UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.     )

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Filed by the Registrant

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Filed by a Party other than the Registrant

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CHECK THE APPROPRIATE BOX:

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Preliminary Proxy Statement

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Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material Under Rule 14a-12

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Royal Gold, Inc.

(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 ALL BOXES THAT APPLY):

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No fee required

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Fee paid previously with preliminary materials

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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11

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William Hayes Chair of the Board

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Your Board has always considered transparency and accountability as critical to long-term success, and I am pleased to highlight the completion of several initiatives in 2022 in these areas: we completed our first year with a calendar year-end reporting period, which allows stockholders to more easily compare our performance against that of peers; we issued our inaugural ESG Report, which communicates our commitment and approach to the sustainability of our business; and we issued inaugural annual guidance, which provides stockholders with greater transparency into our outlook for our asset portfolio. Your Board believes that these incremental enhancements to our long history of clear and open disclosure provide additional detail that can help stockholders understand how we think about our business and evaluate our performance.

 

We look forward to reviewing the achievements of 2022 with you, and you are cordially invited to join us virtually for our 2023 annual meeting of stockholders on May 25, 2023, at 9 a.m. mountain time. Holders of record of our common stock on March 31, 2023, are entitled to notice of and to vote at the virtual annual meeting. The accompanying notice of virtual annual meeting and proxy statement describe the business to be conducted at the meeting.

Thank you for your continued support.

Sincerely,

William Hayes
Chair of the Board

 

Table of Contents

​	​	2	​	​	​	NOTICE OF 2023 VIRTUAL ANNUAL MEETING OF STOCKHOLDERS	​
​	​	4	​	​	​	PROXY SUMMARY	​
​	​	4	​	​	​	About Royal Gold, Inc.	​
​	​	6	​	​	​	Proposals	​
​	​	7	​	​	​	Corporate Governance Highlights	​
​	​	10	​	​	​	Environmental and Social Highlights	​
​	​	11	​	​	​	Executive Compensation Highlights	​
​	​	13	​	​	​	Cautionary Note Regarding Forward-Looking Statements	​
​	​	14	​	​	​	Proposal 1 — Election of Directors	​
​	​	15	​	​	​	Board Skills and Diversity	​
​	​	18	​	​	​	Board Biographies	​
​	​	22	​	​	​	The Board’s Role and Responsibilities	​
​	​	28	​	​	​	Board Structure	​
​	​	29	​	​	​	Board Practices, Processes, and Policies	​
​	​	32	​	​	​	Compensation Committee Interlocks and Insider Participation	​
​	​	32	​	​	​	Director Compensation	​
​	​	36	​	​	​	Proposal 2 — Executive Compensation	​
​	​	38	​	​	​	Compensation, Nominating, and Governance Committee Report	​
​	​	38	​	​	​	Compensation Discussion and Analysis	​
​	​	61	​	​	​	Executive Compensation Tables	​
​	​	61	​	​	​	Summary Compensation Table	​
​	​	63	​	​	​	Grants of Plan-Based Awards in 2022	​
​	​	64	​	​	​	Outstanding Equity Awards at the End of 2022	​
​	​	69	​	​	​	Options Exercised and Stock Vested in 2022	​

​	​	69	​	​	​	Potential Payments Upon Termination or Change of Control	​
​	​	71	​	​	​	Other Compensation Matters	​
​	​	71	​	​	​	CEO Pay Ratio	​
​	​	71	​	​	​	2022 Pay Versus Performance	​
​	​	74	​	​	​	Proposal 3 — Advisory Vote on the Frequency of the Say on Pay Vote	​
​	​	76	​	​	​	Proposal 4 — Ratification of Appointment of the Independent Auditor	​
​	​	77	​	​	​	Independent Registered Public Accounting Firm Fees and Services	​
​	​	78	​	​	​	Preapproval Policies and Procedures	​
​	​	78	​	​	​	Audit Committee Report	​
​	​	79	​	​	​	Proposal 5 — Approval of an Amendment to Our Restated Certificate of Incorporation to Permit the Exculpation of Officers	​
​	​	83	​	​	​	Stock Ownership Information	​
​	​	83	​	​	​	Security Ownership of Certain Beneficial Owners and Management	​
​	​	85	​	​	​	Equity Compensation Plan Information	​
​	​	86	​	​	​	Other Information	​
​	​	A-1	​	​	​	Annex A — Calculation of Sec cap	​
​	​	B-1	​	​	​	Annex B — Proposed Amendment to Article TENTH of the Company’s Restated Certificate of Incorporation	​

 

PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION

Notice of 2023 Virtual
Annual Meeting of Stockholders

Items of Business

Stockholders will transact any other business as may properly be brought before the meeting and any postponement or adjournment of the meeting.

 

Virtual-only Meeting

The annual meeting of Royal Gold will be held entirely online via live audio webcast. The webcast is designed to provide stockholders the opportunity to participate virtually to facilitate stockholder attendance and to provide a consistent experience to all stockholders, regardless of location. You can attend and participate in the meeting by visiting www.virtualshareholdermeeting.com/RGLD2023, where authenticated stockholders will be able to listen to the meeting live, submit questions, and vote. There will be no physical location for stockholders to attend.

Meeting Materials

We are providing our “Notice of Internet Availability of Proxy Materials” to stockholders beginning on or about April   , 2023. This document contains instructions on how you can access our proxy materials online. We are also mailing a full set of our proxy materials to stockholders who previously requested paper copies of the materials. Our proxy materials can also be viewed on our website at www.royalgold.com under “Investors — Proxy Materials.”

By Order of the Board of Directors

Laura B. Gill
Corporate Secretary

Denver, Colorado
April   , 2023

 

PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION

Proxy Summary

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and we encourage you to read the entire proxy statement before voting. For more complete information regarding our financial and operational performance, we encourage you to review our Annual Report on Form 10-K for the year ended December 31, 2022 (“Annual Report on Form 10-K”). Unless the context otherwise requires, references to “Royal Gold,” the “Company,” “we,” “us,” and “our” refer to Royal Gold, Inc. and its consolidated subsidiaries.

About Royal Gold, Inc.

2022 Company Performance

We changed our fiscal year-end from June 30 to December 31, effective as of December 31, 2021. To effect the change, we used a six-month transition period from July 1, 2021, to December 31, 2021 (sometimes referred to herein as our “2021 Transition Period” or “Stub 2021”). Calendar year 2022 is our first full year with a December 31 fiscal year-end (“2022”).

 

Royal Gold has a long history of managing our business around a simple set of strategic goals that include acquiring high quality and long-lived assets in stable jurisdictions, funding our growth with limited equity dilution, maintaining a strong balance sheet and liquidity, and increasing our return to stockholders. In 2022, we achieved all of those goals.

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*

Gold equivalent ounces or “GEOs” are calculated as Royal Gold’s total revenue for 2022 of  $603.2 million divided by the average London Bullion Market Association ("LBMA") PM gold fixing price for 2022 of US$1,800 per ounce.

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Proposals

 

Corporate Governance Highlights

 

Class III Director Nominees at a Glance

Our Board is comprised of seven directors divided into three classes, with each class serving a term of three years. The following table summarizes important information about each director nominee standing for election to the Board for a three-year term expiring at our annual meeting in 2026.

Continuing Directors at a Glance

 

Board Characteristics

 

Environmental and Social Highlights

 

Executive Compensation Highlights

The following table summarizes the compensation for the period from January 1, 2022, to December 31, 2022, for our named executive officers (“NEOs”). Please see the Summary Compensation Table and accompanying footnotes beginning on page 61 for additional information. All amounts are in U.S. dollars.

Compensation Framework

Our executive compensation program consists of base salary, a short-term cash incentive, long-term equity incentive awards, and modest fixed benefits consistent with benefits offered to all of our employees. The majority of target compensation for our chief executive officer is performance-based and not guaranteed. We also emphasize long-term equity ownership to better align our executives’ interests with our stockholders’ interests.

