU Award reflects what was paid for actual 2013-2015 performance versus the Summary Compensation Table which reflects targets set in 2015, which will pay out in 2018.

 

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Restricted Stock Units.

 

Restricted Stock Unit Highlights:

 

   

Represent one-third (33%) of the total LTI target value;

 

   

Vest one-third per year over three years;

 

   

RSUs align executive pay with shareholder returns as the value varies directly with Newmont’s share price, further assist with increasing the ownership position of our executive team, and aid with retention during volatile economic cycles.

Structure of RSUs. Restricted Stock Units (RSUs) were added into the executive compensation program in 2015 as noted at the beginning of this section. RSUs are subject to the approval by the LDCC, granted as a percent of base salary at Fair Market Value (the average of the high and low price of Newmont on the date of grant), and vest one-third per year over three years.

2015 Restricted Stock Unit Awards. The Company granted Restricted Stock Unit Awards in February 2015. The RSUs vest in equal annual increments on the first, second and third anniversaries from the date of grant (February 24, 2016, 2017, and 2018). The grants were made in the following amounts:

 

Name   2015 Base
Salary (A)
    Target %
(B)
    Target
Award
Amount
(C = AxB)
    Award Date
FMV of
NEM stock
(D)
    Shares
Awarded
(E = C/D)
    Value as a
percent of
target as of
12/31/151
 
             

Gary Goldberg

    $1,150,000        159 %2      $1,828,500        $25.555        71,740        70.4

Laurie Brlas

       $700,000        125       $875,000        $25.555        34,329        70.4

Randy Engel

       $615,825        100     $615,825        $25.555        24,098        70.4

Stephen Gottesfeld

       $500,000              90     $450,000        $25.555        17,609        70.4

Chris Robison

       $800,000        116.7     $933,333        $25.555        36,522        70.4

 

(1) 

Based on Newmont’s closing price on December 31, 2015 of $17.99.

(2) 

Rounded.

As described above under “2015 LTI Grants for Mr. Robison,” Mr. Robison received an additional RSU grant in 2015 vesting in full after one year from the date of grant in the following amount:

 

Name   Target
RSU
Value (A)
    Award
Date
FMV of
NEM
stock
(B)
    Shares
Awarded
(A/B)
    Value as a
percent of
target as of
12/31/151
 

Chris Robison

    $500,000        $25.555        19,565        70.4
(1) 

Based on Newmont’s closing price on December 31, 2015 of $17.99.

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

 

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“Realizable” Compensation for 2015.

To assist stockholders with understanding regular annual compensation (salary, short-term incentives and long-term incentives) for Newmont’s Officers as of December 31, 2015, the following table summarizes actual salary paid, actual short-term incentives (Corporate Performance Bonus and Personal Bonus) paid for 2015 performance, and long-term incentives (RSUs and PSUs) awarded (targets set) in 2015 with the value based on Newmont’s closing stock price on December 31, 2015. The following table is not intended as a substitute for the Summary Compensation Table required by the Securities and Exchange Commission, which appears at page 66.

While Newmont delivered strong operating results and outperformed gold price and gold industry indices, the volatility and modest decline in the stock price of 4.8% for the year resulted in realizable values below target at year end:

 

Name   Actual
Salary Paid1
    Total
Actual
Bonus2
    Total
Actual
Cash
    Long-Term
Incentives3
    2015 Realizable
Compensation
    Realizable Compensation
as a % of Target
 

Gary Goldberg

    $1,135,783        $2,467,261        $3,603,044        $4,565,826        $8,168,870        97.5

Laurie Brlas

    $700,000        $908,740        $1,608,740        $2,179,129        $3,787,869        94.1

Randy Engel

    $611,877        $797,508        $1,409,385        $1,533,683        $2,943,068        97.5

Stephen Gottesfeld

    $500,000        $577,235        $1,077,235        $1,120,705        $2,197,940        96.6

Chris Robison

    $781,044        $1,369,951        $2,150,995        $2,676,390        $4,827,385        94.7

 

(1) 

Salary paid in 2015.

