Karl Hanneman
About Karl Hanneman
Karl L. Hanneman (age 67) is Chief Executive Officer of International Tower Hill Mines Ltd. (THM) since January 31, 2017 and a director since May 30, 2018; he holds a B.S. in Mining Engineering (magna cum laude) from the University of Alaska and has 40+ years of Alaska-based mining experience, including 12 years at Teck Resources in leadership roles around the Pogo and Red Dog mines . THM is pre‑production and has prioritized project optimization and permitting for its Livengood Gold Project; disclosed performance context shows cumulative TSR volatility with the value of a $100 investment at $63.01 (2024), $80.82 (2023), and $58.90 (2022), while net losses were ~$3.6m (2024), ~$3.4m (2023), and ~$3.0m (2022) . The board deems only Hanneman non‑independent; chair and CEO roles are separated with a Lead Independent Director in place .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| International Tower Hill Mines (THM) | CEO | Since Jan 31, 2017 | Led Alaska team and Livengood Gold Project optimization, permitting readiness, and sequencing of technical studies . |
| International Tower Hill Mines (THM) | Director | Since May 30, 2018 | Board oversight; member of Technical Committee . |
| International Tower Hill Mines (THM) | COO | Mar 26, 2015 – Jan 31, 2017 | Oversaw operating planning pre‑feasibility and optimization . |
| International Tower Hill Mines (THM) | General Manager (Livengood) | From May 2010 | Assembled Alaska team; managed Livengood project activities . |
| Teck Resources | Alaska Regional Manager; Director, Corporate Affairs (Alaska) | 12 years | Led Pogo underground exploration, feasibility, design, permitting; senior corporate representative supporting Red Dog and Pogo . |
| Industry Leadership | President, Council of Alaska Producers; President, Alaska Miners Association; Gov. appointee, Alaska Minerals Commission; Director, Resource Development Council; Director, Fairbanks Chamber | Various | Policy, advocacy, and industry leadership in Alaska mining ecosystem . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Northrim BanCorp, Inc. | Director | Since 2014 | Current public company directorship (NASDAQ) . |
| Gatos Silver, Inc. | Director | 2020–2025 | Former; company experienced MCTOs in 2022–2023 due to reserve revision impacts; orders revoked July 4, 2023 . |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (% of Salary) | Actual Bonus Paid ($) | All Other Compensation ($) | Total Compensation ($) |
|---|---|---|---|---|---|
| 2024 | 166,100 | 100% (contractual target) | — (not disclosed as paid) | 65,565 (401k $4,983 + DSUs as director $60,582) | 302,793 |
| 2023 | 160,710 | 100% (contractual target) | — (none) | 66,282 (401k $4,821 + DSUs $61,461) | 274,067 |
- CEO base salary was reduced in 2018 from $300,000 to $150,000 to reflect scope and remained in place through 2024; salaries are reviewed annually .
- THM uses an informal, discretionary approach to annual cash incentives given project-stage focus; no formal bonus metrics disclosed and no bonus reported for 2022–2024 .
Performance Compensation
Equity Awards – Options (CEO)
| Grant Date | # Options | Exercise Price (C$) | Vesting Schedule | Expiration | Grant-Date Fair Value (USD) |
|---|---|---|---|---|---|
| May 29, 2024 | 150,000 | 0.94 | 1/3 on grant; 1/3 on May 29, 2025; 1/3 on May 29, 2026 | May 29, 2030 | 71,128 |
| May 23, 2023 | 150,000 | 0.63 | 1/3 on grant; 1/3 on May 23, 2024; 1/3 on May 23, 2025 | May 23, 2029 | 47,075 |
- Outstanding CEO option tranches at 12/31/2024 included grants spanning 2017–2024 with specific exercisable/unexercisable splits and expiries (e.g., 250,000 @ C$1.35 expiring Feb 1, 2025; 50,000 unexercisable @ C$0.63 expiring May 23, 2029; 100,000 unexercisable @ C$0.94 expiring May 29, 2030) .