 

In August 2021, the Board approved the change to the Company’s fiscal year end, and the CNG Committee determined that target awards for the year ended December 31, 2022, when combined with the target awards granted during the six-month transition period ended December 31, 2021, would properly reflect 18 months of value to reward and incentivize long-term performance directly aligned with stockholder interests. The CNG Committee granted full-year target equity values in August 2021 for the 2021 Transition Period and half-year target equity values for equity grants in March 2022 for the year ended December 31, 2022. As a result, the percentage of 2022 total compensation attributable to equity awards is significantly less than the percentage in prior periods. The CNG Committee returned to granting full-year equity awards in 2023 and plans to grant full-year target equity values in the future.

Pay-for-Performance Alignment

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1.

Net Geo Production equals (a) our revenue less cost of sales, adjusted to keep metal prices constant at budgeted metal prices, divided by (b) the budgeted gold price.

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2.

Adjusted Cash G&A Expense equals our general and administrative expense (“G&A Expense”) less (a) non-cash employee stock compensation expense, (b) litigation expenses, and (c) other extraordinary items, if any.

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3.

Net GEO Reserves and M&I Resources equals the sum of our estimated mineral reserves and mineral resources (for producing and development properties only), net of our cost of sales, divided by the budgeted gold price. Our mineral reserves and mineral resources and our cost of sales are adjusted to keep metal prices constant at budgeted metal prices.

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See detailed discussion of short-term and long-term incentive programs on pages 47 and 50, respectively.

 

Cautionary Note Regarding Forward-Looking Statements

This proxy statement contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from these statements. Forward-looking statements are often identified by words like “will,” “may,” “could,” “should,” “would,” “believe,” “estimate,” “expect,” “anticipate,” “plan,” “forecast,” “potential,” “intend,” “continue,” “project,” or negatives of these words or similar expressions. Forward-looking statements include statements regarding: benefits of recent asset acquisitions, including their growth potential; our commitment to the sustainability of our business; transparency and other benefits provided by annual guidance and our ESG Report; our business model; maintaining a strong balance sheet; financing growth using cash flow from operations and available credit; paying a growing and sustainable dividend; our investment strategy and growth potential; our corporate governance practices; expected actions if a director nominee is unable or unwilling to serve or does not receive a majority of the votes cast; beliefs regarding an effective board; goals of our enterprise risk management program; process for selecting directors; the goals and evaluations of and future plans for our compensation program; our enterprise risk management program’s mitigation of risks; consideration of director candidates submitted by stockholders; our commitment to diversity and inclusion, a sustainable business model and operations, and a supportive work environment; mitigating ESG risks to our investments; supporting operator commitments to responsible and ethical behavior; our Board’s self-assessment and evaluation of director candidates; goals of our anticorruption policy; the strength of our stream and royalty portfolio; results of ESG efforts; disclosure of changes to our Code of Business Conduct and Ethics; succession planning; amendments to our clawback policy; the CEO pay ratio; the potential for the Board to pick a frequency of the say-on-pay vote or an independent auditor different from that approved or ratified by stockholders; the fairness of and benefits to Royal Gold from limiting the liability of certain officers; answering stockholder questions at and after the annual meeting; the solicitation of proxies by directors, officers and employees of Royal Gold; and delivery of proxy materials.

Factors that could cause actual results to differ materially from our forward-looking statements include, among others, the following: changes in prices of gold, silver, copper, nickel or other metals; operating activities or financial performance of properties on which we hold stream or royalty interests, including variations between actual and forecasted performance, operators’ ability to complete projects on schedule and as planned, operators’ changes to mine plans and reserves and resources, liquidity needs, mining and environmental hazards, labor disputes, distribution and supply chain disruptions, permitting and licensing issues, contractual issues involving our stream or royalty agreements, or operational disruptions due to COVID-19, including due to variant strains of the virus; risks associated with doing business in foreign countries; increased competition for stream and royalty interests; environmental risks, including those caused by climate change; potential cyber-attacks, including ransomware; our ability to identify, finance, value and complete acquisitions; adverse economic and market conditions; changes in laws or regulations governing us, operators or operating properties; changes in management and key employees; and other factors described in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2022.

Forward-looking statements in this proxy statement speak only as of the date of this proxy statement. We disclaim any obligation to update any forward-looking statement, except as required by law. Readers are cautioned not to put undue reliance on forward-looking statements.

 

Proposal 1:
Election of Directors

Our Board recommends that our stockholders vote FOR each director nominee.

 

Proposal 1 — Election of Directors

Our Board consists of seven directors divided into three classes. Each class serves for a staggered three-year term. The Class III directors elected at our 2023 annual meeting will serve until our 2026 annual meeting or until their successors are elected and qualified or their earlier death or resignation. Our Board has nominated Fabiana Chubbs, C. Kevin McArthur and Sybil Veenman to stand for election as Class III directors at our 2023 annual meeting. Mss. Chubbs and Veenman and Mr. McArthur are currently serving on our Board and were most recently elected by stockholders at our 2020 annual meeting. Each nominee was nominated by our Board based on the recommendation of the CNG Committee. In making these nominations, our Board and CNG Committee considered each nominee’s experience, qualifications, and skills as described below. Each nominee has consented to serve as a director if elected. We have no reason to believe that any nominee will be unable or unwilling for good cause to serve if elected. However, if that occurs prior to the annual meeting, proxies may be voted for another person nominated as a substitute by the Board or the Board may reduce the number of directors.

Recommendation

The Board unanimously recommends that you vote “FOR” each director nominee. These individuals bring a range of relevant experience and overall diversity of perspectives that are essential to good governance and leadership of Royal Gold.

Vote Required for Approval

Each director must be elected by the majority of votes cast at a meeting at which a quorum is present. This means the number of shares voted for a nominee must exceed the number of shares voted against the nominee. Each nominee has tendered to the Board a contingent, irrevocable resignation that will become effective only if the nominee fails to receive the required majority vote and the Board accepts the resignation. If a nominee does not receive a majority of the votes cast, the CNG Committee will make a recommendation to the Board whether to accept or reject the resignation or whether some other action should be taken. The Board will act, taking into account the recommendation of the CNG Committee, and publicly disclose its decision and the rationale behind its decision within 90 days after the date of the certification of the election results. The director at issue will not participate in the discussion or decision of the Board.

Board Skills and Diversity

We believe that an effective board consists of individuals with diverse qualifications and experience that align with our business strategy. Each director contributes a distinct perspective to promote the best interests of Royal Gold and our stakeholders. Our CNG Committee has identified substantive areas of expertise that the Board as a whole should represent. The matrix below summarizes the knowledge, skills, and experience held by our directors that our Board believes are relevant to our business.

 

 

Sustainability and ESG Expertise

Our board members have significant knowledge, skills and experiences related to ESG that our Board believes are also relevant to our business. Through leadership roles at various mining and other companies, our Board members have experience with managing matters related to policy, regulatory issues and social responsibility, such as the following: tailings management; biodiversity; water quality; permitting; reductions in waste, effluents, and consumption of natural resources at mining operations; building strong relationships with communities and indigenous peoples to create lasting benefits; maintaining health and safety as a core value; and addressing climate change and the sustainable production of metals and minerals that are essential for building the technologies and infrastructure needed to transition to a low-carbon economy.

 

Board Biographies

Below is biographical information about our director nominees and continuing directors.

Director Nominees

Prior Experience:

Ms. Chubbs has over 25 years of progressive experience in the mining industry. Ms. Chubbs served as Chief Financial Officer of Eldorado Gold Corporation (“Eldorado”) from 2011 until her retirement in April 2018. She joined Eldorado in 2007 and led treasury and risk management functions until accepting the Chief Financial Officer position. Prior to Eldorado, Ms. Chubbs was a Senior Manager with PwC Canada. During her ten years at PwC Canada, she specialized in audits of public mining and technology companies. Ms. Chubbs started her career in her native Argentina, with experience divided between PwC Argentina and IBM. Ms. Chubbs holds dual degrees from the University of Buenos Aires, including a Certified Public Accountant bachelor’s degree and a Bachelor of Business Administration degree. She is a Chartered Public Accountant in Canada.