(2) 

Total Actual Bonus column reflects the amounts paid in 2016 for 2015 performance under the Corporate Performance Bonus and the Personal Bonus as stated in the section “Short-Term Incentives” earlier in this CD&A.

(3) 

Long-Term Incentives reflect:

 

   

PSU awards made in 2015 for the performance period 2015-2017, payable in 2018. The value reflects target shares times Newmont’s stock price on 12/31/15 of $17.99 resulting in a current award value of approximately 89% of target (stock price basis for determining the 2015 award was $20.14). Actual number of shares granted will not be known until after the completion of the 2015-2017 performance period.

 

   

RSU awards made in 2015 under the Restricted Stock Unit program as stated in the section “Long-term Incentives” earlier in this CD&A. The value reflects actual share grants based on the RSU award under the program times Newmont’s stock price on 12/31/15 of $17.99 resulting in a current average award value of approximately 70.4% of target. (Fair Market Value on the date of grant was $25.56.)

See page 29 in the Executive Summary for further description of the difference between realizable pay and the pay disclosed in the Summary Compensation Table.

Looking Ahead to 2016

Each year the LDCC holds a planning meeting outside of the regular Board of Directors meeting schedule to reflect on incentive plan performance and any feedback received regarding these plans (including input from shareholders and proxy advisory services, as well as considering the results of the Company’s annual “Say on Pay” vote), and discusses current and future business objectives to determine whether adjustments should be considered to improve the alignment of pay and performance. Based on this review in 2015 and subsequent discussions on proposed plan design revisions, the following plan structure changes are approved for 2016. While incentive plan structures have been approved, final approval of certain plan performance targets were pending at the time of the filing of this CD&A, and therefore will be disclosed in the Company’s 2017 annual proxy statement.

Corporate Performance Bonus Metrics. For 2016, the Corporate Performance Bonus will be revised to include a metric supporting Newmont’s sustainability efforts, in line with key business objectives. Environmental and community relations are key strategic objectives and a core component of Newmont’s values. Including sustainability as a component of Newmont’s annual bonus reinforces internally and externally the importance Newmont places on these elements.

Additionally, the annual bonus plan is expected to have an increased weighting on CPB EBITDA (“earnings”) relative to cost to further increase the focus on delivering value to shareholders. Full details of these program changes will be provided in the 2017 CD&A.

 

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Post-Employment Compensation

In order to alleviate concerns that may arise in the event of an employee’s separation from service with the Company and enable employees to focus on Company duties, the Company has post-employment compensation plans and policies in place that include Company funded benefits as well as employee contribution-based benefits. Post-employment compensation plans and policies provide for a broad range of post-employment benefits to employees, including Officers, and create strong incentives for employees to remain with the Company. The Company’s decisions regarding post-employment compensation take into account the industry sector and general business comparisons to ensure post-employment compensation is aligned with the broader market.

Retirement. The Company offers two tax-qualified retirement plans, the Pension Plan, which is a defined benefit plan and the Savings Plan, which is a defined contribution plan (401(k)). Both of these plans are available to a broad range of Company employees, generally including all U.S. domestic salaried employees. Because of the qualified status of the Pension Plan and Savings Plan, the Internal Revenue Code limits the benefits available to highly-compensated employees. As a result, the Company provides a non-qualified defined benefit plan (Pension Equalization Plan) and a non-qualified savings plan (Savings Equalization Plan) for executive grade level employees who are subject to the Internal Revenue Code limitations in the qualified plans. The two equalization plans are in place to give executive grade level employees the full benefit intended under the qualified plans by making them whole for benefits otherwise lost as a result of Internal Revenue Code annual compensation limits.

