Frederick H. Earnest

About Frederick H. Earnest

Frederick H. Earnest is President, Chief Executive Officer, and a director of Vista Gold Corp. (VGZ). He holds a B.S. in Mining Engineering from the Colorado School of Mines (1987), is age 63, has served as President since August 2007 and CEO since January 2012, and has been a director since November 6, 2007 . Management highlights his deep technical and international operating experience and contributions to advancing Mt Todd; he is a member of the Health, Safety, Environment and Social Responsibility Committee . VGZ disclosed pay-versus-performance metrics showing negative TSR across 2022–2024, with net income turning positive in 2024; the company notes it is not a production-stage miner and has historically not used revenue as a performance measure .

Past Roles

External Roles

Fixed Compensation

Multi-year compensation (Summary Compensation Table):

Additional elements:

• 401(k) retirement savings plan match up to 4% for US employees; no pension/SERP or nonqualified deferred compensation .
• Perquisites under $10,000 for NEOs unless noted .

Performance Compensation

Compensation programs include a discretionary Short Term Incentive Program (STIP) and long-term RSUs under the LTIP; options are currently not being granted and the Board does not plan to seek option approval this year .

STIP performance framework:

• STIP evaluated on corporate liquidity, achievement of corporate goals, and individual performance; CEO bonus amount determined annually by the Board .

2024 Corporate Objectives and Weightings:

2024 Objective Scoring (CEO):

2025 Corporate Objectives Weightings:

Long-term equity awards (RSUs) granted to Earnest:

• 242,000 RSUs (2022); 387,000 RSUs (2023); 597,000 RSUs (2024) .
• 2024 vesting activity: 205,749 RSUs vested (Earnest) .

Vesting schedules (selected outstanding RSUs as of Dec 31, 2024):

Clawback policy:

• Adopted Oct 2, 2023 to comply with SEC Rule 10D-1 and NYSE American; mandatory recovery of erroneously awarded incentive compensation within prior three fiscal years if a restatement is required .

Pay versus performance context:

Equity Ownership & Alignment

Ownership and guidelines:

• Beneficially owned Common Shares: 2,150,539; 1.7% of outstanding (based on 124,455,502 shares) .
• Equity ownership policy requires CEO to hold equity equal to 3x annual base salary; Earnest required minimum holding value $1,110,000; status: Compliant as of Dec 31, 2024 .
• Ownership counting includes Common Shares, RSUs (vested/unvested), DSUs; options do not count .

Outstanding equity awards (as of Dec 31, 2024):

Hedging/pledging:

• Insider Trading Policy prohibits hedging and monetization transactions (e.g., zero-cost collars, forward sales) in Company Common Shares; certain officers/directors need preclearance for trades and are subject to blackout periods .
• Equity Ownership Policy prohibits hedging/monetization of counted securities; no explicit pledge disclosures identified in the proxy .

Potential selling pressure:

• Significant scheduled RSU vestings in March 2025 and February 2026; Earnest had 205,749 RSUs vest in 2024 . Form 4 disclosures were not found in the document set; continued monitoring of Section 16 filings is recommended (no Form 4 references in available filings).

Employment Terms

• Employment agreement dates: initial engagement effective Sept 22, 2006; new agreement Nov 1, 2012; most recent amendment May 26, 2022 .
• Base salary under amended contract: $370,000; annual discretionary incentive payments at Board’s sole discretion, conditioned on continued employment at grant and payment .
• Benefits: eligibility for senior executive benefit plans; 401(k) match up to 4%; no pension or nonqualified deferred comp .
• Change-of-control definition: loss of majority voting power, sale of substantially all assets, or change in Board majority .
• Termination benefits (continuation period or lump sum alternative):
  • Material adverse change: 24 months; total benefit amount $854,784 (Earnest) .
  • Without just cause: 24 months; total benefit amount $854,784 (Earnest) .
  • Change of control: 24 months; total benefit amount $854,784; includes STIP amounts due .
• Clawback: mandatory recovery of incentive-based compensation upon restatement for prior three years .