Other Public Company Directorships:

Ms. Chubbs has served as a director of Lithium Americas Corp. (TSX and NYSE: LAC) since June 2019. Ms. Chubbs currently serves as Chair of the Audit and Risk Committee and a member of the Governance, Nomination, Compensation and Leadership Committee at Lithium Americas Corp.

Reasons for Nomination:

Ms. Chubbs’ extensive international and financial experience as the CFO of a large public mining company with substantial international operations, together with her experience as an independent auditor of public mining companies during her tenure at PwC Canada and her expertise in Sarbanes-Oxley controls, risk management, and technology, enable her to provide valuable expertise and guidance to our Board with respect to global business issues and financial reporting.

Prior Experience:

Mr. McArthur has over 40 years of progressive experience encompassing many facets of the mining business, including operations, corporate development and executive management. Mr. McArthur retired from Tahoe Resources Inc. where he served as a director and Chief Executive Officer from 2009 to 2015 and Executive Chairman from 2015 to February 2019. Prior to joining Tahoe Resources, Mr. McArthur was President and Chief Executive Officer of Glamis Gold Ltd. from 1996 to 2006 when it was purchased by Goldcorp Inc., where Mr. McArthur served as President and Chief Executive Officer and a director until 2008.

 

Other Public Company Directorships:

Mr. McArthur has served as a director of Novagold Resources Inc. (TSX and NYSE: NG) since May 2022 (where he currently serves on the Engineering and Technical Committee and the Corporate Governance and Nominations Committee) and of First Quantum Minerals Ltd. (TSX: FM) since May 2021 (where he currently serves on the Environmental, Health Safety & Corporate Social Responsibility Committee). Mr. McArthur previously served as Chairman of the Board of Boart Longyear Limited (ASX: BLY) from September 2019 to November 2021 and a director of Pan American Silver Corp. (Nasdaq and TSX: PAAS) from February 2019 to May 2020.

Reasons for Nomination:

Mr. McArthur’s extensive experience managing mining operations as the chief executive officer of major precious metals mining companies, including Goldcorp Inc., Glamis Gold Ltd. and Tahoe Resources Inc. (which was subsequently acquired by Pan American Silver Corporation), and serving in positions focused on mine operations and project development with major international mining companies, including, BP Minerals and Homestake Mining Company, enable him to provide valuable expertise and guidance to our Board as it evaluates significant investments in royalty and stream interests in mining properties around the world.

Prior Experience:

Ms. Veenman has over 25 years of progressive experience in the mining industry. Ms. Veenman retired from Barrick Gold Corporation in 2014, where she served in various officer positions from 1994 to 2014, including Senior Vice President and General Counsel and a member of the executive leadership team from 2010 to 2014.

Other Public Company Directorships:

Ms. Veenman has served as a director of Major Drilling Group International Inc. (TSX: MDI) since December 2019 (where she currently serves as Chair of the Corporate Governance and Nominating Committee and a member of the Human Resources and Compensation Committee) and NexGen Energy Ltd. (NYSE: NXE) since August 2018 (where she currently serves on the Nominations and Governance Committee and the Compensation Committee). Ms. Veenman previously served as a director of IAMGOLD Corporation (NYSE: IAG) from 2015 to May 2021 and Noront Resources Ltd. (TSX-V: NOT) from 2015 to February 2020.

Reasons for Nomination:

Ms. Veenman’s extensive industry, legal and corporate governance experience as chief legal officer and member of the leadership team at Barrick Gold Corporation, and her substantial involvement on public company boards, enable her to provide valuable expertise and guidance to our Board with respect to the mining industry and to Royal Gold’s corporate governance, compensation plans and ESG strategy.

 

Continuing Directors

Prior Experience:

Mr. Hayes has over 30 years of progressive experience focused on mining. Mr. Hayes retired from Placer Dome Inc., where he served as Executive Vice President for Project Development and Corporate Affairs from 2004 to 2006, Executive Vice President for USA and Latin America from 2000 to 2004, and Executive Vice President for Latin America from 1994 to 2000. Mr. Hayes also worked as an executive, including chief financial officer, for various mining operations in Latin America.

Other Directorships:

Mr. Hayes served as a director of Antofagasta PLC (LON: ANTO) from 2006 to 2019, where he held various board positions over time, including Senior Independent Director, Audit Committee Chair, and member of the Safety and Sustainability Committee, Compensation Committee, and Nominating and Governance Committee. Mr. Hayes also served as Chairman of the Board of Tethyan Copper Company from 2007 through 2022.

Prior Experience:

Mr. Heissenbuttel has more than 30 years of corporate finance experience, including 25 years in project and corporate finance in the metals and mining industry. Mr. Heissenbuttel has served as our President and Chief Executive Officer and a Class I director since January 2020. Previously, he served as our Chief Financial Officer and Vice President Strategy from June 2018 to January 2020, Vice President Corporate Development from 2007 to June 2018, Vice President Operations from 2015 to June 2016, and Manager Corporate Development from 2006 to 2007. Prior to joining Royal Gold, Mr. Heissenbuttel served as Senior Vice President from 2000 to 2006 and Vice President from 1999 to 2000 at N M Rothschild & Sons (Denver) Inc. From 1994 to 1999, he served as Vice President and then Group Vice President at ABN AMRO Bank N.V. From 1987 to 1994, he was a Senior Credit Analyst and an Associate at Chemical Bank Manufacturers Hanover. Mr. Heissenbuttel holds a Master of Business Administration degree from the University of Chicago and a Bachelor of Arts degree from Northwestern University.

 

Prior Experience:

Mr. Sokalsky has approximately 30 years of progressive experience in the mining industry. Mr. Sokalsky’s experience in the mining industry began in 1993 as Treasurer and Vice President of Barrick Gold Corporation, where he served as Chief Financial Officer from 1999 to 2012 and CEO, President, and a director from 2012 to 2014. Mr. Sokalsky served as Chairman of the Board of Probe Mines Limited from 2014 to 2015.

Other Public Company Directorships:

Mr. Sokalsky has served as Chairman of the Board of Directors of Probe Gold, Inc. (TSX: PRB) since 2016 (and currently serves on the Nominating and Corporate Governance Committee and the Compensation Committee) and as a director of Agnico-Eagle Mines Ltd. (NYSE: AEM) since 2015 (where he currently serves as Lead Director of the Board of Directors and a member of each of the Audit Committee and Corporate Governance Committee). Mr. Sokalsky served as a director of Pengrowth Energy Corporation (NYSE: PGH) from 2015 to 2018.

Prior Experience:

Mr. Vance has over 40 years of experience in mining and corporate development. Mr. Vance retired from Teck Resources, where he served as Senior Vice President, Corporate Development from 2006 to 2014. Prior to joining Teck Resources, Mr. Vance worked as Managing Director of Rothschild (Denver) Inc. from 1991 to 2000 and as Managing Director/Senior Advisor of Rothschild Inc. from 2000 to 2005.

Other Directorships:

Mr. Vance served as Chairman of the Board of Southern Peaks Mining L.P. in 2018.

Director Independence

​	86%	​
​	6 out of 7 directors are independent. The only insider on our board is our CEO.	​

 

The Board’s Role and Responsibilities

Our Board is elected by stockholders to oversee management and assure that stockholders’ long-term interests are being served. A significant portion of our Board’s oversight responsibility is carried out through its standing committees: the Audit Committee and the CNG Committee. All committee members are independent under Nasdaq and SEC rules. Each committee meets regularly throughout the year, receives reports from senior management, reports its actions to the Board, and evaluates its performance annually. Each committee is authorized to retain outside advisors.

Board Oversight of Risk Management

Our Board is responsible for overseeing risk management, with a focus on the most significant known and potential risks confronting the organization, including any changes to the business needed to address these risks. We have established an enterprise risk management program that is designed to identify, define, manage, and mitigate risks as appropriate. Management is responsible for the day-to-day risk management and regularly reports to the Board and its committees on risk management matters. The Board reviews the adequacy of the enterprise risk management program and discusses with management appropriate changes to the program. Each of our directors has experience with risk management at the enterprise level.