On a regular basis, the Company reviews its retirement benefits. The purpose of the review is to assess the level of replacement income that the Company’s retirement plans provide for a full career Newmont employee. The Company attempts to maintain a competitive suite of retirement benefits that accomplishes income replacement post retirement. The level of income replacement varies depending on the income level of the employee. The benefits included in the analysis are the pension plan, pension equalization plan, 401(k) matching contribution and social security benefits. The Company retirement benefits are important hiring and retention tools for all levels of employees within the Company.

See the 2015 Pension Benefits Table and 2015 Non-Qualified Deferred Compensation Table for a description of benefits payable to the Officers under the Pension Plan, Pension Equalization Plan and the Savings Equalization Plan.

Change of Control. The Company recognizes that the potential for a change of control can create uncertainty for its employees that may interfere with an executive’s ability to efficiently perform his or her duties or may result in a voluntary termination of an executive’s employment with the Company during a critical period. As a result, the Company originally adopted the Executive Change of Control Plan of Newmont in 1998, which was subsequently revised in 2008, to retain executives and their critical capabilities to enhance and protect the best interests of the Company and its stockholders during an actual or threatened change of control. As of January 1, 2012, the Company adopted a new Executive Change of Control Plan that removed the excise tax gross up, reduced the formula for severance, removed retirement plan contributions and reduced the time period for continuation of health benefits. The 2012 Executive Change of Control Plan applies to employees hired into, or current employees promoted into, eligible positions. The prior plan remains in place for employees who were eligible on, or prior to, December 31, 2011, because the terms of the prior plan prohibit any reduction in benefits to plan participants. The levels of benefits provided in the 2008 and 2012 Executive Change of Control Plans are intended to motivate and retain key executives during an actual or threatened change of control. Of the Named Executive Officers, based on their dates of hire, Messrs. Goldberg, Engel and Gottesfeld are eligible for benefits under the 2008 Executive Change of Control Plan; Mr. Robison and Ms. Brlas are eligible for benefits under the 2012 Executive Change of Control Plan.

In the event of a Change of Control, as defined in both the 2008 and 2012 Plans, and a qualifying termination of employment, certain designated Officers receive three times annual pay and other benefits. See the Potential Payments Upon Termination or Change of Control section for potential amounts payable to the Officers under the applicable Change of Control Plan. These benefits, paid upon termination of employment following a change of control on what is sometimes referred to as a “double-trigger” basis, provide incentive for executives to remain employed to complete the transaction and provide compensation for any loss of employment thereafter.

The 2013 Stock Incentive Plan approved by stockholders in 2013 incorporates a double-trigger upon change of control for any equity vesting and all equity outstanding only vests upon a double trigger of change of control and termination of employment.

 

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Severance. On October 26, 2011, the Company adopted the Executive Severance Plan of Newmont (the “ESP”) which replaced the Severance Plan of Newmont for employees in executive levels. The ESP provides severance benefits following involuntary termination without cause. The ESP was adopted to mitigate negotiation of benefits upon termination, provide additional protection to the Company and define and cap severance costs. Maximum benefits under the ESP are reduced from the prior severance plan of Newmont. Equity will vest pro-rata. The pro-rata portion represents the amount deemed to be earned. The purpose of the ESP is to provide income and benefit replacement for a period following employment termination, where termination is not for cause. The ESP allows the terminated employee time and resources to seek future employment.

See the Potential Payments Upon Termination or Change of Control section for potential amounts payable to the Officers.

Officer’s Death Benefit. The Company maintains group life insurance for the benefit of all salaried employees of the Company. In addition, Officers and executive grade level Officers have a supplemental Officer Death Benefit Plan. The purpose of the Officer Death Benefit Plan is to provide benefits to Officers of the Company beyond the maximum established in the Company’s group life insurance, as appropriate to their higher income levels.

See the Potential Payments Upon Termination or Change of Control section for potential amounts payable to the Officers under the Officer Death Benefit Plan.

