Based on nearly 80% of Say on Pay votes at S&P/TSX Composite companies (through June 2), results indicate sustained high shareholder support, with average approval levels in line with prior years. Notable highlights include:
- The average level of support is 93%, similar to last year
- 84% have received at least 90% support, the highest percentage in the past 5 years (based on interim tracking)
- ISS recommended “AGAINST” Say on Pay at six companies
- Five of these have passed or not yet held their annual meeting – Aya Gold & Silver (TBD), Colliers International Group (65%), GFL Environmental (67%), NovaGold Resources (71%) and Shopify (TBD)
- First Majestic Silver (41%) is the only company receiving a negative ISS recommendation which has failed Say on Pay
Common Themes in ISS Recommendations Against Say on Pay
All six companies that received an ISS recommendation against Say on Pay had a “pay for performance misalignment” and scored a high concern on the quantitative pay for performance test. Additionally, all but Aya Gold & Silver and Colliers International also received a negative ISS recommendation last year, with ISS generally noting a sustained “pay for performance misalignment” over multiple years.
Other common factors that contributed to an ISS recommendation against Say on Pay included:
- Lack of long-term performance-based equity compensation
- Insufficient board responsiveness to low Say on Pay support
- Internal pay disparity
- Single-trigger change-in-control agreement
- Large change-in-control severance multiplier
- Outsized equity awards
In general, vote recommendations were not driven by a single “egregious” pay practice but rather a combination of different factors together.
* * * * *
This Client Update prepared by Meridian Compensation Partners, LLC provides general information for reference purposes only and should not be construed as legal or accounting advice or a legal or accounting opinion on any specific fact or circumstances. The information provided herein should be reviewed with appropriate advisors concerning your own situation and issues.
Questions regarding this Client Update or executive compensation technical issues may be directed to:
Christina Medland at (416) 566-1919 or cmedland@meridiancp.com
Andrew McElheran at (647) 472-7955 or amcelheran@meridiancp.com
Matt Seto at (647) 472-0795 or mseto@meridiancp.com
Andrew Stancel at (647) 382-7684 or astancel@meridiancp.com
Andrew Conradi at (647) 472-5231 or aconradi@meridiancp.com
Rachael Lee at (647) 975-8887 or rlee@meridiancp.com
Kaylie Folias at (416) 891-8951 or kfolias@meridiancp.com
Krunal Billimoria at (647) 267-5869 or kbillimoria@meridiancp.com
Jason Chi at (647) 248-1029 or jchi@meridiancp.com
Wali Ahmed at (647) 208-0132 or wahmed@meridiancp.com
Gabrielle Milette at (905) 242-0503 or gmilette@meridiancp.com
Steve Li at (437)451-2710 or sli@meridiancp.com
Paakavy Senthamilarasan at (647) 926-5641 or psenthamilarasan@meridiancp.com