Each committee of our board also meets with outside advisors (including outside counsel, consultants and experts), as desired by the applicable committee, to oversee risks associated with their respective principal areas of focus. In turn, each committee reports to the board regularly, fostering awareness and communication of significant matters among all directors, and promoting a coordinated and cohesive approach to enterprise risk oversight.

Enterprise risks are identified and prioritized by management through both top-down and bottom-up processes. Management frequently collaborates throughout the year to keep an open dialogue on emerging risks identified from a variety of internal and external sources.

 

Process for Selecting Directors

The CNG Committee considers the current and long-term needs of our business and seeks director candidates based on our emerging needs and current Board structure, tenure, skills, diversity, and experience.

The CNG Committee identifies a pool of qualified and diverse director candidates through a robust search process, which might include an independent search firm.

In accordance with our Board of Directors’ Governance Guidelines, the CNG Committee includes diverse individuals in any director search. Specifically, when identifying new director candidates, the CNG Committee requires that the initial list of candidates, whether generated internally or by a search firm, includes qualified candidates of gender, as well as racial and ethnic, diversity.

In addition, the CNG Committee considers the following qualifications, among others:

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Experience in mining and mine finance

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Independence

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Integrity

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Broad business judgment and leadership skills

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Areas of expertise

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Skills that may fill gaps on the Board

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Personal qualities and reputation in the business community

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•

Ability and willingness to commit adequate time to Board and committee duties

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The CNG Committee will consider director candidates recommended by stockholders using the same criteria outlined above. Stockholders should submit their recommendations in writing to our Corporate Secretary in accordance with the advance notice and other provisions of our Bylaws.

Director candidates are interviewed by all members of our board.

The CNG Committee recommends, and the full Board approves, nominees who they believe are best qualified to serve the interests of Royal Gold and its stockholders.

Director nominees are presented to stockholders for election to a three-year term.

 

Commitment to Social Responsibility

As a passive investor in mining projects, we do not have direct influence or control over operators or operations at the properties in which we invest. With just 31 employees across four offices in three countries, our direct environmental impact is low. However, as a financing provider for mining projects globally, we believe in applying the principles of social responsibility and environmental stewardship in our business interactions when we can, as summarized below:

 

 

Conditional Resignation Policies

Majority Vote

Under our Bylaws and Governance Guidelines, upon election or appointment to our Board and promptly following each annual meeting at which a director is reelected, each director must submit a contingent, irrevocable resignation from the Board. The resignation will become effective only if the director fails to receive the required majority vote at the next annual meeting where the director is standing for election and the Board accepts the resignation. If a nominee does not receive a majority of the votes cast, the CNG Committee will make a recommendation to the Board whether to accept or reject the resignation or whether some other action should be taken.

Age

We do not impose a mandatory retirement age for directors. However, under our Governance Guidelines, a director who has reached the age of 72 must submit an annual letter of resignation from the Board. The resignation will become effective only if accepted by a majority of the disinterested directors. Prior to the CNG Committee meeting in which director nominees were considered for the 2023 Annual Meeting, Mr. Hayes tendered a conditional resignation letter based on this policy. In March 2023, the disinterested directors chose not to accept his resignation after having considered (1) Mr. Hayes’ skills, extensive experience, expertise, leadership, and other attributes; (2) the recommendation of the CNG Committee that Mr. Hayes continue as a director; and (3) the endorsement provided by the holders of approximately 96% of the shares voting for directors at our 2022 Annual Meeting of Stockholders who voted for Mr. Hayes to serve an additional term as a director.

 

We do not impose term limits, as we believe they could result in a potential loss of contributions by directors who have developed increasing and valuable insight into our business and operations.

Job Change

Any director who retires from their job or substantially changes their principal occupation or business association must submit a letter of resignation in accordance with our Governance Guidelines. The CNG Committee will review any director resignation letter tendered and determine the continued appropriateness of Board membership under the new circumstances. The resignation will become effective only if accepted by a majority of the disinterested directors of the Board.

Management Succession Planning

We are committed to ensuring that we are continually developing leadership talent within the organization, and our Board is actively engaged in talent management. The Board regularly reviews and discusses our leadership pipeline and succession plans with a focus on executive positions. High-potential leaders are given exposure and visibility to directors through meeting presentations, informal events, and one-on-one meetings.

Stockholder Engagement

We proactively engage with stockholders throughout the year. During 2022 we met with 34 of our current investors owning approximately 30% of our outstanding shares. Our stockholder engagement is focused on dialogue, transparency, and responsiveness. Frequent and transparent communication with stockholders helps provide our Board and senior management with timely and useful feedback on a range of topics. Recent topics of engagement have included our financial performance, investment portfolio, corporate strategy, competitive environment, capital allocation, and ESG matters. Various members of our management team participate in these dialogues at times. Our management team provides quarterly updates to our Board on stockholder engagement and feedback.

In April 2022, we held a virtual Investor Day where members of our management team engaged with a number of our stockholders. In addition to discussing our 2021 performance, we had discussions regarding our sustainability efforts and inaugural ESG Report.

Communication with Directors

​	Write to us	​
​	Royal Gold, Inc. Attention: Corporate Secretary 1144 15th Street, Suite 2500 Denver, Colorado 80202	​

Our Corporate Secretary reviews communications to the Board. Communications relating to accounting, auditing, or fraud are forwarded to the Chair of our Audit Committee, and any other communications addressing a legitimate business issue are forwarded to other members of our Board as appropriate.

 

Board Structure

Our Board does not have a policy regarding separation of the roles of Chair and CEO. Our Board believes it is in our best interest to make that determination based on circumstances from time to time. Our Board believes that having an independent, non-executive Chair is currently the most appropriate structure. In the Board’s view, its current leadership structure effectively allocates authority, responsibility, and oversight between management and the independent directors. Mr. Hayes has served as our independent Chair since May 2014. If in the future we decide to appoint a non-independent Chair, our Governance Guidelines state that our independent directors will also appoint a lead independent director who will preside at meetings of the independent directors.

Committees of the Board

Our Board has two standing committees: the Audit Committee and the CNG Committee. Each committee is governed by a written charter that is reviewed annually and updated as appropriate to reflect best practices and regulatory or business changes. Each committee also reviews annually its own compliance with its charter. Committee charters are available on our website at www.royalgold.com under “ESG  —  ESG Document Library.”

 

   

Board Practices, Processes, and Policies

Meetings and Attendance

Our Board held 11 meetings during the year ended December 31, 2022. Each director attended all of the meetings of the Board and the committee on which he or she served during 2022. It is our policy that directors attend our annual stockholders’ meeting, and all of our directors attended last year’s virtual annual stockholders’ meeting.

Executive Sessions

Our independent and nonemployee directors meet regularly in executive sessions. In addition, the Audit Committee regularly holds executive sessions with our independent registered public accountants. The Audit Committee met in executive session with our independent auditors twice in 2022. Executive sessions are generally held at the beginning or end of each regular meeting.

Board and Committee Assessments

Our Board considers a thorough and constructive assessment process to be critical in properly assessing Board and committee effectiveness. Each year, the CNG Committee oversees assessments of the Board and each committee concerning their structure, role, responsibilities, and performance.

 

The CNG Committee oversees an annual self-assessment of Board and committee performance and effectiveness.

Our Board’s self-assessment focuses on numerous aspects of corporate governance and performance of the Board’s duties and responsibilities, including, for example, the Board’s culture and interactions with management; the structure, size, competencies, and experience of the Board and its committees; the Board’s effectiveness in guiding strategic direction; succession planning; and the adequacy of agendas, time allotments, and information provided to directors. Our Board may also identify skill gaps and prioritize skills that need to be added during its nomination process.

Simultaneously with the Board’s self-assessment, committee members assess the performance and effectiveness of the committee on which they serve.

Director Onboarding and Continuing Education

We conduct a comprehensive onboarding program with incoming directors to introduce them to Royal Gold and our management, business model, corporate strategy, financial condition, corporate organization, and governance practices.