Executive Agreements. All of the Officers are at-will employees of the Company, without employment agreements. However, the Company has agreed to provide Mr. Goldberg with benefits under the Executive Severance Plan of Newmont, pursuant to the terms of such plan, even if the Company alters the terms of such plan.

Other Policies and Considerations

Results of the 2015 Advisory Vote on Executive Compensation (“Say on Pay”)

In 2015, Newmont conducted an advisory vote on the compensation of the Officers in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted in 2010, commonly known as “Say on Pay.” As Newmont regularly engages stockholders to discuss a variety of aspects of our business and welcomes stockholder input and feedback, the Say on Pay vote serves as an additional tool to guide the Board and the LDCC in ensuring alignment of the Company’s executive compensation programs with stockholder interests.

The result of our 2015 Say on Pay vote indicates substantial support for the executive compensation of our Officers with 94% (excluding abstentions) of the votes cast “For” the advisory vote on executive compensation. The LDCC reviewed this result, and concluded that this result affirms our stockholders’ support of the Company’s approach to executive compensation. However, consistent with the Company’s ongoing commitment to best practices in compensation governance and strong emphasis on pay for performance, the LDCC continues to review compensation programs to further align executive pay with stockholder interests, as described in this CD&A. Although the LDCC did not make any changes to our 2015 executive compensation program and policies specifically as a result of the 2015 Say on Pay advisory vote, the LDCC did consider the vote in making decisions for the 2016 incentive structure. The LDCC will continue working to ensure that the design of the Company’s executive compensation programs is focused on long-term stockholder value creation, emphasizes pay-for-performance and does not encourage the taking of short-term risks at the expense of long-term results. The LDCC will continue to use the Say on Pay vote as a guidepost for stockholder sentiment and continue to respond to stockholder feedback.

Executive Compensation Risk Assessment

We believe that Newmont’s compensation program for the Chief Executive Officer and Officers is structured in a way that balances risk and reward, yet mitigates the incentive for excessive risk taking. Beyond prudent plan design and compensation policies, in January 2016, the Company’s Enterprise Risk Management (“ERM”) team conducted a risk assessment of the executive compensation program, reviewing all program changes since the prior assessment completed in January 2014.

 

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Upon review of the changes to the executive compensation programs from 2014 through 2015, it was determined that these changes align with the experience of shareholders and do not provide an incentive for excessive risk taking. The changes include an adjustment in the short-term incentive program that increases the percentage weighting for the Company Performance Bonus (with a corresponding decrease in the weighting for the Personal Bonus) for senior executives, the addition of EBITDA to the Company Performance Bonus, the replacement of the Strategic Stock Units (“SSU”) program with a Restricted Stock Unit (“RSU”) program at the senior executive level since EBITDA is now included in the short-term incentive program, and the replacement of SSUs with Performance Share Units (“PSUs”) at the vice president level.

In addition to the Company’s risk assessment process, the incentive program results are reviewed by the Company’s Internal Audit function (which formally reports to the Audit Committee of the Board of Directors) to further ensure program process and calculations are accurate and conform to the rules contained within each respective program. Finally, the 2013 Stock Plan approved by the stockholders of the Company provides for a limit of 1 million shares of restricted stock or restricted stock units, as defined in the 2013 Stock Plan, that may be granted with less than a 3-year vesting period.

Accelerated Grant and Vesting of Stock Awards

Change of Control. Immediately prior to a change of control, the following occurs:

 

 

PSUs: PSU performance will be measured using the change of control price of the Company stock. The pro-rata percentage of the actual payout of PSUs correlating to the period of time that elapsed prior to the change of control shall be granted in common stock. For the remainder of the actual PSUs correlating to the performance period that did not elapse prior to the change of control, the Company will issue restricted stock units that will vest at the end of the performance period. In the event that the acquiring company will not issue equity, the acquiring company may issue cash equivalent awards; and

 

 

RSUs: For the year of the change of control, a target RSU will be granted in the form of restricted stock units with one-third of the grant vesting the following January 1 and the next two-thirds of the grant vesting on the following two anniversaries of the initial vest.

