Former endeavour mining boss dismissed, forfeits pay: an employment law perspective

The decision by one of the world’s largest gold mining companies to deprive its former president and chief executive of $29.1m of remuneration is one with significant employment law implications. Endeavour Mining announced that it would strip its former boss Sébastien De Montessus of the substantial sum after he was sacked for alleged “serious misconduct”. His departure, with “immediate effect”, was revealed by the company in early February.

Though De Montessus accepts failure in relation to part of the reason behind his dismissal, he disputes the misconduct charge. Should his version of events prove to be correct, Endeavour’s snap decision might prove to be extremely costly for the company too.

In a statement which provided further details, the FTSE 100 gold producer said that De Montessus will forfeit $17.6m, based on his $2m annual bonus for 2023 and unvested share awards worth $15.6m.

The firm also informed the stock market that it intends to “claw back in full” a $10m one-off award granted in 2021 and a $1.5m cash portion of the bonus received for 2022. For De Montessus, who was the highest paid FTSE 100 chief executive in 2021, this means he will receive no salary, pension, benefits, bonus or share awards for the 2023 and 2024 financial years.

Shortly after the news emerged, provoking widespread press coverage, Endeavour’s share price dropped by 12 per cent, the largest stock decline on the FTSE that day. At the centre of Endeavour’s action is an irregular payment of $5.9m said to relate to the sale of the Agbaou gold mine in Ivory Coast to Allied Gold, a Canadian rival, in 2021, which De Montessus admitted to making.

He has said that the payment was made in 2021 and related to a creditor of Endeavour to “offset” an amount owed to the company to “pay for essential security equipment to protect our partners and employees in a conflict zone”. Yet while the French executive, previously a mergers and acquisitions banker at Morgan Stanley, admits to a “lapse in judgment”, he strongly disputes that he benefited personally in any way from the deal.

Responding to Endeavour’s announcement, De Montessus said: “I am disappointed with the way this matter has been handled and that I have not been given an opportunity to makeproper representations to either the board or the remuneration committee.” This, however, is only part of the reason for the highly publicised dismissal of such a well-known figure within the gold mining industry.

The company said it was also investigating whistleblower allegations made against De Montessus “relating to his personal conduct with colleagues”. According to him though, these claims against him were completely unfounded and should not have been made public by the company.

De Montessus stated that an independent investigation carried out by Linklaters did not uphold any of the personal conduct allegations. He commented that inclusion of that information in the stock market statement was “misleading”, adding that the “legal position is now being assessed”.