The annual incentive program for Executive Officers is a cash plan which rewards NEOs for Performance.
| } | Variable cash compensation is based on the level of achievement toward annual performance objectives that support financial and sustainability performance goals |
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| } | Performance against goals must at least meet a threshold performance, set at a challenging level, for a payout associated with each respective goal |
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| } | Incentive payouts for each metric are capped at 200% of target |
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| } | Payout levels are determined 100% based upon Company performance |
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| } | Annual incentive program target opportunities are set at the median of the Compensation Peer Group for comparable positions |
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| } | The metrics and design of the Executive Officer bonus plan are aligned with those of the non-executive corporate bonus plan |
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Target, Threshold, and Maximum Company Performance Levels
| } | The Committee sets performance metric targets for executive compensation that are both rigorous and challenging, carefully considering relevant risk factors and the business outlook. When |
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determining financial performance metrics, the Committee takes into account the annual operating plan and evaluates the achievability of these budget targets, factoring in macroeconomic risks and specific actions to meet these goals. As external conditions, such as foreign exchange rates and commodity price volatility, can significantly impact the business, the Committee partially adjusts targets to remove the performance effects of these variables. This ensures a more accurate reflection of the Company’s underlying performance.
| } | To further drive strong performance, the Committee establishes a clear range of performance levels. The threshold level is designed to reflect high performance, while the maximum level requires exceptional effort and results to achieve. For performance falling between the threshold and maximum, the payout amount is interpolated as a payout percentage between a threshold of 20% and a maximum of 200%. This structure ensures that executive compensation remains closely aligned with the Company’s performance, rewarding executives for achieving challenging goals. |
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2024 Annual Incentive Program Design and Metrics
The program for 2024 includes the following 6 metrics.
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| Financial | | | | Efficiency/ Production Costs | | }Corporate Plan Bonus (CPB) Adjusted Cash Sustaining Costs / Gold Equivalent Ounce (CSC/GEO) | | 30% |
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| | | | Value Creation | | }Corporate Plan Bonus (CPB) Attributable Adjusted Free Cash Flow (FCF; 30%)}Newcrest Integration Synergies (10%) | | 40% | |
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| Sustainability | | | | Safety | | }Fatality Risk Management (20%)Modifier: Repeat Significant Potential Events | | 20% |
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| | Social & Environment | | }Operating Sites Water Consumption Efficiency (5%)}Local / Indigenous Persons Employment (5%) | | 10% | |
Financial Metrics.(1) The financial metrics are directly linked to our primary strategic objectives: controlling expenses, enhancing production efficiency, and generating cash to boost stockholder value. These metrics constitute 70% of the target bonus opportunity and offer transparency into how meeting operational targets correlates with Newmont’s performance and the enhancement of stockholder value.
Metrics include:
| } | Operating Efficiency: as measured by Corporate Plan Bonus (CPB) Adjusted Cash Sustaining Costs / Gold Equivalent Ounce (CSC/GEO) to assess the operational efficiency and cost structure of precious metal production; this represents the total adjusted cash costs incurred by the company to sustain ongoing operations divided by the total number of gold equivalent ounces produced |
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| } | Value Creation Measures: as measured by Corporate Plan Bonus (CPB) Attributable Adjusted Free Cash Flow (FCF) to measure cash generated from its operations, after accounting for capital, necessary to maintain mining activities; FCF reflects the surplus cash available for debt reduction, dividends, share buybacks, or investments in growth opportunities |
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| (1) | Note that CPB Adjusted CSC/GEO and CPB Attributable Adjusted Free Cash Flow are non-GAAP metrics used for compensation purposes. See Annex A-1 for reconciliations. |
Sustainability Metrics. Sustainability forms a critical part of Newmont’s performance framework, representing 30% of the target bonus opportunity. As sustainability is a core value and strategic priority for the Company, this component aligns executive performance with the long-term health of the business, its people, and the environment. The safety metric reflects Newmont’s commitment to developing a workplace culture where the goal is to be free from fatalities, injuries, and illness. The social and environment metrics emphasize Newmont’s focus on creating sustainable value for its people, stakeholders, and host communities, ensuring that operational activities are conducted in a way that preserve and enhance both social and environmental relationships. Together, these metrics highlight the importance of long-term responsibility and stewardship in Newmont’s operational and corporate strategy.