Termination of Employment following Change of Control. All PSUs and RSUs vest upon termination of employment following a change of control.

Death/Long-Term Disability/Retirement/Severance

 

 

PSUs: In the event of severance, retirement, death or disability, PSU grants shall vest in a pro-rata amount based on actual performance for each PSU award. Performance for the time period for each award will be calculated (using the most recent fiscal quarter-end performance) and settled accordingly on a pro-rated basis.

 

 

RSUs: In the event of severance, retirement, death or disability, RSU grants shall vest in a pro-rata amount based upon the date of grant and separation date.

Stock Ownership Guidelines. The Company’s stock ownership guidelines require that all Officers own shares of the Company’s stock, the value of which is a multiple of base salary. For the Officers, the stock ownership guidelines are as follows:

STOCK OWNERSHIP GUIDELINES

 

Name   Multiple of
Base Salary
 

Gary Goldberg

    5   

Chris Robison

    3   

Laurie Brlas

    3   

Randy Engel

    3   

Stephen Gottesfeld

    3   

 

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Stock ownership guidelines were put in place to increase the alignment of interests between executives and stockholders by encouraging executives to act as equity owners of the Company. The LDCC sets the ownership guidelines by considering the size of stock awards. Unvested shares of restricted stock units and shares held in retirement accounts and target performance stock leveraged units within the three year performance period are considered owned for purposes of the guidelines. The LDCC reviews compliance with the guidelines annually. Executives who are new to their positions have five years to comply with the guidelines. All of the executives identified above are in compliance with the stock ownership guidelines or fall within the exception period.

Restrictions on Trading Stock. The Company has adopted a stock trading standard for its employees, including the Officers. The standard prohibits certain employees from trading during specific periods at the end of each quarter until after the Company’s public disclosure of financial and operating results for that quarter, unless they have received the approval of the Company’s General Counsel. The Company may impose additional restricted trading periods at any time if it believes trading by employees would not be appropriate because of developments at the Company that are, or could be, material. In addition, the Company requires pre-clearance of trades in Company securities for its Officers, and prohibits buying shares on margin or using shares as collateral for loans. Other than as stated in this paragraph and the stock ownership requirements stated above, the Company does not have a holding period on common stock delivered following the expiration of a restricted stock unit vesting period, or common stock delivered following the exercise of a stock option.

Perquisites. The Company’s philosophy is to provide minimal perquisites to its executives. In 2013, LDCC approved financial advisory services for the executives beginning in 2014. The benefit was approved on the basis that it assists with managing personal complexity with financial planning at this level and supports greater focus on Company business. For 2015, the benefit value ranges from $12,000 to $15,500 depending on employee level, and the executive may decide whether or not to receive the financial advisory services. If the executive elects to receive the financial advisory services, the amount of such services will be paid by the Company but will not be grossed up; employees will have the responsibility of paying the tax liability associated with the imputed income for the benefit. Separately, as the Company believes in promoting financial wellness for all employees, the Company also provides access to individual financial planning services for all employees under the terms of the agreement with the Company’s 401(k) administrator.

In alignment with Newmont’s safety and wellness culture, the LDCC approved the implementation of annual Executive Health Assessments for the CEO and Executive Leadership Team effective January 1, 2016. The Company strongly believes in investing in the health and well-being of its senior executives as an important component in providing continued effective leadership for the Company. The expected benefit value will range from approximately $3,000 to $5,000 per senior executive and will not include a tax gross-up.