Equity Awards – Director DSUs (affecting CEO as a director)
| Grant Date | Instrument | # Units | Vesting | Settlement |
|---|---|---|---|---|
| May 29, 2024 | DSUs | 88,298 per director; Hanneman fair value $60,582 | Vests on grant | Shares deliverable only upon ceasing board service |
| May 23, 2023 | DSUs | 131,746 to Hanneman; fair value $61,461 | Vests on grant | Shares deliverable only upon ceasing board service |
Incentive Plan Structure and Metrics
| Incentive Type | Metric(s) | Weighting | Target | Actual/Payout | Notes |
|---|---|---|---|---|---|
| Annual Cash Bonus | Discretionary; project and individual objectives; no formal plan | N/A | N/A | None disclosed for 2022–2024 | Informal approach given optimization/permitting focus . |
| Stock Options | Share price / service-based vesting | N/A | N/A | Time-vested per grants above | Aligns with long-term shareholder value; rolling plan up to 10% OS . |
| DSUs (Director) | Share price / service (director) | N/A | N/A | Vests on grant; settled upon board departure | Provides alignment; defers issuance . |
Equity Ownership & Alignment
Beneficial Ownership (CEO)
| As of | Common Shares Owned | Equity Awards Exercisable/Vesting ≤60 Days | Vested DSUs | Total Beneficial Ownership | % of Shares Outstanding |
|---|---|---|---|---|---|
| Apr 16, 2025 | 212,000 | 900,000 | 662,704 | 1,774,704 | <1% |
| Apr 11, 2024 | 212,000 | 1,000,000 | 574,406 | 1,786,406 | <1% |
- Anti-hedging/pledging: As of 2025, THM’s Share Trading Policy prohibits short sales, hedging, derivatives, margin accounts and pledging of company shares by directors/officers/employees . In 2024, the company disclosed it did not have an anti-hedging/pledging policy in place at that time .
- No related-party transactions reported for 2023–2024; no indebtedness to the company reported .
Outstanding CEO Equity Awards (12/31/2024 snapshot)
| Grant | Exercisable | Unexercisable | Exercise (C$) | Grant Date | Expiration |
|---|---|---|---|---|---|
| Options (2017) | 250,000 | — | 1.35 | Oct 23, 2017 | Feb 1, 2025 |
| Options (2019) | 150,000 | — | 0.85 | Aug 8, 2019 | Aug 8, 2025 |
| Options (2020) | 150,000 | — | 0.92 | May 27, 2020 | May 27, 2026 |
| Options (2021) | 150,000 | — | 1.31 | May 25, 2021 | May 25, 2027 |
| Options (2022) | 100,000 | 50,000 | 0.92 | May 24, 2022 | May 24, 2028 |
| Options (2023) | 50,000 | 100,000 | 0.63 | May 23, 2023 | May 23, 2029 |
| Options (2024) | 150,000 | — | 0.94 | May 29, 2024 | May 29, 2030 |
Employment Terms
| Item | CEO Term |
|---|---|
| Employment Agreement | Indefinite, at-will (effective Mar 12, 2018) . |
| Base Salary | $150,000 initially (2018 reduction); adjusted at Compensation Committee discretion (2024 reported $166,100 salary paid) . |
| Target Bonus | 100% of base salary . |
| Severance (No Cause) | Cash severance equal to annual base salary plus portion of annual bonus earned . |
| Change of Control (Double Trigger) | Upon termination after a Change of Control: base salary + target bonus; immediate vesting of unvested options; 12 months medical benefits . |
| Estimated CO Payout (12/31/2024) | Salary $170,000; Bonus $170,000; All other comp est. $58,000; Total $398,000 . |
| Covenants | Customary confidentiality and non‑competition provisions . |
Board Governance
- Role/Status: CEO and director (non‑independent); Chair and CEO roles are separate; Marcelo Kim (independent per board’s determination) is Chair; Thomas Weng serves as Lead Independent Director .
- Committees: Member, Technical Committee .
- Attendance: 100% Board meeting attendance in FY2024 (6 of 6); committee attendance tracked as applicable .
- Independence: Board determined all directors other than Hanneman are independent under NYSE American and Canadian guidelines .
- Compensation Committee: All‑independent members (Chair: Edel Tully) with authority and disclosure of no independent advisor retained in FY2024 .
