The views of the Canadian Coalition for Good Governance (CCGG)
on executive compensation have evolved and advanced with the
release in April 2009 of the CCGG's Shareholder Engagement
and 'Say-on-Pay' Policy and in June 2009 of the
CCGG's Executive Compensation Principles.
In the Policy, the CCGG states its belief that institutional
shareholders should have regular, constructive engagement with the
boards and board compensation committees of public companies on
governance, compensation and disclosure practices, and that
'Say-on-Pay' shareholder advisory resolutions are an
important part of this ongoing engagement process. The CCGG
recommends that all boards follow the practice of voluntarily
adding to each annual meeting agenda an advisory shareholder
resolution on the report of their human resources or similar
committee, their compensation plan, and the prior year's
awards. Further, the CCGG states that it intends to publish a model
form of board 'Say-on-Pay' policy and shareholder
resolution for boards to consider using for their next annual
The Executive Compensation Principles replace the
Good Governance Guidelines for Principled Executive
Compensation, which had been issued by the CCGG in 2005. The
Principles are intended to provide guidance to compensation
committees in developing executive remuneration packages that
create a linkage between pay and performance and directly link risk
management with the compensation program structure.
The six principles of compensation developed and enunciated by
the CCGG are as follows:
Pay for performance should be a large component of executive
Performance should be based on measurable risk adjusted
criteria, matched to the time horizon needed to ensure the criteria
have been met.
Compensation should be simplified to focus on key measures of
Executives should build equity in their company to align their
interests with shareholders.
Companies should limit pensions, benefits, and severance and
change of control entitlements.
Effective succession planning reduces paying for
McCarthy Tétrault Notes:
The thoughtful development and evolution of the Policy and the
Principles reflects a workable approach that will be helpful to
Canadian reporting issuers as they develop practices that are
suitable to their respective circumstances.
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 Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
While most are well aware that the sale of a business is generally a complex process, even sophisticated business owners are surprised by just how much cost and effort is required to complete the sale.
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).