Tax Deductibility of Compensation. Section 162(m) of the Internal Revenue Code of 1986, as amended, limits the amount of compensation in excess of $1,000,000 that the Company may deduct in any one year with respect to its chief executive officer and three other most highly compensated executive officers (excluding the chief financial officer) whose compensation must be included in this proxy statement because they are the most highly compensated executive officers. There are exceptions to the $1,000,000 limitation for performance-based compensation meeting certain requirements. For 2015, Corporate Performance Bonuses, Personal Bonuses, Performance Leveraged Stock Units and Restricted Stock Units do not meet the performance-based exception under Section 162(m) and are therefore subject to the $1,000,000 deduction limit. Thus, in 2015, Officer compensation amounts are greater than $1,000,000 and a portion of their salaries, bonuses, stock awards and other compensation items are not deductible by the Company. In 2015, Messrs. Goldberg, Robison, Engel, and Gottesfeld compensation amounts are greater than $1,000,000 and a portion of their salaries, bonuses, stock awards, and other compensation items are not deductible by the Company.

The Company is primarily focused on designing compensation programs that are intended to incentivize executive performance that will lead to long-term value creation for our stockholders. Nonetheless, the Company did include certain plans in the 2013 proxy statement that would allow the Company the ability to utilize the 162(m) performance-based exemption in 2014 and beyond, which is subject to ongoing analysis by the Company. Based upon this ongoing analysis, we may designate programs to be subject to the performance-based exception requirements under Section 162(m) in the future.

 

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Executive Compensation Tables

2015 SUMMARY COMPENSATION TABLE 

 

Name and

Principal Position

  Year    

Salary(1)

($)

   

Bonus(2)

($)

   

Stock

Awards(3)

($)

   

Option

Awards

($)

   

Non-Equity

Incentive

Plan

Compen-

sation(4)

($)

   

Change in

Pension

Value and

Non-Qualified

Deferred

Compensation

Earnings(5)

($)

   

All Other

Compen-

sation(6)

($)

   

Total

($)

 

Gary Goldberg

    2015        $1,135,783        $0        $9,452,443        $0        $2,467,261        $502,954        $50,484        $13,608,925   

President and Chief Executive Officer

   
 
2014
2013
  
  
   
 
$1,075,000
$1,055,151
  
  
   

 

$0

$0

  

  

   
 
$5,587,034
$5,283,906
  
  
   
 
$0
$0
  
  
   
 
$2,297,006
$2,066,796
  
  
   
 
$523,724
$310,202
  
  
   
 
$64,640
$47,167
  
  
   
 
$9,547,404
$8,763,222
  
  

Laurie Brlas

    2015        $700,000        $0        $4,511,366        $0        $908,740        $250,062        $28,721        $6,398,889   

Executive Vice President and Chief Financial Officer

   
 
2014
2013
  
  
   
 
$700,000
$201,923
  
  
   
 
$0
$1,168,419
  
  
   
 
$2,728,570
$3,145,806
  
  
   
 
$0
$0
  
  
   
 
$951,650
$270,982
  
  
   
 
$323,095
$48,380
  
  
   
 
$653,734
$32,493
  
  
   
 
$5,357,049
$4,868,003
  
  

Randy Engel

    2015        $611,877        $0        $3,175,119        $0        $797,508        $21,610        $34,998        $4,641,112   

Executive Vice President, Strategic Development

   
 
2014
2013
  
  
   
 
$595,000
$613,434
  
  
   

 

$0

$0

  

  

   
 
$1,855,415
$1,754,705
  
  
   
 
$0
$0
  
  
   
 
$848,500
$782,313
  
  
   
 
$1,963,741
$0
  
(7) 
   
 
$102,691
$12,000
  
  
   
 
$5,365,347
$3,162,452
  
  

Stephen Gottesfeld

    2015        $500,000        $0        $2,320,149        $0        $577,235        $25,270        $31,305        $3,453,959   

Executive Vice President and General Counsel

    2014        $500,000        $0        $1,403,240        $0        $592,663        $890,479        $95,089        $3,481,471   

Chris Robison

    2015        $781,044        $0        $5,361,868        $0        $1,369,951        $333,793        $15,900        $7,862,556   

Executive Vice President and

    2014        $700,000        $0        $0        $0        $1,259,563        $352,168        $15,600        $2,327,331   

Chief Operating Officer

    2013        $453,846        $928,307        $2,449,984        $0        $789,693        $134,091        $44,660        $4,800,581   
(1) 

For 2013, salary disclosed included payout of one payroll cycle from 2012 based on the structure of payroll periods.

