In the workplace


Compensation and Benefits

Kinross’ compensation programs are designed to meet five basic principles:

Pay for performance: Employees are rewarded based on Company and individual performance;

Competitiveness: We provide a compensation package which is competitive in the local market and enables the Company to attract and retain top talent;

Consistency and fairness: Our global employees are treated in a fair and consistent manner, while recognizing and adapting to local laws, practices and circumstances;

Opportunity: Employees are able to improve their total compensation through their efforts and performance; and

Transparency and clarity: We clearly communicate the design and administration of compensation programs so employees can understand how their compensation is determined, and how they can affect it through their performance.

In each region, our aim is to achieve alignment between our global programs and local market practices. We regularly review local market compensation data to ensure we provide a total package that remains fair, competitive and well positioned to attract and retain the best talent, targeting total compensation around the 75th percentile.

For many employees, total compensation is also linked to performance, and may be above or below this target level, depending on individual and Company performance for the year. In 2011, we expanded our performance compensation review by integrating behavioural aspects of performance, including evaluation against Kinross’ four core values. The performance management system extends to the majority of management, technical, professional and administrative employees, representing approximately 20% of Kinross’ global workforce.

As we move into new markets, it is particularly important that we determine a compensation structure appropriate for the local market. In all our countries, salaries are reviewed annually, considering changes in the local labour market. In countries where less market data are available, other factors, such as cost of living and inflation may be considered. At our Fruta del Norte development project in Ecuador, due to the lack of mining industry data, we looked to general industry market data and peers in the oil and gas industry. In addition, recognizing our responsibility as a significant employer in a remote region, we evaluate our compensation levels against the living wage to ensure that the minimum rate we provide is at least equal to or above that level.

In 2011, Kinross provided total wages and benefits company-wide of $536.2 million, an increase from $391.4 million in 2010.

Senior executive compensation is closely linked to both personal and overall Company performance. In addition, a high percentage of total executive compensation through options and other equity grants is “at risk” and contingent on future Kinross share performance.

In 2011, in light of the Company’s disappointing shareholder returns, the Kinross Board of Directors reduced short-term incentive awards for each of the Company’s named executive officers by 50% or more compared with 2010, and reduced total direct compensation to each named executive officer by 20%. Former president and CEO Tye Burt requested that, in light of 2011 share price performance, he not be considered for any short-term incentive payment. The Board approved this request and, as a result, Mr. Burt received no cash bonus in 2012, reducing his total cash compensation by $2.6 million, or 64%, year-over-year. The Company outlines its executive compensation philosophy and a detailed breakdown of compensation for top executives in our 2012 Management Information Circular.

Our employee share purchase plan is available to regular Canadian and U.S. employees, as well as expatriates in our global employment organization who have completed six months of service. Employees can contribute up to 10% of their wages, with the Company matching up to 50% of each employee’s contribution. Under this plan, the Company issued approximately 304,000 shares in 2010 and 421,000 shares in 2011.

The Company also administers retirement plans that substantially cover all employees in North America and Brazil. Kinross does not currently have any active defined benefit plans in place.

Remuneration for full- and part-time employees usually includes access to extended health coverage, life insurance, disability insurance and other benefits aimed at protecting and enhancing employee health and well-being. We completed a review of our global benefits to formally assess the competitiveness of our programs in each of our regions in 2010 and 2011, and determined that they continued to meet our global standards.

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