Directors receive information to assist in the performance of their duties as directors and committee members, as applicable, including quarterly updates concerning legal, regulatory, accounting, tax, finance, compliance, and governance developments. We reimburse directors for attendance at external director education programs, membership in director organizations, and subscriptions to publications concerning governance and other relevant matters.

Board Governance Guidelines

Our Board has adopted Governance Guidelines as a general framework to assist the Board in carrying out its responsibilities. The Governance Guidelines are reviewed annually and updated as appropriate for evolving best practices and regulatory developments. The Governance Guidelines are available on our website at www.royalgold.com under “ESG — ESG Document Library.”

Code of Business Conduct and Ethics

Our Code of Business Conduct and Ethics applies to all employees, including our principal executive officer and our principal financial and accounting officer, as well as to the members of our Board. A copy of our

 

Code of Business Conduct and Ethics is available on our website at www.royalgold.com under “ESG — ESG Document Library.” We intend to disclose any changes to or waivers from the Code of Business Conduct and Ethics that are required to be disclosed by posting this information on our website.

Related-person Transactions

In accordance with its charter, the Audit Committee is responsible for reviewing transactions involving Royal Gold and any related persons, as defined under SEC rules. Any transaction with a related person, other than transactions available to all employees generally or involving less than $120,000, must be approved or ratified by the Audit Committee. Related persons include directors, executive officers, greater than 5% beneficial owners, and their family members and associated entities. In determining whether to approve a transaction, the Audit Committee considers all relevant facts and circumstances and takes into account whether the transaction is on terms no less favorable to us than terms generally available to an unaffiliated third party under the same or similar circumstances; whether the transaction would impair the independence of an independent director; and whether the transaction would present an improper conflict of interest for any director or executive officer. No related-person transactions are required to be reported for the year ended December 31, 2022.

Anti-hedging and Anti-pledging Policies

Our Insider Trading Policy prohibits directors, officers, and employees from hedging against their investments in our stock. This helps to ensure alignment between the interest of management and our stockholders generally. Specifically, the policy prohibits any director, officer, or employee from engaging in any of the following activities related to Royal Gold securities, including securities held directly or indirectly by the individual and equity awards received from us as compensation:

•

trading in our securities on a short-term basis; our policy provides that stock purchased on the open market should generally be held for a minimum of six months and ideally longer

​

•

purchasing or holding our securities on margin

​

•

short selling our securities

​

•

buying or selling put or call options or other derivative securities relating to our stock

​

•

engaging in hedging or monetization transactions, such as collars, equity swaps, prepaid variable forwards, and exchange funds with respect to our securities

​

•

participating in investment clubs that invest in our securities

​

•

placing open orders of longer than three business days or ending after a trading window has closed other than pursuant to a qualified trading plan

​

•

pledging our securities as security for any obligation

​

Our Insider Trading Policy is reviewed annually by the CNG Committee and the Board and updated as appropriate. Our Insider Trading Policy is available on our website at www.royalgold.com under “ESG — ESG Document Library.”

Trading Controls

Under our Insider Trading Policy, directors, officers, and employees and certain persons related to them must receive permission from our Corporate Secretary before entering into any transactions in our securities. Generally, trading is permitted only during open trading periods. Insiders may enter into a 10b5-1 trading plan under SEC rules. These trading plans may be entered into only during an open trading period with preapproval from our Corporate Secretary, and as of March 3, 2023, all such plans are subject to a 90-day waiting period before becoming effective.

 

Compensation Committee Interlocks and Insider Participation

None of the members of the CNG Committee who served during 2022 is, or has ever been, an officer or employee of Royal Gold or its subsidiaries. In addition, during 2022, none of our executive officers served as a member of the board of directors or compensation committee of any other entity that has one or more executive officers serving on our Board or the CNG Committee.

Director Compensation

Our director compensation program is designed to reflect current market trends with respect to director compensation. Among other things, our program is designed to provide a significant portion of total compensation in the form of equity to align the interests of directors with the interests of stockholders generally.

The CNG Committee is responsible for evaluating, and recommending to our independent directors, the compensation paid to nonemployee directors. The independent directors consider the CNG Committee’s recommendation and make final determinations on compensation for our nonemployee directors.

We do not have a retirement plan for nonemployee directors. Mr. Heissenbuttel, as our President and CEO, does not receive any additional compensation for his service as a director.

Peer Group Benchmarking

The CNG Committee reviews director compensation annually and retains an independent compensation consultant to benchmark director compensation against our peer group every other year. In March 2022, the CNG Committee relied on market information presented in February 2022 by its independent compensation consultant, Willis Towers Watson (the “Compensation Consultant”), in connection with the CNG Committee’s review of director compensation for 2022. The Compensation Consultant also used this same peer group for evaluating 2022 executive compensation. You can find information about this peer group on page 56. As a result, our peer group for purposes of benchmarking director compensation did not change between the 2021 Transition Period and the year ended December 31, 2022.

The Compensation Consultant provided market information with respect to the amount of director compensation using several methodologies, the forms of compensation used, and stock ownership guidelines for directors.

The review of director compensation found that our director compensation levels were in line with the market, and no change was made to the aggregate annual Board retainer and equity award except that because the directors received full-year value equity awards during the 2021 Transition Period, the directors only received half-year value equity awards in 2022.

 

Components of Director Compensation

Taking into account the benchmarking information described above and the recommendations of the Compensation Consultant, the CNG Committee recommended, and our independent directors approved, our 2022 director compensation program, as described below.

​

1.

Retainers and fees are paid quarterly in cash.

​

2.

Nonemployee directors received 688 shares of restricted stock (U.S. residents) or restricted stock units (Canadian residents) on March 3, 2022. Half of the shares vested immediately, and the remaining half vested on March 3, 2023, subject to continued service. The number of shares was determined based on the 30-day volume weighted average stock price for the period ended March 2, 2022, which was $109.04.

​

3.

The CNG Committee has historically made grants to non-employee directors in August. In August 2021, the CNG Committee determined that the August 2021 equity awards for the 2021 Transition Period should be based on full-year equity value, consistent with the approach taken with management. In March 2022, the CNG Committee awarded equity grants for 2022 based on half-year equity value. The CNG Committee determined that the value of the equity award for the year ended December 31, 2022, when combined with the value of the equity award for the 2021 Transition Period, appropriately reflected 18 months of value for each nonemployee director.

​

2022 Director Compensation

The following table provides information regarding compensation paid to or earned by our nonemployee directors for their services during the year ended December 31, 2022.

​

1.

Mr. Heissenbuttel’s compensation is shown in the Summary Compensation Table; he does not receive any additional compensation for his service as a director.

​

2.

Amount represents the grant date fair value of restricted stock or restricted stock units granted during 2022, calculated in accordance with financial statement reporting rules. You can find information about the assumptions used to calculate grant date fair values in Note 9 — STOCK BASED COMPENSATION to our consolidated financial statements in our Annual Report on Form 10-K for the year ended

​

 

December 31, 2022. In accordance with financial statement reporting rules, the grant date fair value for each share of restricted stock or restricted stock unit was $126.69, which was the closing price of our common stock on the March 3, 2022, grant date. The value shown in this table ($87,163) differs from the target value of the award in the previous table ($75,000). For administrative purposes, when the awards were granted, we used the 30-day volume weighted average stock price for the period ended March 2, 2022, which was $109.04, to calculate the number of shares to grant. For purposes of this table, we are required to report the awards at their grant date fair value calculated in accordance with financial statement reporting rules, as described above.

3.

Restricted stock grants to nonemployee directors vest 50% on the date of grant and 50% on the first anniversary of the date of grant. As of December 31, 2022, Mr. Hayes held 344 shares of unvested restricted stock. All other nonemployee directors elected to defer their 2022 equity compensation pursuant to our Deferred Compensation Plan, which is described below. Shares of restricted stock that are deferred have the same vesting restrictions.

​

4.

Mr. Vance served as Chair of the CNG Committee during all of 2022 and through March 31, 2023. Ms. Veenman was appointed as Chair of the CNG Committee effective April 1, 2023.