Metrics include:
| } | Fatality Risk Management (FRM): Critical Control Verification, a leading safety practice, requires a target number of systematic reviews and validations of fatality prevention controls to be completed; the metric includes a Repeat Significant Potential Events modifier that reduces the FRM metric payout if events with the potential to result in fatalities reoccur |
| } | Operating Sites Water Consumption Efficiency: increase in water efficiency set through reduction of water consumption for each operating site; targets are set in alignment with Newmont’s external reduction goals as disclosed in the 2018 Newmont Annual Sustainability Report |
| } | Local / Indigenous People Employment: individual representation goals set across operational sites to achieve parity for local / Indigenous persons; targets for annual bonus were set in alignment with negotiated agreements with each respective local / Indigenous community in which we operate |
2024 Annual Incentive Program Results
In addition to reviewing quantitative results for each metric, the LDCC, along with the Safety and Sustainability Committee for sustainability metrics, conducts a qualitative assessment at the end of the annual performance cycle. This review considers both individual metric performance and overall business performance to ensure the annual bonus payout aligns with the Company’s holistic performance for the year.
For 2024, Company management proposed, and the LDCC approved, applying negative discretion due to employee fatalities during the year and overall financial performance, including costs exceeding the plan and stock price performance.
| } | The unadjusted payout for the 2024 Annual Incentive Program was 119.9% |
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| } | The adjusted payout was reduced to 79.9%, reflecting a 40-percentage-point reduction |
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A detailed breakdown of performance metrics follows below.
| · METRICS · WEIGHTING · THRESHOLD · TARGET · MAXIMUM · 2024RESULT · % ACHIEVEMENT · · WEIGHTED PAYOUT |
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| FINANCIAL | Cash- Sustaining Costs(1) per Gold Equivalent Ounce(2) (CSC/GEO) | | 30% | | }$1,497 | | }$1,361 | | }$1,293 | | }Below incentive plan target due to lower production, higher operating costs, and general and administrative costs | | 47.2% | | 14.2% |
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| Attributable Adjusted Free Cash Flow $M(1) | | 30% | | }$350 | | }$538 | | }$828 | | }Above incentive plan target performance | | 161.3% | | 48.4% | |
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| Newcrest Integration Synergy $M | | 10% | | }$250 | | }$300 | | }$400 | | }Above target due to achieved general and administrative cost and Full Potential and Supply Chain synergies | | 200.0% | | 20.0% | |
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| Sustainability | Fatality Risk Management (FRM) with Repeat Significant Potential Events modifier | | 20% | | }Enrolled Managers / Superintendents: 3 CCVs & 3 coaching CCVs / month}Technical Specialists: 1 CCV / month}Supervisors & General Foreperson: 8 CCVs / month | | }Enrolled Managers / Superintendents: 4 CCVs & 4 coaching CCVs / month}Technical Specialists: 2 CCVs / month}Supervisors & General Foreperson: 10 CCVs / month | | }Enrolled Managers / Supervisors: target plus non-compliance detail captured (33%), action completion (33%), & coaching coverage (33%)}Supervisors and General Foreperson: target plus non-compliance details captured | | }Over 990,000 CCVs conducted during 2024 | | 128.0% | | 25.6% |
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| Operating Sites Water Consumption Efficiency | | 5% | | }Below 110% of 2023 water intensity | | }Below 2023 value | | }Below 2018 to 2023 average | | }Targets met or exceeded at 11 of 16 sites | | 125.9% | | 6.3% | |
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| Local / Indigenous Persons Employment | | 5% | | }70% of public goal | | }100% of public goal | | }130% of public goal | | }Targets nearly met, met, or exceeded at 11 of 16 sites | | 107.1% | | 5.4% | |
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| TOTAL UNADJUSTED PEFORMANCE | | 119.9% | |
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| OVERALL ADJUSTED PERFORMANCE | 79.9% | |
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| (1) | Certain metrics noted above are non-GAAP compensation measures; for definitions and reconciliations to the nearest GAAP measures, see Annex A-1 under the heading “Company Performance Bonus Measures.” The term “CPB Adjusted” measures as used in this Compensation Discussion & Analysis refers to such Corporate Performance Bonus Measures. |
| (2) | Gold equivalent ounces (GEOs). Calculated as pounds or ounces produced multiplied by the ratio of the other metal’s price to the gold price, using Gold ($1,400/oz.), Copper ($3.50/lb.), Silver ($20/oz.), Lead ($1.00/lb.), and Zinc ($1.20/lb.) pricing. |
Financial Metrics Summary.
