(Bloomberg News) Canada's biggest gold miners are replacing their senior executives at the fastest rate in at least a decade as shareholders demand greater returns.

Five of the top 20 Canadian gold producers by market value, including world leader Barrick Gold Corp., Kinross Gold Corp. and Centerra Gold Inc., have named new chief executive officers in 2012.

The shakeup comes as the Philadelphia Stock Exchange Gold & Silver 30-member companies index fell 14 percent this year, compared with a 0.4 percent drop for the benchmark Toronto Stock Exchange Index. The precious metals barometer has reached its lowest level relative to the price of gold in 28 years, according to data compiled by Bloomberg.

Gold equities are underperforming after "huge" project cost overruns and dilutive acquisitions by producers, said Rob McEwen, chief executive officer of McEwen Mining Inc.

"There's a skepticism that whatever a company says isn't actually going to happen," the founder and former CEO of Goldcorp Inc. said in a phone interview Aug. 10 from Toronto. "It's going to be over budget, behind schedule and it's not going to deliver on the promise. That seems to be a mentality that's taking root among investors and the biggest companies are just bright neon signs about the dangers."

Disappointing Performance

Barrick announced June 6 it had appointed Chief Financial Officer Jamie Sokalsky to replace CEO Aaron Regent, after the Toronto-based company was "disappointed" by its share price performance. Kinross Gold Corp., Canada's third-largest producer by sales, said Aug. 1 that J. Paul Rollinson, the company's vice president of corporate development, had been promoted to CEO, replacing Tye Burt. Kinross, based in Toronto, said at the time the change of leadership was needed to guide the company through capital allocation and project development improvements.

Other producers to replace CEOs this year include St. Laurent, Quebec-based Semafo Inc., a miner with operations in West Africa, which said Aug. 8 that Benoit La Salle, who ran the company since it was founded in 1995, would become executive vice-chairman and be replaced by Chief Operating Officer Benoit Desormeaux. Centerra Gold Inc., based in Toronto, appointed Ian Atkinson, the senior vice-president for global exploration, CEO from May 17. He replaced Steve Lang, who became chairman.

The latest announcement was from Great Basin Gold Ltd., a producer with mines in South Africa and Nevada, which said yesterday CEO Ferdi Dippenaar had resigned and the company was facing "liquidity challenges" and had started a strategic review. CFO Lou Van Vuuren was appointed interim CEO.

Breaking Point

Board-led management changes are a reaction to years of underperformance by North American producers compared with the gold price and companies' failure to meet targets on project budgets and assets they acquire, Jorge Beristain, an analyst at Deutsche Bank AG in Greenwich, CT, said in a Aug. 2 note.

"Lack of capital discipline and stock underperformance has reached a breaking point in the mining sector and we expect further management changes to come," Beristain said.

Andy Lloyd, a spokesman for Barrick, declined to comment. Steve Mitchell, a spokesman for Kinross, said he wouldn't add to Chairman John Oliver's Aug. 9 remarks on a conference call that the company is looking for a new approach. Centerra CEO Atkinson also declined to comment beyond a March 14 statement that announced the company's succession plan. Semafo spokeswoman Sofia St Laurent could not be reached for comment.

Institutional Pressure

Gold miners had been in a "scramble" to add reserves and boost production amid sharply rising gold prices, and are shifting their focus to cost containment and share-price performance, said Thomas Caldwell, who oversees about $1 billion as chairman and CEO of Toronto-based Caldwell Securities Ltd.

"There is some institutional pressure on these companies to really get these stocks performing on a better level," Caldwell said in an Aug. 14 phone interview.

Centerra, which operates a mine in the Kyrgyz Republic, has the worst return this year of 17 Canadian gold miners larger than $1 billion, having declined 63 percent in Toronto, compared with a 2.4 percent increase in gold futures. Barrick has fallen 26 percent and Kinross is 31 percent lower.

"When equities underperform, CEOs are held to account, or should be held to account," Ron Stewart, a Toronto-based analyst at Dundee Securities Ltd., said in a phone interview yesterday.

Most Active

Agnico-Eagle Mines Ltd., led by CEO Sean Boyd for the last 14 years, is the best performer this year, having risen 17 percent after a 52 percent drop in 2011. The company said in October it suspended operations at its Goldex mine in Quebec because of ground instability and flooding. Boyd is the longest tenured chief of a large Canadian gold producer.

Agnico has "dramatically outperformed the senior gold producers over the last 20 years, with the exception of last year," Dale Coffin, a spokesman for Agnico-Eagle, said by phone yesterday.

Chuck Jeannes, CEO of Goldcorp, was promoted from executive vice president of corporate development from January 2009. Since then, Goldcorp has declined 5.6 percent. The company, which raised its 2012 cost forecasts and lowered output projections last month because of difficulties at mines in Canada and Mexico, said Aug. 8 it had appointed George Burns COO to replace Steve Reid, who's leaving to pursue other interests.

Peter Marrone, CEO and founder of Yamana Gold Inc., the third-largest Canadian gold miner by market value, has been in the position since July 2003, while Vancouver-based Eldorado Gold Corp. appointed Paul Wright CEO in October 1999. In the past 24 months, Yamana has gained 47 percent while Eldorado has declined 39 percent.

More Scope

Spokeswomen for Yamana and Eldorado and a spokesman for Goldcorp didn't return phone calls and e-mails seeking comment.

This year's shakeups at large Canadian gold producers compare with just one CEO replacement in 2011, when Aurizon Mines Ltd. appointed George Paspalas to replace David Hall, and three CEO appointments in 2010. With more than four months still remaining, the five announcements by top-20 Canadian gold miners make it already the most active year in at least a decade, according to data compiled by Bloomberg.

"There's probably more scope for more changes in the sector," Stewart said. "Investors are increasingly frustrated with companies" that miss their own forecasts, he said. "I wouldn't be surprised if that continues to happen, that more CEOs will find themselves in the pogey queue," he said using slang for unemployment insurance benefits.

Not all the CEO changes in the sector this year were related to their share price. Aurico Gold Inc. said last month CEO Rene Marion would resign for health reasons on Sept. 3. and be replaced by CFO Scott Perry.

Companies may have opted to promote from within rather than hiring externally so that the new CEOs are already familiar with the assets, Caldwell said.

"You've got to be very careful when you are changing horses running mining companies," he said. "Every mining company and every ore-body is so specific that you develop a skill set that is almost proprietary."