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Director Deferred Compensation Plan

Our nonemployee directors are eligible to participate in our Deferred Compensation Plan. The plan allows participants to elect to set aside eligible equity compensation in a tax-deferred vehicle for retirement or other life-event purposes. Participants can elect to receive certain income in a future year that would otherwise be paid in the upcoming year. These amounts are not subject to federal income tax at the time of contribution to the plan. The plan is intended to promote director retention by providing a long-term savings opportunity on a tax-efficient basis. Five of our six nonemployee directors elected to defer their 2022 equity awards. For the number of restricted stock awards or restricted stock units the vesting of which is deferred by each director under our Deferred Compensation Plan, see “Stock Ownership Information.”

Expenses

We reimburse nonemployee directors for their out-of-pocket travel, lodging, and meal expenses incurred in connection with their travel in service to our Board.

Director Stock Ownership Guidelines

We expect our nonemployee directors to have a significant long-term financial interest in Royal Gold. To encourage alignment with the interests of stockholders, each nonemployee director is required to own shares of our common stock equal in value to $600,000 within five years from the date of their first equity grant. Nonemployee directors are required to hold 50% of the shares acquired pursuant to any equity grant until they meet their ownership target. If there is a significant decline in Royal Gold’s stock price that causes a director’s holdings to fall below the applicable threshold, the director will not be required to purchase additional shares to meet the threshold but must refrain from selling shares until the threshold has again been achieved. Directors are also prohibited from hedging against their investments in our stock or pledging their shares.

Compliance is evaluated as of December 31 of each year using the 30-day volume weighted average stock price for the period ending on December 31 of such year. For purposes of determining compliance with these guidelines, the value of an individual’s holdings will be based upon the higher of  (1) the cost of acquisition or value at the time of grant or (2) the market value on the date of determination. As of December 31, 2022, all nonemployee directors exceeded their ownership guidelines or were within their five-year phase-in period.

 

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*

Actual values were calculated using the 30-day volume weighted average stock price as of December 31, 2022, of  $110.02 per share, per the revised Stock Ownership Guidelines.

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**

Ms. Chubbs became a director on November 18, 2020 and received her first equity grant on August 24, 2021. She has until August 24, 2026, to meet our stock ownership guidelines.

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Proposal 2:
Executive Compensation

Our Board recommends that our stockholders vote FOR approval of the advisory resolution on executive compensation.

 

Proposal 2 — Executive Compensation

We are seeking stockholder approval of an advisory resolution on the compensation of our NEOs as described in the Compensation Discussion and Analysis, compensation tables, and related narrative discussion included in this proxy statement.

This proposal, commonly known as a “say-on-pay” proposal, gives stockholders the opportunity to express a view on our 2022 executive compensation policies and practices and the compensation paid to our NEOs. This vote is not intended to address any specific item of compensation, but rather the overall compensation policies and practices relating to our NEOs as described in this proxy statement. Because your vote is advisory, it will not be binding on the Board. However, as they have done in prior years, the Board and CNG Committee will consider the outcome of the say-on-pay vote when considering future compensation arrangements.

At our 2017 annual meeting, stockholders approved, on an advisory basis, holding the say-on-pay votes annually, and our Board adopted a practice of providing for an annual say-on-pay vote. The Dodd-Frank Wall Street Reform and Consumer Protection Act requires, at least once every six years, that we solicit the preference of our stockholders for conducting the say-on-pay vote — every year, every two years, or every three years. Accordingly, in addition to providing an advisory vote on the say-on-pay proposal, stockholders are being asked to provide an advisory vote on the frequency of future say-on-pay votes at our 2023 annual meeting. See Proposal 3 — Advisory Vote on the Frequency of the Say on Pay Vote below.

Recommendation

Our Board unanimously recommends a “FOR” vote regarding our executive compensation because our Board believes that our compensation policies and practices are effective in achieving our compensation goals of paying a competitive salary, providing attractive annual and long-term incentives to reward growth, and linking management interests with stockholder interests.

Key elements of our 2022 executive compensation are described beginning on page 46.

Stockholders are asked to approve the following advisory resolution:

RESOLVED, that the compensation paid to Royal Gold’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion, is hereby approved.

Vote Required for Approval

The affirmative vote of a majority of the votes cast at a meeting at which a quorum is present is required to approve this proposal.

 

Compensation Discussion and Analysis

Compensation Summary

The CNG Committee reviews executive compensation annually and retains an independent compensation consultant to benchmark executive compensation against our peer group every other year.

 

Executive Officers

Our executive officers are as follows:

Below is biographical information about our executive officers.

​	William Heissenbuttel, 57	​
​	President and Chief Executive Officer	​

Mr. Heissenbuttel has more than 35 years of corporate finance experience, including almost 30 years in project and corporate finance in the metals and mining industry. Mr. Heissenbuttel was appointed our President and Chief Executive Officer and a Class I director, effective January 2020. Previously, he served as our Chief Financial Officer and Vice President Strategy from June 2018 to January 2020, Vice President Corporate Development from 2007 to June 2018, Vice President Operations from 2015 to June 2016, and Manager Corporate Development from 2006 to 2007.

Prior to joining Royal Gold, Mr. Heissenbuttel served as Senior Vice President from 2000 to 2006 and Vice President from 1999 to 2000 at N M Rothschild & Sons (Denver) Inc. From 1994 to 1999, he served as Vice President and then Group Vice President at ABN AMRO Bank N.V. From 1987 to 1994, he was a Senior Credit Analyst and an Associate at Chemical Bank Manufacturers Hanover.

Mr. Heissenbuttel holds a Master of Business Administration degree from the University of Chicago and a Bachelor of Arts degree from Northwestern University.

 

​	Mark Isto, 63	​
​	Executive Vice President and Chief Operating Officer, Royal Gold Corporation	​

Mr. Isto has 40 years of experience in mining engineering, mine management, and project development in the U.S. and globally. Mr. Isto has served as our Executive Vice President and Chief Operating Officer since January 2020. Previously, he served as our Vice President, Operations, from June 2016 to January 2020 and Executive Director, Project Evaluation, for our wholly owned subsidiary, RGLD Gold (Canada) Inc., from 2015 to June 2016. Mr. Isto has served as a director of Tri-Star Gold Inc. (TSX-V: TSG) since February 2021.

Prior to joining Royal Gold, Mr. Isto served as Vice President Operations for First Nickel Inc. from 2012 to 2014 and served in Vice President and Senior Vice President roles in the Projects Group at Kinross Gold Corp. from 2006 to 2012. Mr. Isto also served as Mine General Manager of Golden Sunlight Mines, Inc. (Placer Dome America) from 2004 to 2006 and previously held numerous other management positions in Placer Dome’s global operations, including Chief Engineer, Mine Superintendent, Project Director, and Senior Advisor over nearly 25 years with Placer Dome.

Mr. Isto holds a Master of Business Administration degree in Business Administration from the University of Nevada — Reno and a Bachelor of Science degree in Mining Engineering from Montana College of Mineral Science and Technology.

​	Daniel Breeze, 50	​
​	Vice President Corporate Development, RGLD Gold AG	​

Mr. Breeze has more than 25 years of technical and commercial experience across international markets. Mr. Breeze has served as Vice President Corporate Development of our wholly owned subsidiary, RGLD Gold AG, since January 2019 and is a member of the Board of Directors of RGLD Gold AG.

Before joining Royal Gold, Mr. Breeze worked for Bank of Montreal from 2010 to December 2018, serving most recently as Managing Director, Equities, for BMO Capital Markets, based in Zürich, Switzerland, where he was focused primarily on the mining sector. Previously, Mr. Breeze was a member of the Equities Group at UBS Investment Bank where he worked extensively with North American and European mining companies across the commodity spectrum. Prior to his banking career, Mr. Breeze was a member of the geotechnical and mining team at Golder Associates.

Mr. Breeze holds Master of Engineering and Master of Business Administration degrees from the University of Toronto and a Bachelor of Science degree in Civil Engineering from the University of Manitoba. Mr. Breeze is also a registered Professional Engineer.

