Business Context and Reporting Period
New Found Gold Corp. filed this Form 6-K on May 19, 2023, providing its Statement of Executive Compensation for the financial year ended December 31, 2022. Amounts are in Canadian dollars unless otherwise indicated. The filing is focused on executive and director compensation and does not provide operating or financial statement results.
Key Compensation and Equity Metrics
| 2022 Named Executive Officer | Salary | Option awards | Annual bonus | Total compensation |
|---|---|---|---|---|
| Collin Kettell, CEO and Executive Chairman | $360,000 | $1,844,584 | $180,000 | $2,384,584 |
| Craig Roberts, former CEO | $105,000 | Nil | Nil | $105,000 |
| Michael Kanevsky, CFO | $108,000 | $507,261 | $54,000 | $669,261 |
| Denis Laviolette, President | $252,000 | $1,291,209 | $126,000 | $1,669,209 |
| Greg Matheson, COO | $234,000 | $461,146 | $117,000 | $812,146 |
| Ronald Hampton, CDO | $182,000 | $391,207 | $78,000 | $651,207 |
The filing reports no pension value, share-based awards, or other compensation for the NEOs. No incentive plan awards vested or were earned during 2022 according to the separate awards table.
- The Option Plan had 12,575,125 options outstanding and 5,032,921 options available for future issuance as of the filing date.
- The plan limits issuances generally to 10% of outstanding common shares, with additional limits for insiders, individual recipients, consultants, and investor-relations providers.
- Non-NEO director compensation totaled $687,345 for Vijay Mehta, $564,085 for Raymond Threlkeld, $232,458 for Douglas Hurst, and $20,000 for Quinton Hennigh.
- The company has no pension or deferred compensation plans for directors or NEOs.
Material Changes Versus the Prior Comparable Period
- Collin Kettell became CEO on April 13, 2022, replacing Craig Roberts in a planned leadership transition. Roberts resigned as CEO and director on the same date.
- Kettell’s total compensation increased to $2,384,584 in 2022 from $1,691,220 in 2021, primarily due to higher salary, bonus, and option awards.
- Denis Laviolette’s total compensation increased to $1,669,209 from $1,571,220, while Greg Matheson’s increased modestly to $812,146 from $804,192.
- Michael Kanevsky’s total compensation increased to $669,261 from $72,000, reflecting a $507,261 option award and a higher salary and bonus.
- Ronald Hampton became Chief Development Officer on June 1, 2022, and received $651,207 in total compensation for the partial year.
- Aggregate compensation for the listed NEOs increased substantially from 2021, driven principally by option-based awards and higher salaries and bonuses.
Outlook, Governance, Risks, and Unusual Items
The company states that compensation is intended to attract and retain qualified personnel and align management with shareholders through a mix of salary, discretionary cash bonuses, and predominantly equity-based incentives. The Board does not use specific quantified performance goals or a formally selected peer group for 2022 compensation decisions.
The Board reviewed compensation-related risks and reported that no risks arising from compensation policies and practices were reasonably likely to have a material adverse effect. Directors, officers, and senior management are prohibited from using financial instruments to hedge or offset declines in the value of company equity securities.
Change-of-control provisions could require payments under management or employment agreements. Estimated payments as of December 31, 2022 were $720,000 each for Argentum and Flotsam, $504,000 for Bruno, $468,000 for Matheson, and $624,000 for Hampton. The filing also lists termination-without-cause amounts for certain executives. These obligations may be affected by accrued liabilities, incentive fees, the applicable agreement, and the timing and circumstances of termination.
The filing contains no revenue guidance, earnings outlook, cash-flow guidance, debt or liquidity discussion, operational guidance, or material contingencies unrelated to compensation.
Facts Investors Should Verify
- Reconcile the reported option-award values with the company’s IFRS 2 share-based compensation expense and the detailed option grants.
- Review potential dilution from 12,575,125 outstanding options and the 5,032,921 options remaining available under the plan.
- Confirm the status and terms of the management agreements with Argentum, Bruno, Matheson, BM Strategic, and Hampton.
- Assess the potential financial impact of change-of-control and termination provisions, including the former CEO’s disclosed arrangements.
- Review subsequent filings for changes to executive roles, compensation, option grants, or the annual shareholder approval of the Option Plan.