Board Governance

• Board service: Director since Nov 6, 2007; member of Health, Safety, Environment and Social Responsibility Committee .
• Chair structure: Non-Executive Chair (Tracy A. Stevenson) since April 2023; majority of Board to be independent at all times per Board Mandate; independent directors hold regular meetings without management .
• Implications: Earnest is a management director (non-independent) but governance mitigants include an independent Chair and independent executive sessions .

Say-On-Pay & Shareholder Feedback

• Annual advisory say-on-pay held each year; shareholders approved NEO compensation for 2023 at the April 30, 2024 meeting; Board recommends “FOR” say-on-pay at 2025 meeting .

Expertise & Qualifications

• Education: B.S. in Mining Engineering (Colorado School of Mines) .
• Experience: >35 years in mining; development, construction, operation, and turnarounds; >10 years international experience including Latin America .
• Leadership/stakeholder relations: recognized for technical, economic, social understanding of Mt Todd and relationships with government/stakeholders .

Compensation Committee Analysis

• Compensation Committee members: John M. Clark (Chair), Patrick F. Keenan, Michel Sylvestre; Committee report states CD&A was reviewed and recommended for inclusion .
• Interlocks/insider participation: none disclosed .
• Security-based compensation burn rates: RSU grants burn rate 1.4% (2024), 1.0% (2023), 0.6% (2022); no options granted in these years .
• Plan capacity: as of Mar 10, 2025, 4,763,669 shares issuable under plans outstanding; 7,681,881 shares available for future grants; options cannot be granted until shareholder approval; Board does not plan to seek approval this year .

Performance & Track Record

• Company performance context: Not production-stage; net losses in 2022–2023 and net income in 2024 .
• TSR: cumulative TSR values show negative performance across the period; Earnest’s compensation actually paid increased in 2022–2024 reflecting equity valuation adjustments .
• Strategic milestones: Feasibility study in 2025 confirmed strong economics and re-sized 15 ktpd operation; management commentary emphasizes advancing Mt Todd and shareholder value .

Equity Ownership & Vesting Details (Expanded)

Compensation Structure Analysis

• Cash vs equity mix: Annual cash bonuses paid in 2022–2024 alongside growing RSU grants (242k in 2022; 387k in 2023; 597k in 2024), indicating increased reliance on RSUs with both time- and performance-based conditions .
• Options: No options granted in 2022–2024; Board not seeking option grant approval in 2025, reflecting a shift away from options .
• At-risk vs guaranteed: Base salary modestly increased (to $358,333 actual paid in 2024 vs $350,000 in prior years), while STIP remains discretionary and linked to corporate/individual objectives .
• Clawbacks: Formal clawback policy adopted in 2023 enhances accountability on incentive compensation .
• Performance metrics: LTIP includes share price performance vesting criteria for large RSU tranches; STIP objectives emphasize shareholder returns and milestone delivery .

Risk Indicators & Red Flags

• Hedging/monetization prohibition: Policy prohibits hedging or monetizing Company stock; trades subject to blackout periods and preclearance for certain insiders .
• Pledging: No explicit pledge disclosures identified in the proxy; equity policy restricts monetization/hedging of counted holdings .
• Tax gross-ups and option repricing: No tax gross-ups disclosed; no options granted or repriced in 2022–2024 .
• Say-on-pay: Annual advisory vote with Board support; prior approval noted .
• Performance/TSR: Negative TSR during 2022–2024; net income only in 2024; alignment via RSUs whose value correlates with share price acknowledged .

Investment Implications

• Alignment: Significant RSU holdings and ownership policy compliance align Earnest with shareholders; large performance-based RSU tranches introduce valuation sensitivity to share price outcomes .
• Vesting calendar: Material RSU vesting dates (March 2025, February 2026) may create mechanical supply via net share settlement; monitor Section 16 filings for selling pressure signals .
• Retention/CIC economics: CIC and “without cause” benefits at $854,784 (24 months) suggest moderate severance protection without disclosed tax gross-ups; clawback policy supports governance discipline .
• Pay-for-performance: STIP is discretionary but structured around shareholder returns and milestone delivery; RSU performance conditions enhance long-term alignment amid non-production-stage metrics .
• Governance: Independent Chair and independent sessions mitigate dual-role concerns from CEO-director status; committee structure separates Earnest from Compensation Committee .