 

​	Paul Libner, 49	​
​	Chief Financial Officer and Treasurer	​

Mr. Libner has more than 26 years of finance and accounting experience. Mr. Libner has served as our Chief Financial Officer and Treasurer since January 2020. Previously, he served as our Controller and Treasurer from June 2018 to January 2020 and Controller from 2004 to May 2018.

Mr. Libner began his career with Ernst & Young where he provided audit and business advisory services, primarily for the financial services and healthcare industries, and later held various finance and accounting roles within the financial services industry.

Mr. Libner holds a Bachelor of Science degree and Master of Accountancy degree from the University of Denver.

​	Randy Shefman, 50	​
​	Vice President and General Counsel	​

Mr. Shefman has more than 23 years of legal experience in international transactions across the mining, oil and gas, and power sectors. He joined Royal Gold in 2011 as Associate General Counsel and served in that capacity until his appointment as Vice President and General Counsel in January 2020.

Prior to Royal Gold, Mr. Shefman was in private legal practice with regional and international law firms, including LeBouef Lamb Greene & MacRae, Holland & Hart, and Hogan Lovells.

Mr. Shefman holds an LL.M. degree in Environmental and Natural Resources Law and Policy from the University of Denver, a J.D. degree from the University of Colorado, and a Bachelor of Arts degree in history from the University of Michigan.

 

​	Laura Gill, 58	​
​	Vice President, Corporate Secretary and Chief Compliance Officer	​

Ms. Gill has more than 30 years of legal experience in corporate governance, securities law compliance, corporate finance, and mergers and acquisitions. She joined Royal Gold in February 2022.

Prior to Royal Gold, Ms. Gill was Associate General Counsel for Nutrien Ag Solutions from May 2020 to March 2021, and a corporate attorney in private practice with Davis Graham & Stubbs, LLP from August 1993 to May 2020.

Ms. Gill holds a J.D. degree from the University of Texas School of Law and a Bachelor of Business Administration, Accounting, degree from Texas A&M University. Ms. Gill also studied at the Centre for Commercial Law Studies, Queen Mary University of London.

2022 Performance

Royal Gold has a long history of managing our business around a simple set of strategic goals that include acquiring high quality and long-lived assets in safe jurisdictions, funding our growth with limited equity dilution, maintaining a strong balance sheet and liquidity, and increasing our return to stockholders. In 2022, we achieved all of those goals.

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*

Gold equivalent ounces or “GEOs” are calculated as Royal Gold’s total revenue for 2022 of  $603.2 million divided by the average LBMA PM gold fixing price for 2022 of US$1,800 per ounce.

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Performance Measures Tied to Strategy

Our executives are responsible for driving corporate performance. Because of this, we design our executive compensation program so that it strongly correlates to our corporate performance. We use many of the same performance measures for our compensation programs as we use to chart corporate strategy and evaluate our success in achieving that strategy.

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1.

Net GEO Production equals (a) our revenue less cost of sales, adjusted to keep metal prices constant at budgeted metal prices, divided by (b) the budgeted gold price.

​

2.

Adjusted Cash G&A Expense equals our G&A expense less (a) non-cash employee stock compensation expense, (b) litigation expenses, and (c) other extraordinary items, if any.

​

3.

Net GEO Reserves and M&I Resources equals the sum of our estimated mineral reserves and mineral resources (for producing and development properties only), net of our cost of sales, divided by the budgeted gold price. Our mineral reserves and mineral resources and our cost of sales are adjusted to keep metal prices constant at budgeted metal prices.

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Compensation Best Practices

​	95%	​
​	Approval of our executive compensation at last year’s annual meeting	​

The following are representative practices that we do and do not employ:

 

Compensation Philosophy and Objectives

The CNG Committee sets and administers our executive compensation philosophy, objectives, and design. Our fundamental compensation philosophy is to recruit, retain, and reward high-performing individuals who will bring value to Royal Gold in a variety of ways:

 

Elements of Total Direct Compensation

Our executive compensation program consists of base salary, a short-term cash incentive, long-term equity incentive awards, and modest fixed benefits. The CNG Committee is of the view that total direct compensation should generally be set within 15% of the median of our peer group based on level of experience. The majority of target compensation is performance-based and not guaranteed. We also emphasize long-term equity to better align our executive officers’ interests with our stockholders’ interests.

Base Salary

Base salary is the fixed cash amount paid to an executive to perform his or her job duties. The CNG Committee reviews base salaries annually and retains an independent compensation consultant to benchmark salaries and other elements of compensation against our peer group every other year. When setting 2022 executive compensation in March 2022, the CNG Committee relied on market information presented in May 2021 by its independent compensation consultant, Willis Towers Watson (referred to in this discussion as the Compensation Consultant). The CNG Committee also takes into account the recommendations of Mr. Heissenbuttel, our CEO, with respect to salary adjustments for executives who report to him.

In general, base salaries are targeted at or near the median of our peer group, while also taking into account level of experience and performance. For our three U.S.-based executives, Messrs. Heissenbuttel, Libner, and Shefman, who were appointed to their current roles in January 2020, the CNG Committee has taken an incremental approach to market adjustments to their salaries so that their total direct compensation would generally approach median over the three-year period after their appointment.

 

Messrs. Isto and Breeze are paid in Canadian dollars and Swiss francs, respectively. You can find information about our methodology for converting their base salaries into U.S. dollars in the Summary Compensation Table beginning on page 61.

Named Executive Officer Base Salaries

​

(1)

Mr. Isto’s cash compensation is paid in Canadian dollars. The amounts in U.S. dollars equivalent as of December 31, 2021, and December 31, 2022, are $544,000 and $558,300, respectively. See the footnotes to the Summary Compensation Table for more information.

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(2)

Mr. Breeze’s cash compensation is paid in Swiss francs. The amounts in U.S. dollars equivalent as of December 31, 2021, and December 31, 2022, are $445,300 and $432,800, respectively. See the footnotes to the Summary Compensation Table for more information.

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Short-Term Incentive Awards and Additional Bonuses

Short-Term Incentive Program

The CNG Committee uses a formulaic scorecard that sets predetermined financial, operational, strategic, ESG, business integrity, and individual performance measures for determining awards of short-term incentives. These performance measures may be objective or subjective, depending on the nature of the measure. For example, measures tied to financial metrics are objective, while measures tied to ESG, business integrity and individual performance allow for judgment on the part of the CNG Committee. Our CNG Committee continues to believe that the short-term incentive program should have non-financial, non-formulaic elements that allow for positive or negative compensation adjustment based on qualitative performance assessments.

The CNG Committee believes the scorecard is transparent, uses measures that are understood by our executives and stockholders, and aligns executive pay with our performance.

In March 2022, the CNG Committee established a short-term incentive target for each executive based on a percentage of the executive’s salary for 2022. The short-term incentive targets of 100% of base salary (the midpoint of the range of 75% to 125%) for Mr. Heissenbuttel and 75% of base salary (the midpoint of the range of 60% to 90%) for other NEOs were consistent with the targets set in prior fiscal years, and were considered by the CNG Committee, based on the market survey provided by the Compensation Consultant, to be competitive with our peers.

The CNG Committee also approved various performance measures tied to corporate and individual performance and established threshold, target, and maximum performance goals for each objective measure. As part of its 2022 review of our overall executive compensation program, the CNG Committee applied its previously approved program modifications designed to integrate new short-term incentive performance measures for ESG and business integrity, to simplify the long-term incentive program, and to remove overlap between the short- and long-term incentive programs.

Payout under our short-term incentive program can range from zero if no threshold goals are achieved to 200% of an executive’s short-term incentive target if each maximum goal was achieved. In general, the CNG Committee sets performance goals based on the following guideposts:

 

Short-Term Incentive Scorecard Actual

Our 2022 short-term incentive program consisted of five categories of goals that were key to our continued success. These goals are summarized in the table below. In March 2023, the CNG Committee evaluated our corporate performance against each preestablished performance measure.

​

1.