The Company's performance in Cash Sustaining Costs per Gold Equivalent Ounce was below incentive plan target due to lower production volumes and increased costs across operations as well as general and administrative costs. The Gold Equivalent Ounce component of the incentive plan target was set higher than external targets, requiring higher performance. Free Cash Flow performance surpassed incentive plan target levels, while the Newcrest Integration Synergy
significantly exceeded maximum targets, primarily due to stronger-than-anticipated results from our Full Potential optimization program and enhanced supply chain efficiencies.
Sustainability Metrics Summary.
Newmont exceeded its target for fatality risk management, as managers, supervisors, and technical specialists across all sites performed above-target monthly critical control verifications. However, the safety metric payout was reduced by 5.6-percentage-points due to the Repeat Significant Potential Events modifier.
The two additional sustainability metrics showed strong results. Water consumption efficiency was above target performance, with 11 of 16 sites meeting or exceeding their goals. The Local/Indigenous Persons Employment initiative also demonstrated above-target performance, with 11 sites nearly meeting, meeting or exceeding expectations.
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| · NEO Annual Incentives · |
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| · The table below shows the annual incentive targets, performance, and payouts for the NEOs. · |
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| · NEO · TARGET OPPORTUNITY · · CORPORATE PERFORMANCE · · · · |
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| · · % OF · · · · · · · ACHIEVEMENT · · · TOTAL |
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| · · BASE PAY · · · VALUE · · VALUE AT 100% · · PERCENTAGE · · · PAYOUT |
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| · (%) · · ($) · ($) · (%) · · ($) |
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| | TOM PALMER | 150% | | $2,152,500 | | $2,152,500 | | 79.9% | | $1,719,848 | |
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| | KARYN OVELMEN | 100% | | $780,000 | | $780,000 | | 79.9% | | $623,220 | |
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| | NATASCHA VILJOEN | 110% | | $935,000 | | $935,000 | | 79.9% | | $747,065 | |
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| | PETER WEXLER(1) | 85% | | $446,831 | | $446,831 | | 79.9% | | $357,018 | |
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| | PETER TOTH | 100% | | $710,000 | | $710,000 | | 79.9% | | $567,290 | |
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| | ROBERT ATKINSON(2) | 110% | | $310,068 | | $310,068 | | 79.9% | | $247,744 | |
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| | (1) Mr. Wexler's targets were prorated based on hire date of March 11, 2024; prorated 296 days at 85% STIP target. | | |
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| | (2) Mr. Atkinson's targets were prorated based on exit date of May 3, 2024; prorated 124 days at 110% STIP target. | | |
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2025 Annual Incentive Program Design and Metrics(1)
For the 2025 Annual Incentive Program, the Company has maintained a 70% weighting of financial metrics and a 30% weighting for sustainability metrics emphasizing its commitment to safety, environment, and culture performance. The weighting previously aligned to the temporary Newcrest Synergies metric was equally reallocated to CSC/GEO and FCF. The Local / Indigenous Persons Employment metric was replaced with a metric focused on advancing Newmont’s culture. This metric underscores our commitment to fostering a respectful and inclusive workplace and reflects our active efforts to evolve our culture, integrating key drivers—employee sentiment, Respect at Work, local employment, and collaboration—to provide a holistic view. The 2025 plan remains based on 100% Company performance for each NEO.
| Financial | | | | Efficiency/ Production Costs | | }CPB Adjusted CSC/GEO | | 35% |
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| | Value Creation | | }CPB Attributable Adjusted Free Cash Flow | | 35% | |
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| Sustainability | | | | Health & Safety | | }Significant Potential Event Frequency Rate (14%) } Fatality Risk Management (FRM) (6%) | | 20% |
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| | Social & Environment | | }Operating Sites Water Consumption Efficiency (5%)}Focusing on Our Culture (5%) | | 10% | |
| (1) | Reflects the proposed 2025 annual incentive program design, which remains subject to final review and approval by the LDCC. |
