Shareholder Perspectives: Board Process for Setting and Evaluating Pay

In light of recent public scandals tied to executive compensation, Hugessen reached out to the shareholder community to discuss their expectations of directors when setting and evaluating performance-based pay decisions. Hugessen initiated conversations with select Canadian and U.S. institutional shareholders, including both pension funds and asset managers with assets under management aggregating CAD$4T.

To guide the discussions, Hugessen asked shareholders what questions directors should ask themselves when:
1) Determining performance metrics, and
2) Adjudicating performance outcomes for determining pay decisions in respect of the prior year.

All of the shareholders we reached out to are engaging with boards on these (and other) matters.

Fall 2016 Director Opinion Survey: Taking the Pulse of Canadian Directors

John Skinner, Erin Poeta  | December 2016
As boards face increasing scrutiny from investors, regulators and other stakeholders, director priorities and board practices are forced to adapt accordingly. Tracking prevailing views on boardroom issues provides valuable insights going into year-end decision-making. For example, directors recognize that issues like IT risk mitigation and talent management require increased focus. Meanwhile, executive compensation and shareholder engagement continue to play a fundamental role in how companies execute and communicate their strategies. In an effort to keep an ear to the ground in the director community, we created a survey to gauge directors’ opinions on hotbutton issues and their companies’ practices over the past year.

ISS & Glass Lewis Release 2017 Proxy Guideline Updates (CND & US)

Michelle Tan, Erin Poeta  | December 2016
Institutional Shareholders Services (“ISS”) and Glass Lewis (“GL”) recently released updates to their 2017 voting guidelines for Canada and the U.S. The updated guidelines from ISS will apply to shareholder meetings for publicly-traded companies on or after February 1, 2017, while the ones from Glass Lewis will apply to meetings held on or after January 1, 2017. This memo provides a summary of policy updates on compensation-related and board-related topics in each of the two countries.

Defusing Share Buyback Anxiety

Ken Hugessen, Michelle Tan, John Skinner  | October 2016
The significant increase in share buyback activity in the U.S. (US$166 billion in the first quarter of 2016 alone), and well-publicized debates on their utility, has put capital allocation programs and their relationship with compensation program into the spotlight. When buyback programs are contemplated, there are ways to ensure
that shareholders understand the board’s process and perspective.

Straight from the Source: A Day of Discussion

Hugessen & Hall  | October 2016
On September 27, 2016, Hugessen Consulting and Steven Hall & Partners hosted a Director-Shareholder Roundtable in Chicago, bringing together experienced corporate directors and representatives from institutional shareholders for a day of unfiltered discussion on a variety of executive compensation and governance topics.

Snapshot of TSX Small and Mid-Cap Long-Term Incentive Plan (LTIP) Practices

Camille Jovanovic  | September 2016
The approach to long-term incentives among small- and mid-cap TSX companies tends to vary, in some cases quite significantly, from those of large-cap issuers.

Setting Pay Through Strategic Transitions

Establishing performance standards and setting and managing executive pay is never easy. But what happens in a period of structural change? How do boards measure a moving target?

Unplugged: Institutional Shareholders on Executive Compensation

Michelle Tan, Steve Chan , Sandra Pace  | July 2016
The role and influence of the shareholder community has been steadily evolving in the areas of governance and executive compensation and assessment of corporate performance. To gather some insight on a wide range of compensation and governance-related topics, Steve Chan, Michelle Tan and Sandra Pace turned to two governance leaders at prominent institutional shareholders: Bess Joffe, managing director, head of corporate governance at TIAA-CREF and Drew Hambly, executive director, corporate governance at Morgan Stanley Investment Management, Global Equity Group.

News Flash: Investors Respond to Proposed U.S. Regulation of Proxy Advisors

Hugessen  | June 2016
The Council of Institutional Investors, an association of U.S. and global investors representing over US$3 trillion in assets, published a letter responding to proposed regulation of proxy advisors in the U.S.

Straight From the Source: Highlights from Calgary Director-Shareholder Roundtable

Hugessen  | June 2016
On June 1, 2016, Hugessen Consulting hosted a Director-Shareholder Roundtable in Calgary, Alberta. This session brought together experienced corporate directors and representatives from large CND and US institutional shareholders for a day of interactive dialogue on board leadership on compensation and related governance.

The discussions that took place were open and engaging, with participants freely sharing their views and experiences on a wide range of compensation and governance matters.