 

(2) 

For 2013, amounts shown for Ms. Brlas and Mr. Robison represent a sign-on bonus paid in 2013 and differentiation from the Corporate Performance and Personal Bonus payments. The differentiation from the Corporate Performance and Personal in 2013 for Ms. Brlas and Mr. Robison is a calculation of such payout based on annualized salary rate rather than salary paid in the year. Ms. Brlas received a sign on bonus of $500,000, and a differentiation from the Corporate Performance and Personal Bonus of $668,419. Mr. Robison received a sign on bonus of $500,000 and a differentiation from the Corporate Performance and Personal Bonus of $428,307.

 

(3) 

Amounts shown represent the aggregate grant date fair value computed in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 718 (“ASC 718”). Pursuant to ASC 718 the aggregate grant date fair value of Performance Leveraged Stock Units (“PSU”) is determined by multiplying the target number of shares by a Monte Carlo calculation model, which determined a grant date fair value of the 2015-2017 (payout 2018) Performance Leveraged Stock Units of $41.85 per share for each participating Named Executive Officer. To assist with understanding the total pay change in 2015 compared to 2014 for Mr. Goldberg, as described in the “Executive Summary” in the CD&A on page 34, the majority of the increase in total pay is due to the projected theoretical valuation change in the PSU stock award from 2014 to 2015. While the target value of the PSU stock award as determined by the LDCC increased by only 2% from 2014 to 2015, the projected theoretical value of the shares upon vesting in 2017 and 2018, respectively, increased from 115% to 162% per share with the Monte Carlo valuation. A summary of the impact of the Monte Carlo valuation on the Stock Awards between 2014 and 2015 is shown in the table below; additional details regarding the Stock Awards can be found in the “Long-Term Incentives” section of the CD&A and in the subsequent “Grant of Plan Based Awards Table.”

 

Year         

Stock Value in Accordance with Summary Compensation Table

Disclosure Methodology

 
 

Stock Value

Awarded by the

LDCC

(RSU + PSU)

    RSU     PSU Projected Value     Total Stock Awards  

2015

    $5,500,000        $1,833,316        $7,619,127        $9,452,443   

2014

    $5,375,000        $1,792,008        $3,795,026        $5,587,034   

Change Between 2014 and 2015 (%)

    2     2     101     69

This table is not intended to replace the figure set forth above in the Summary Compensation Table, but is provided to assist stockholders in understanding target compensation considered by the LDCC.

Mr. Robison received three separate Performance Leveraged Stock Unit bonus awards in 2015, each representing one-third of a full award and becoming payable in 2016, 2017 and 2018, all of which are shown in the Stock Awards column of the Summary Compensation Table. The Performance Leveraged Stock Unit awards to Mr. Robison have the following Monte Carlo grant date fair values, $41.850 for the grant payable in 2018, $42.04 for the grant payable in 2017 and $43.27 for the grant payable in 2016. See the Compensation Discussion and Analysis for a description of these awards to Mr. Robison and the rationale. For 2014-2016 Performance Leveraged Stock Units (payout 2017, reflected in 2014), the aggregate grant date

 

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fair value of Performance Leveraged Stock Units is determined by multiplying the target number of shares by a Monte Carlo calculation model value of $27.20 per share for each participating Named Executive Officer. For 2013-2015 Performance Leveraged Stock Units (payout 2016, reflected in 2013), the aggregate grant date fair value of Performance Leveraged Stock Units is determined by multiplying the target number of shares by a Monte Carlo calculation model value of $47.95 per share for each participating Named Executive Officer with the exception of Ms. Brlas. Because Ms. Brlas’ 2013-2015 PSU award is based upon the average closing stock price for the three months prior to her hire date of September 9, 2013, rather than the average closing stock price of the fourth quarter of 2012, and the three year performance period is September 9, 2013 to September 9, 2016, rather than January 1, 2013 to December 31, 2015, the Monte Carlo grant date fair value on her 2013-2015 (payout 2016) PSU award is $39.24 per share. The maximum value of the Performance Leveraged Stock Units is 200% of target.

