I had the opportunity yesterday to speak with legendary founder and former CEO of GoldCorp, Rob McEwen. He is now the CEO, Chairman, and largest shareholder of McEwen Mining.
It was a powerful conversation, as Mr. McEwen spoke to why so many miners are failing to deliver returns to shareholders, the “illusory” strength of the post-presidential election economy, and his thoughts on gold and silver going forward.
When asked about the languishing share prices of miners over the last few years, Mr. McEwen said, “What you’re seeing in the market today, particularly amongst the large gold producers…is they were doing big deals to make big news, to pay themselves large salaries, and the shareholders have suffered as a result…Six years ago a large number of people in the industry said, ‘You have to be bigger to be relevant in the market. We want to have more reserve life, more production’, but they did it without regard for shareholdings.”
He further added that, “[There's] a point I try to drive home to investors…when someone is pitching you on a story and they say the outlook is great, their company is fantastic, you [need to] say, ‘Okay, I buy all that. [But] how much do you have invested in the company?…Are you taking a low salary?’…In the last six years you saw large salaries, large options, and small [CEO] investment…It contributes to [under performance], because you’re not thinking every day about your exposure in your own stock. That’s why in McEwen Mining I own 25% of the stock, and I don’t take a salary. I wanted to be in the position where I make money the same way that my shareholders do.” ...