Canadian Insights

Current filters:Canadian Insights

Holding Steady with Say on Pay

While Say on Pay is voluntary in Canada, many S&P/TSX 60 companies held Say on Pay votes in 2016.

Posted by on

In contrast to the mandatory (but non-binding) advisory votes on executive compensation (“Say on Pay” votes) in the U.S., Say on Pay remains voluntary in Canada. Close to 80% of the S&P/TSX 60 companies have a Say on Pay vote…

Treasury, Cash Settled and Market Purchase Share Unit Plans

Meridian explains alternatives for settling share unit plans, as well as proposed changes to the TSX Company Manual.

Posted by on

The structure of a share unit plan and how a share unit is settled can have a significant impact on its taxation and accounting treatment. This update: Considers three alternative share unit plans that are generally used in Canada and…

Choosing the Right Performance Peer Group

Why companies are using PSU plans, and how to use them effectively.

Posted by on

More and more public companies are adopting performance share unit (PSU) plans as a significant component of long-term (equity) compensation for executives.[1] The most common PSU performance metric is total shareholder return (TSR – i.e., stock price growth plus dividends)…

Updates to ISS & Glass Lewis Compensation & Related Policies

Policy changes have implications for both equity plan voting and director over-boarding.

Posted by on

ISS has changed its methodology for assessing treasury-based incentive plans with effect in 2016. In addition, both ISS and Glass Lewis have changed their standards for director “over-boarding” with effect in 2017. Equity Plan Voting As expected, ISS is introducing…

Trends in Executive Compensation at the S&P/TSX 60

While actual senior executive pay has fallen in the past three years, actual and target pay have grown.

Posted by on

This update reviews trends in executive pay at S&P/TSX 60 companies[1]. The general trend for the last three years has been for modest growth in actual and target pay, although actual senior executive pay fell slightly from 2013 to 2014.…

Modest Year over Year Increases in Canadian Director Pay

Even with this increase, Canadian directors are still paid less than their American counterparts on average.

Posted by on

Director total compensation increased year over year, while equity held steady at just under one-half of director pay. This aligns with increases in director time commitments and expansion of the role of board members. Directors of Canadian companies continue to…

Horses for Courses

How compensation committees can choose the performance metrics that are right for their business.

Posted by and on

Incentive plans have two primary purposes: 1) To motivate behaviour and drive performance aligned with strategy and 2) To align rewards with shareholder interests. From these two simple purposes come the most difficult work of the compensation committee and an…

Canadian Companies Continue to Voluntarily Adopt Say on Pay

Canadian company participation in Say on Pay has increased almost 25 percent since 2013.

Posted by on

Although Say on Pay remains voluntary in Canada, the number of companies with an advisory resolution on executive compensation continues to rise, with 162 companies holding Say on Pay votes in 2015 – up from 156 in 2014 and 133…

Poor Pay Practices in Good and Bad Times

Regardless of the state of the economy, there are always opportunities to improve pay practices.

Posted by on

Most industries are confronted by a variety of compensation challenges, which can be exacerbated in good and bad economies. While many companies have eliminated problematic pay practices (tax gross-ups, stock option repricings, excessive perquisites, and aspirational peer groups) to respond…

Tracking Dodd-Frank

Meridian examines the progression of Dodd-Frank legislation from the Canadian perspective.

Posted by on

Although the Dodd-Frank Act rules do not apply to most Canadian companies, we watch the slow progress of the regulations with interest as many Canadian companies follow these executive compensation rules as a matter of good compensation governance. Over the…

Compensation Challenges of a Falling Canadian Dollar

With uncertainty in the worldwide economy and commodity prices, the Canadian dollar has fallen to a six-year low versus the U.S. dollar, affecting compensation programs for a large number of Canadian companies.

Posted by on

After a long period of relative stability and near parity, the Canadian dollar has fallen to about 80 cents U.S. – a six-year low. The outlook for further movement up or down, is unclear and is tied both to the…

Thinking Like an Activist—The Benefits of Looking at Executive Compensation Programs through a Critical Lens

Looking at your executive compensation program from an activist perspective will help you assess how likely it is your company will have to deal with activist investors.

Posted by on

The significant increase in shareholder activism has many companies and compensation committees playing defense. While the specter of activist interest is generally viewed with concern, looking at your executive compensation programs from the perspective of an activist investor can focus…

Measurement Challenges for Pay and Performance

As they prepare for the 2015 incentive plan cycle, committees are grappling with the challenge of choosing the right performance measures and goals for annual and long-term incentive plans.

Posted by on

In this update, we discuss five pitfalls for selecting performance measures and setting goals: Basing plan design purely on prevalent market practice Ignoring business imperatives and the cost of capital Relying solely on company history to set performance targets and…

Term Limits and Board Diversity: Developing Policies that Work

In January, 2014, the Ontario Securities Commission proposed disclosure rules that will require TSX-listed issuers in Ontario to annually disclose the combination of term limits and gender diversity

Posted by on

In January, 2014, the Ontario Securities Commission (OSC) published proposed disclosure rules that will require TSX-listed issuers in Ontario to annually disclose: Any policies they have regarding the representation of women on the board (and other details respecting women on…

Modest Rise in Director Pay Continues at Canada’s Largest Companies

Annual analysis of outside director compensation among S&P/TSX 60 index companies found that average total compensation for directors increased by +2.1% last year.

Posted by on

Meridian Compensation Partners’ annual analysis of outside director compensation among S&P/TSX 60 index companies found that average total compensation for directors increased by +2.1% last year. The proportion of total compensation delivered in equity has increased to 47%, up from…

2014 Canadian Say on Pay Results Continue to be Strong

Say on Pay is still voluntary in Canada and the uptake continues with 156 companies having Say on Pay votes in 2014, up from 133 last year.

Posted by on

Say on Pay is still voluntary in Canada and the uptake continues with 156 companies having Say on Pay votes in 2014, up from 133 last year. Among the S&P/TSX 60 index companies, 82% have adopted Say on Pay. However,…

Canadian Regulatory and Governance Update

Canadian Securities Administrators Publish “Guidance for Proxy Advisory Firms”

Posted by on

There have been a number of recent regulatory and governance changes affecting executive compensation and governance. Canadian Developments 1. Canadian Securities Administrators Publish “Guidance for Proxy Advisory Firms” On April 24th, the CSA published for comment their proposed Policy for…

Engaging Shareholders

Why, When and How to Talk to Shareholders about Executive Compensation

Posted by and on

Shareholder engagement is on the rise in Canada due in large part to: The steadily increasing voluntary adoption of say on pay in Canada—in 2013 80% of the S&P/TSX 60 companies and 130 Canadian companies had say on pay advisory…

Satisfying Your Shareholders

Understanding How Institutional Shareholder Services (ISS) Evaluates Pay for Performance

Posted by and on

For TSX Composite Index companies, ISS will recommend voting “against” say on pay, “withhold” on directors, and/or “against” an equity plan proposal if: There is significant misalignment between CEO pay and company performance, The company has problematic pay practices, or…

Holiday Highlights

10 Of the Biggest Executive Compensation Stories From 2013

Posted by and on

2013 was a busy year for executive compensation in Canada. Here are 10 highlights from this year: 1. Pay for Performance Continues to be a Primary Focus of Compensation Committees Committees are becoming more engaged in aligning pay for performance…