NovaGold Says ISS Is Wrong On Its Equity Plans, Citing A 0.41% Burn Rate Against A 1.51% Benchmark
The board says the proxy adviser's dilution model assumes every evergreen share is issued, ahead of a November 3 shareholder vote.
NovaGold's board is fighting back against proxy adviser ISS, which recommends that shareholders vote against two new stock plans tied to the company's all-share buyout of the rest of Donlin Gold. Compensation committee chair Kalidas V. Madhavpeddi told holders in a letter that the adviser's model assumes every possible future share is issued.
Where ISS and the board split
NovaGold, a gold company focused mainly on advancing the Donlin Gold project in Alaska, sent the letter to select shareholders on Tuesday, ahead of a special meeting on November 3. It does not produce gold.
ISS backs the transactions, including the arrangement resolution, citing their sound strategic rationale and expected per-share accretion. It also supports the compensation resolution, the non-qualified employee share purchase plan and one other resolution. It opposes Resolution 2, the 2026 Omnibus Incentive Plan, and Resolution 3, the new employee stock purchase plan.
The board says ISS's case rests "almost entirely" on a "mechanically applied, hypothetical dilution model." It also notes that ISS supports the separate non-qualified plan, which buys shares on the open market instead of issuing new ones.
Caps, burn rate and voluntary cuts
The contested feature is the evergreen provision, which lets each plan's share reserve grow annually. Under Resolution 2, the yearly increase is capped at the lesser of 3% of shares outstanding at the end of the prior year or a lower amount the committee sets, including zero. Resolution 3 caps it at 1%. Neither plan permits increases after ten years.
The letter says the company's three-year average value-adjusted burn rate, covering 2023, 2024 and 2025, was 0.41%. It compares that with an ISS benchmark of 1.51%, a GISC median of 0.56% and a GISC average of 0.72%. In May, the company voluntarily cut the caps on its existing plans to 7% for the Stock Award Plan and 2% for the PSU Plan.
Both new plans take effect only if the transactions close. They replace the existing option, PSU and DSU plans, and outstanding awards would be assumed by the new parent, NovaGold Corporation.
The Donlin Gold stakes and the deadline
The deal would give NovaGold the remaining 40% of Donlin Gold, leaving the new U.S.-domiciled parent with 100% ownership of what the company projects to be America's largest single gold mine.
The board unanimously recommends voting for every resolution. Proxy cards are due Friday, October 30, at 10:00 a.m. Vancouver time, and the committee has offered to meet shareholders with questions.
Shareholders vote on all resolutions, including the two ISS opposes, at the November 3 special meeting.
Sources
- NovaGold Resources — DEFA14A (2026-10-27) — SEC EDGAR
