• Crown corporation with annual revenues of $300M+

  • Significant trade enabler and economic driver for the Canadian economy

  • Various active stakeholders represented on the board with competing agendas

The Issues

  • The HR Committee was struggling to balance the organization’s social and commercial agendas

  • The pay philosophy was not reflective of the complexity of the organization and executive roles

  • The HR Committee noted a disconnect between pay and performance – particularly for executives

Our Mandate

Revisit the pay philosophy

  • Conducted interviews to articulate and document various Board members’ visions of the organization
  • Supported the Board to align on a common vision and market positioning – i.e. devised a pay philosophy within a spectrum that ranged from “Branch of Government” to “Commercial Organization”
  • Conducted a full diagnostic of the current pay program, peer practices and regulatory environment to determine “what to fix”
    • Included overview of peer practices, pay levels and structure, performance sector, performance assessment process and scorecards
  • Determined and documented the revised pay philosophy – key success factors included:
    • Increased pay and performance linkage – through compensation mix (i.e. more “at risk”) and better performance metrics
    • Targets that were more difficult to achieve
    • Clear guidelines for long-term performance

Determine pay peer group and benchmarking approach

  • Using a consensus-based approach, worked to define the peer group selection approach – while maintaining a balance between public and private sector peers
    • Public sector: Selected the most relevant 17 public sector organization based on the refreshed pay philosophy
    • Private sectors: Filter through 120+ publicly traded organizations to identify the most relevant 14 organizations, including:
      • Similar international organization (based in UK, US, Australia)
      • Similar sized organizations (based on top and bottom line)
      • Canadian organization with similar operations or participating in the supply chain
  • Captured benchmarking data and illustrated current positioning and “market-pay gaps” by roles
    • Sourced private the best available survey data and integrated the data to the other benchmarking data to complement some executive roles

Design new compensation framework

  • Redesigned the short-term incentive program, including:
    • Review of the corporate scorecard
    • Inclusion and definition of individual performance
  • Designed a new long-term incentive program and supported the HR Committee in the selection of the best long -term performance measures, aligning with their corporate strategy rework.
  • Modelled the executive compensation outcomes under diverse performance scenarios
  • Supported the Committee in determining the best transition strategy
  • Reviewed and drafted compensation disclosure

Review and draft executive contracts term sheets and benefits transition

  • Reviewed and commented on executive employment agreements and legacy incentive programs
  • Prepared individual executive term sheets and incentive programs term sheets
  • Bridged external experts (actuaries) with the Committee and initiated creative solutions specific complex cases of benefits transition
  • Reviewed and drafted compensation disclosure