Canada: Amendments To Executive Compensation Disclosure Requirements

The Canadian Securities Administrators (the "CSA") are adopting amendments to Form 51-102F6 Statement of Executive Compensation ("Form 51-102F6") which will come into force on October 31, 2011 and will apply in respect of financial years ending on or after October 31, 2011. The amendments range from drafting changes to clarify existing disclosure requirements to new substantive requirements, particularly in the Compensation Discussion and Analysis ("CD&A") section of Form 51-102F6.


The amendments arise as a result of the CSA's targeted compliance review of executive compensation disclosure following the adoption of the new Form 51-102F6 effective December 31, 2008. The results of that review were reported by the CSA in November 2009. In addition, there have been a number of international developments in the area of executive compensation, namely the U.S. Securities and Exchange Commission's adoption of rules amending compensation and corporate governance disclosure requirements for U.S. companies for the 2010 proxy season and the United States Congress' passing of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which came in force for the 2011 proxy season.

Summary of Key Amendments

Key amendments to Form 51-102F6 include the following:

Definition of  Named Executive Officer Clarified

  • The definition has been clarified to include the three most highly compensated executive officers (in addition to the CEO and CFO) of the company, including any of its subsidiaries.

Scope of Compensation to be Disclosed Clarified

  • The scope of the compensation to be disclosed has been clarified to include all plan and non-plan compensation, direct and indirect pay, remuneration, economic or financial award, reward, benefit, gift or perquisite paid, payable, awarded, granted, given, or otherwise provided to the named executive officer or director for services provided and for services to be provided, directly or indirectly, to the company or a subsidiary of the company.

New Plain Language Explanation

  • The CSA have clarified that the disclosure must provide a reasonable person, applying reasonable effort, with an understanding of how decisions about named executive officer and director compensation are made and how specific named executive officer and director compensation relates to the overall stewardship and governance of the company.

CD&A – Changes to Disclosure relating to Performance Goals

  • The exemption from the requirement to disclose performance goals or similar conditions has been clarified to provide that a company's interests are not considered to be seriously prejudiced solely by disclosing performance goals or similar conditions if those goals or conditions are based on broad corporate-level financial performance metrics which include earnings per share, revenue growth, and earnings before interest, taxes, depreciation and amortization. Moreover, the exemption does not apply if the company has publicly disclosed the performance goals or similar conditions. If a company relies on this exemption, it has to state so and explain why disclosing the performance goals or similar conditions would seriously prejudice the company's interests.
  • Companies are required to disclose whether the board of directors can exercise discretion, either to award compensation absent attainment of the relevant performance goal or similar condition or to reduce or increase the size of any award or payout. Companies must also disclose if they exercised such discretion and whether it applied to one or more named executive officers.

CD&A – New Disclosure regarding Risks

  • Companies are required to disclose whether or not the board of directors, or a committee of the board, considered the implications of the risks associated with the company's compensation policies and practices and if so, disclose:
    • the extent and nature of the board of directors' or committee's role in the risk oversight of the company's compensation policies and practices;
    • any practices the company uses to identify and mitigate compensation policies and practices that could encourage a named executive officer or individual at a principal business unit or division to take inappropriate or excessive risks; and
    • any identified risks arising from the company's compensation policies and practices that are reasonably likely to have a material adverse effect on the company.
  • The CSA has provided a non-exhaustive list of examples of situations that could potentially encourage an executive officer to expose the company to inappropriate or excessive risks, including:
    • compensation policies and practices at a principal business unit of the company or a subsidiary of the company that are structured significantly differently than others within the company;
    • compensation policies and practices for certain executive officers that are structured significantly differently than other executive officers within the company;
    • compensation policies and practices that do not include effective risk management and regulatory compliance as part of the performance metrics used in determining compensation;
    • compensation policies and practices where the compensation expense to executive officers is a significant percentage of the company's revenue;
    • compensation policies and practices that vary significantly from the overall compensation structure of the company;
    • compensation policies and practices where incentive plan awards are awarded upon accomplishment of a task while the risk to the company from that task extends over a significantly longer period of time;
    • compensation policies and practices that contain performance goals or similar conditions that are heavily weighed to short-term rather than long-term objectives; and
    • incentive plan awards that do not provide a maximum benefit or payout limit to executive officers.