For the Strategic Stock Units utilized in 2013 and 2014, the grant date fair value is the target number of shares granted, multiplied by the fair market value on the date of grant, and the maximum value is 150% of the target. The Company’s 2005 and 2013 Stock Incentive Plans define fair market value of the stock as the average of the high and low sales price on the date of the grant, which is the grant date fair value for the Strategic Stock Units (“SSU”) and the 2015 restricted stock unit grants. For the 2014 SSU grants, the fair market value on the date of grant, February 26, 2014, was $23.655. For the 2013 SSU grants, the fair market value on the date of grant, February 27, 2013, was $40.915. Ms. Brlas’ 2013 SSU award on September 9, 2013, has a different grant date than the other participants and thus a fair market value of $30.41 per share, the average of the high and low sales price on September 9, 2013, the date of grant. In 2015, the Company transitioned to a restricted stock unit program to replace the SSU program. The restricted stock unit grants have a three year pro-rata vesting schedule. For details of the design of the program and transition see the CD&A. For the 2015 restricted stock unit grants, the fair market value on the date of the grant, February 24, 2015 was $25.555, and the grant values are shown in the Grants of Plan Based Awards Table.

 

(4) 

Amounts shown represent Corporate Performance Bonuses and the Personal Bonuses paid in cash. The executives received bonuses as follows: Mr. Goldberg corporate $1,700,608 and personal $766,653; Ms. Brlas corporate $698,740 and personal $210,000; Mr. Engel corporate $549,698 and personal $247,810; Mr. Gottesfeld corporate $424,235 and personal $153,000, and; Mr. Robison corporate $974,548 and personal $395,403.

 

(5) 

Amounts shown represent the increase in the actuarial present value under the Company’s qualified and non-qualified defined benefit pension plans. The PEP interest rate is based upon the PBGC interest rate. At December 31, 2015, the PBGC lump sum interest rate was 1.25%, at December 31, 2014, the PBGC lump sum interest rate was 1.00%, and at December 31, 2013, the PBGC lump sum interest rate was 1.75%. At December 31, 2015, the FASB rate was 4.80%, at December 31, 2014, the FASB rate was 4.32%, and at December 31, 2013, the FASB rate was 5.25%.

 

(6) 

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

 

(7) 

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

Refer to the Compensation Discussion and Analysis section of this Proxy Statement for a description of the components of compensation, along with a description of all material terms and conditions of each component. In 2015, the Salary and Bonus columns accounted for 8% of Mr. Goldberg’s total compensation as reflected in the Summary Compensation Table. The Salary and Bonus columns accounted for 11%, 13%, 14% and 10% of Ms. Brlas’, Mr. Engel’s, Mr. Gottesfeld’s and Mr. Robison’s total compensation, respectively, as reflected in the Summary Compensation Table.

2015 ALL OTHER COMPENSATION TABLE 

 

Name  

Company Contributions
to Defined Benefit  Plans(1)

($)

   

Change in Value
of Post-Retirement
Medical and Life Insurance(2)

($)

   

Perquisites(3)

($)

   

Total

($)

 

Gary Goldberg

    $15,900        $22,349        $12,235        $50,484   

Laurie Brlas

    $15,900        —          $12,821        $28,721   

Randy Engel

    $15,900        —          $19,098        $34,998   

Stephen Gottesfeld

    $15,900        —          $15,405        $31,305   

Chris Robison

    $15,900        —          —          $15,900