Executive compensation disclosure requirements in Canada are
changing for financial years ending on or after December 31, 2008.
Amendments to the disclosure requirements are aimed at improving
transparency surrounding executive compensation.
Issuers should be aware of the following significant
Compensation Discussion and Analysis.
Executive compensation disclosure must now include a compensation
discussion and analysis section (to replace the former Report on
Executive Compensation section for TSX issuers) which explains the
rationale for specific compensation programs for executives.
Issuers must describe and explain the significant elements of
compensation for their named executive officers. Elements of
the objectives of any compensation programs;
what the program is designed to reward;
each element of compensation and why the issuer has chosen to
pay each element;
how the issuer determines the amount for each element; and
how each element fits into the overall compensation
Total Dollar Value of Compensation.
The summary compensation table must now include a column showing
the total dollar value of compensation for each named executive
Named Executive Officers. Named
executive officers continue to include each CEO, CFO and the three
most highly compensated executive officers other than the CEO and
the CFO whose total compensation, excluding pensions (no longer
simply salary and bonus) exceeds $150,000.
Compensation Cost for Equity Awards.
All equity compensation (i.e. grants of options or restricted share
rights) in the summary compensation table must now be based on
grant date fair value rather than simply stating the number of
Enhanced Change of Control and Retirement Benefits
Disclosure. More specific disclosure of potential
payments to named executive officers upon termination or retirement
must now be included. Issuers will be required to quantify such
payments on the assumption that the triggering event occurred at
the end of the most recently completed financial year.
Expanded Director Compensation
Disclosure. A summary table (including equity
disclosure) similar to the summary compensation table required for
named executive officers must now be included for directors.
However, such disclosure for directors is only required for one
year as compared to three years for named executive officers.
Venture Issuers. Venture issuers will
now be subject to the same executive compensation disclosure
requirements as TSX issuers (other than the requirement to provide
performance graphs). Previously, venture issuers were exempt from
certain compensation disclosure requirements.
Transition. The new executive
compensation disclosure requirements will only apply in respect of
financial years ending on or after December 31, 2008. Accordingly,
executive compensation disclosure that has been disclosed for prior
financial years is not required to be restated.
In preparing for the 2009 proxy season, issuers should:
review the new requirements with the compensation committee
and/or board of directors to ensure they have an understanding of
the new requirements;
review existing executive compensation disclosure practices and
consider what modifications need to be made to comply with the new
allow for additional time to prepare executive compensation
disclosure to permit thorough review and input from the
compensation committee and/or board of directors as well as outside
In Ontario Securities Commission v. Tiffin, the Ontario Court of Justice clarified the limits of the definition of "securities" under s.1(1) of the Securities Act, as it relates to promissory notes. The defendant in the case was charged with trading in securities without being registered and while prohibited, and without filing a prospectus.
The OSC has issued a press release advising stakeholders that Ontario securities law may apply to any use of distributed ledger technologies, such as blockchain, as part of financial products or service offerings.
The use of electronic signatures is becoming increasingly commonplace in commercial transactions, as individuals and businesses capitalize on the administrative efficiency afforded by today’s digital world.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).