Performance & Track Record
TSR and Financial Context
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Value of $100 Investment (TSR basis) | $58.90 | $80.82 | $63.01 |
| Net Loss (USD, thousands) | $3,042 | $3,398 | $3,599 |
- Management commentary notes project-stage priorities: optimization, cost reduction opportunities, and technical report updates for Livengood (updated S‑K 1300 TRS in Oct 2023), acknowledging that optimization benefits may not translate directly to share price given gold price sensitivity .
- Legal/controversy note: As a director of Gatos Silver (now former), Hanneman was associated with a period where Gatos faced MCTOs due to reserve restatement impacts; MCTOs were fully revoked July 4, 2023 .
Director Compensation (as it pertains to Hanneman’s board role)
| Year | Cash Fees ($) | DSU Grant (#) | DSU Grant Fair Value ($) |
|---|---|---|---|
| 2024 | — (management director compensated via DSUs) | 88,298 | 60,582 |
| 2023 | — | 131,746 | 61,461 |
- DSUs vest on grant, but underlying shares are only issued upon cessation of board service .
Compensation Structure Analysis
- Increased equity emphasis and reduced cash: CEO salary was cut 50% in 2018 and remains modest; equity (options) continues to be the main at‑risk component; director compensation for non‑Paulson directors paid in DSUs, aligning board with long-term value .
- No formal annual bonus plan: The Compensation Committee adopted an informal approach to cash incentives appropriate for a pre‑production developer; no bonuses disclosed for 2022–2024 .
- Equity plan discipline: No option repricings disclosed; equity plan capped at 10% of outstanding shares; burn rates for options and DSUs remain low (2024: 0.12% and 0.22% respectively) .
- Governance tightening on trading: Explicit prohibitions on hedging/pledging/margin accounts implemented by 2025, improving alignment and reducing collateral‑driven selling risks compared to 2024 disclosure .
Risk Indicators & Red Flags
- Hedging/pledging risk mitigated in 2025 policy (previously no such policy disclosed in 2024) .
- Related-party transactions: None reportable in 2023–2024 .
- Legal proceedings: No personal legal proceedings disclosed for Hanneman; note Gatos Silver MCTOs context during his directorship, revoked July 2023 .
- Ownership concentration: Paulson & Co. holds ~33.8% of THM as of Apr 16, 2025; governance includes Lead Independent Director to balance Chair relationship .
Compensation Committee & Peer/Benchmarking
- Committee composition: All independent; no independent compensation advisor engaged in FY2024 .
- Peer group/percentile targets: Not disclosed; committee relies on experience, market conditions, and internal assessments for determining compensation .
Equity Plan Capacity
| As of | Options Outstanding | DSUs Outstanding | Remaining Available (All Plans) |
|---|---|---|---|
| Dec 31, 2024 | 4,152,232 (≈2.08% OS) | 3,144,102 (≈1.57% OS) | 12,673,010 (≈6.35% OS) |
Investment Implications
- Alignment and overhang: Hanneman’s direct ownership is modest (<1%), but ongoing option grants and DSU deferral (settled only upon board exit) align longer-term incentives while limiting near-term issuance pressure from DSUs .
- Cash vs equity: Compressed CEO salary and absence of cash bonuses concentrate incentives in equity sensitivity; this lever is more likely to drive behavior toward milestones that re-rate Livengood or improve funding optionality .
- Governance trajectory: Strengthened anti‑hedging/pledging policy reduces downside-alignment risks; separation of Chair/CEO with a Lead Independent Director helps mitigate dual‑role conflicts (CEO+Director) .
- Retention/transition: Employment is at‑will with one year cash severance; change‑of‑control economics are moderate (base + target bonus + option acceleration + benefits), implying manageable transaction costs if strategic alternatives emerge .
- Trading signals: Option vesting schedules and expirations can create episodic exercise windows; DSUs are not deliverable while he serves, limiting DSU‑driven selling; any insider activity should be monitored via Forms 4 around major milestones .
Appendices
Pay vs Performance and TSR Context (Company-Disclosed)
| Year | CEO SCT Total ($) | CEO “Compensation Actually Paid” ($) | TSR Value of $100 | Net Loss ($000s) |
|---|---|---|---|---|
| 2024 | 302,793 | 181,332 | 63.01 | 3,599 |
| 2023 | 274,067 | 177,331 | 80.82 | 3,398 |
| 2022 | 293,117 | 85,874 | 58.90 | 3,042 |