Net GEO Production equals (a) our revenue less cost of sales, adjusted to keep metal prices constant at budgeted metal prices, divided by (b) the budgeted gold price. Budgeted metal prices for 2022 were $1,800 per ounce for gold, $22.50 per ounce for silver and $4.25 per pound for copper. For 2022, our Net GEO Production was 283,344 and was calculated as our revenue of  $603.2 million less our cost of sales of  $94.6 million, adjusted to keep metal prices constant, and divided by the budgeted metal price of  $1,800 per ounce of gold.

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2.

Adjusted Cash G&A equals our G&A expense less (a) non-cash employee stock compensation expense, (b) litigation expenses, and (c) other extraordinary items, if any. For 2022, Adjusted Cash G&A was $25.6 million and was calculated as follows: G&A of  $34.6 million, less (x) non-cash employee stock compensation expense of  $8.4 million and (y) litigation expense $0.6 million.

​

3.

Net GEO Reserves and M&I Resources equals the sum of the Company’s estimated mineral reserves and mineral resources (for producing and development properties only) as of November 30, 2022, net of our cost of sales, divided by budgeted metal price of  $1,800 per ounce for gold. Our mineral reserves and mineral resources and our cost of sales are adjusted to keep metal prices constant at budgeted metal prices of  $1,800 per ounce for gold, $22.50 per ounce for silver, and $4.25 per pound for copper. For 2022, the Company recognized 8,355,140 actual net GEOs in reserves and M&I resources from producing and development properties, compared to budgeted net GEOs in reserves and M&I resources of 7,589,861.

​

 

Short-Term Incentive Award Assessments

In March 2023, our CNG Committee determined payouts for our NEOs under our short-term incentive program based on the Company’s performance and individual performance. In assessing Royal Gold’s performance, the CNG Committee determined that our performance exceeded target on the following metrics: (1) Net GEO Production exceeded target, resulting in a payout of 109% of target; (2) Expense Control/​Adjusted Cash G&A exceeded target, resulting in a payout of 130% of target; and (3) Net GEOs in Reserves and M&I Resources exceeded target, resulting in a payout of 200% of target.

With respect to the ESG Achievements metric to support the long-term sustainability of our business, the CNG Committee recognized performance at target for 2022. The CNG Committee acknowledged the issuance of our inaugural ESG Report and management’s proactive solicitation of feedback; significant advancement of work on TCFD disclosures; support for the promotion of women and minorities within the industry through the establishment of scholarships focused on increasing diversity at U.S. mining schools; and the maintenance of carbon neutrality with respect to emissions associated with the Company’s direct corporate operations. The CNG Committee approved a payout of 100% of target on the ESG Achievements metric.

With respect to the Business Integrity metric, the CNG Committee assesses items such as the sufficiency of liquidity for new investments; the effectiveness of internal financial controls and cyber risk prevention; and portfolio health and asset valuation. For 2022, the CNG Committee recognized performance at slightly below target. The CNG Committee recognized that the Company had maintained sufficient liquidity to fund 2022 acquisitions, to grow our annual dividend, and to help service debt; and had taken steps to reduce cyber risks. While the CNG Committee believes the health of the Company’s stream and royalty portfolio is strong and views the royalty acquisitions completed in 2022 as world class, the CNG Committee noted, however, that the Company recognized an impairment loss of  $4.3 million on the carrying value of a non-principal royalty. As a result, the CNG Committee approved a payout of 85% of target on the Business Integrity metric.

The CNG Committee evaluated Mr. Heissenbuttel’s performance against his individual performance measures. The CNG Committee and Mr. Heissenbuttel evaluated the performance of our other NEOs against their individual performance measures. Individual performance goals for Mr. Heissenbuttel related to corporate strategy, stockholder engagement, expanded ESG efforts, employee health and safety, and succession planning. Individual performance goals for the other NEOs covered specific tasks relating to their areas of responsibility and covered topics such as asset management, business development efforts, expanded ESG efforts, or cost reductions, depending on the NEO.

The following tables show the payouts for the year ended December 31, 2022, for our NEOs.

Performance Versus Pre-established Performance Measures

 

Short-Term Incentive Awards Made for 2022

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Mr. Isto’s target bonus is based on an average 2022 conversion rate of one Canadian dollar to 0.77 US dollars, and Mr. Breeze’s target bonus is based on an average 2022 conversion rate of one Swiss franc to 1.1 US dollars.

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Long-Term Incentive Awards

Program Design

Long-term incentive compensation is designed to encourage executives to manage our business for the long term by delivering a significant portion of each executive’s potential total direct compensation at a future date.

Awards during 2022 were consistent with compensation program modifications implemented in August 2021 by our CNG Committee, following the recommendations of our Compensation Consultant, designed to simplify our long-term incentive program in a way that aligns with stockholder expectations and competitive market practices and to remove overlap between the performance measures under our short- and long-term incentive programs.

Types of Awards

Grants of annual long-term incentive awards for executives for 2022 were split equally between restricted shares and TSR performance shares.

Restricted Shares

Awards of restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) focus on retention by securing the long-term commitment of our executives. RSAs and RSUs granted in March 2022 vest ratably over three years. In August 2021, the CNG Committee changed the vesting schedule for restricted stock grants from vesting on the third, fourth and fifth anniversaries of the date of grant to vesting on the first, second and third anniversaries, as the delayed ratable vesting was not consistent with market practices. Our U.S.-based executives receive RSAs, and our executives based in Canada and Switzerland receive RSUs. RSAs are treated as issued and outstanding shares of common stock with voting and dividend rights. RSUs are not issued and outstanding shares upon which the grantee may vote or receive dividends; however, grantees are entitled to a cash payment (or dividend equivalent) in the amount of declared dividends at the time dividends are paid.

Performance Shares

Performance shares are intended to incentivize the achievement of long-term share price appreciation. Performance shares vest after three years only if we achieve a TSR compared to the TSRs of certain enumerated GDX constituents between defined threshold and maximum levels over that three-year period. No performance shares vest if the threshold goal is not met. Performance shares vest by linear interpolation within a range from zero shares if the threshold goal is met, to 100% if the target goal is met, and then to 200% if the maximum goal is met or exceeded. For all performance shares, the grantee must be in continuous service from the grant date through any vesting date to receive any shares. If the performance goals are not achieved during this period, the shares expire unvested.

 

Performance shares are not issued and outstanding shares upon which the grantee may vote or receive dividends. Performance shares vest only if the CNG Committee determines that the underlying performance goals are met and the service condition is satisfied. Vested performance shares are settled in shares of our common stock.

In August 2021, the CNG Committee eliminated performance measurement periods of less than three years for performance shares. Performance shares granted in 2022 vest at the end of three years subject to our relative TSR and the executive’s continued service.

Our TSR performance group is a customized group of companies comparable to Royal Gold with respect to geography (TSR group is limited to North American companies), capitalization (TSR group includes companies with over a $1.5 billion market capitalization, with two exceptions for 2022), and a gold focus. See “Peer Group Used for Compensation Benchmarking” on page 56. For 2022, our CNG Committee revised the TSR performance peer group to remove both Kirkland Lake Gold Ltd. and Pretium Resources Inc. (as both were acquired) and to add Wesdome Gold Mines Ltd.

Value of Awards Granted

The CNG Committee, informed by market information presented in May 2021 by the Compensation Consultant, set equity award values for executives in March 2022 taking into account the following factors:

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The CNG Committee generally sets the value of long-term equity awards at 225%-300% of base salary for our CEO and at 125%-200% of base salary for other NEOs and at an amount that results in targeted total direct compensation within 15% of the median of our peers, depending on the NEO’s experience.

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As a result of the CNG Committee granting full-year target equity values in August 2021 for the six-month 2021 Transition Period, the CNG Committee awarded half-year target equity values for equity grants in March 2022 for the year ended December 31, 2022. In August 2021, the Board approved the change to the Company’s fiscal year end and the CNG Committee determined that target awards for the year ended December 31, 2022, when combined with the target awards granted during the six-month transition period ended December 31, 2021, would appropriately reflect 18 months of value to reward and incentivize long-term performance directly aligned with stockholder interests. The CNG Committee returned to granting full-year equity awards in 2023 and plans to grant full-year target equity values in the future.

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