CD&A – New Disclosure regarding Financial Instruments

  • Companies are required to disclose whether or not a named executive officer or director is permitted to purchase financial instruments, including prepaid variable forward contracts, equity swaps, collars, or units of exchange funds, that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by the named executive officer or director.

CD&A – Disclosure relating to Benchmarking

  • If the company used any benchmarking in determining compensation or any element of compensation, the benchmark group must be disclosed and the company must describe why the benchmark group and selection criteria are considered by the company to be relevant.

CD&A – Disclosure of Changes in the Next Financial Year

  • Companies are required to disclose whether the company will be making any significant changes to its compensation policies and practices in the next financial year.

CD&A – Discussion of Process for Granting Share-Based Awards

  • Companies are required to describe the process the company uses to grant both option-based and share-based awards to executive officers.

CD&A – New Compensation Governance Disclosure

  • Companies are required to describe any policies and practices adopted by the board of directors to determine the compensation for the company's directors and executive officers.
  • If the company has established a compensation committee, it must describe/disclose:
    • the name of each committee member and whether or not each member is independent or not independent;
    • whether or not one or more of the committee members has any direct experience that is relevant to his or her responsibilities in executive compensation;
    • the skills and experience that enable the committee to make decisions on the suitability of the company's compensation policies and practices; and
    • the responsibilities, powers and operation of the committee.
  • If a compensation consultant or advisor has, at any time since the company's most recently completed financial year, been retained to assist the board of directors or the compensation committee in determining compensation for any of the company's directors or executive officers, the company must describe/disclose:
    • the name of the consultant or advisor and a summary of the mandate the consultant or advisor has been given;
    • when the consultant or advisor was originally retained;
    • any services to the company, or to its affiliated or subsidiary entities, or to any of its directors or members of management, if provided by the consultant or advisor (other than or in addition to compensation services provided for any of the company's directors or executive officers), with a brief description of the work; and
    • whether the board of directors or compensation committee must pre-approve other services the consultant or advisor, or any of its affiliates, provides to the company at the request of management.
  • For each of the two most recently completed financial years, companies must disclose:
    • under the caption "Executive Compensation-Related Fees", the aggregate fees billed by each consultant or advisor, or any of its affiliates, for services related to determining compensation for any of the company's directors and executive officers; and
    • under the caption "All Other Fees", the aggregate fees billed for all other services provided by each consultant or advisor, or any of its affiliates and include a description of the nature of the services comprising the fees disclosed under this category.

Changes to Tables

  • Tables and columns can continue to be added to the disclosure generally, however, to a reasonable person, a table, column or other information cannot detract from the information required for the Summary Compensation Table and, in particular, columns cannot be added to the Summary Compensation Table.
  • The "All Other Compensation" column in the Summary Compensation Table must include any company contribution to a personal savings plan like a registered retirement savings plan made on behalf of the named executive officer.
  • The Outstanding Share-Based Awards and Option-Based Awards Table has an additional column in which companies must disclose the aggregate market value or payout value of vested share-based awards that have not yet been paid out or distributed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
8 Nov 2016, Seminar, Ottawa, Canada

The prospect of an internal investigation raises many thorny issues. This presentation will canvass some of the potential triggering events, and discuss how to structure an investigation, retain forensic assistance and manage the inevitable ethical issues that will arise.

22 Nov 2016, Seminar, Ottawa, Canada

From the boardroom to the shop floor, effective organizations recognize the value of having a diverse workplace. This presentation will explore effective strategies to promote diversity, defeat bias and encourage a broader community outlook.

7 Dec 2016, Seminar, Ottawa, Canada

Staying local but going global presents its challenges. Gowling WLG lawyers offer an international roundtable on doing business in the U.K., France, Germany, China and Russia. This three-hour session will videoconference in lawyers from around the world to discuss business and intellectual property hurdles.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
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).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.