As Boards of Directors increase focus on the material ESG issues for their organizations, one visible outcome has been the inclusion of diversity goals and objectives into executive incentive programs. While absolute targets can be responsive to the circumstances of the organization as well as the sector in which it operates, it can also be helpful to understand where the organization stands relative to its peers and sector. The Globe and Mail recently published its findings on the proportion of women in leadership positions among the 500 largest companies on the TSX. Specifically, it highlighted the 74 companies where women made up >30% of executive roles; among the companies analyzed, the average proportion of women on executive teams was 46%. This report provides additional data analysis.
Institutional Shareholders Services (“ISS”) and Glass Lewis have updated their 2022 voting guidelines for Canadian and US issuers. The updated guidelines from ISS will apply to shareholder meetings for publicly traded companies on or after February 1, 2022, while those from Glass Lewis will apply to meetings held on or after January 1, 2022. This briefing provides a summary of updates on compensation-related and select governance-related topics for the Canadian market.
For the 3rd instalment in our COVID-19 Pulse Survey series, our Fall 2021 Director Pulse Survey provides insights into how Canadian directors are seeing 2021 pay and performance decision-making, 2022 priorities, and related compensation governance trends. Torys LLP has also provided their insightful perspective and commentary.
Hugessen keeps an eye on shareholders’ sentiment and growing trends, especially as it relates to executive compensation. Shareholder proposals are a good indicator of growing trends and interest amongst the community. Again, this year, among the TSX60, we witnessed an increasing number of ESG-related shareholder proposals.
Environmental Measures in Executive Compensation in Canada’s Extractive Industry: 3 Target-Setting Approaches
Many of Canada’s largest extractive companies have set ambitious environmental goals with long-term horizons (e.g., 2040 or 2050 net zero goals). One tangible way for companies to incentivize progress and demonstrate commitment to their environmental goals is by tying executive pay to specific climate metrics.
This article provides case studies of how 3 organizations that have each made 2050 net zero commitments incorporate environmental measures into their incentive programs using various target-setting approaches.
The 2021 proxy season took place in context of an unprecedented pandemic and offered shareholders a unique opportunity to express their views on executive compensation decisions. Hugessen’s latest article highlights the trends in Canadian Say-on-Pay results in 2021, and explores the historical correlation between company performance and Say-on-Pay support.
Every year, Hugessen Consulting conducts a review of the proxy circulars filed by the constituents of the S&P / TSX60 Index to report on trends in executive compensation and related governance practices among Canada’s largest and most influential companies.
This year, we expanded our focus on TSX60 issuers’ use of environmental, social and governance (“ESG”) metrics in executive compensation. This article provides a summary of our findings.
On September 28th, Partner Michelle Tan presented at The Conference Board's 27th Annual Executive Compensation Conference. The session explores the challenges and impact of addressing broader stakeholder interests in incentive programs - from strategy through implementation. You can watch the presentation here.
Climate Commitments: Key Learnings from the 2021 Proxy Season and Implications for Canadian Companies
The 2021 proxy season made it apparent that the “Environmental” pillar of ESG continues to be top of mind for stakeholders. In particular, the laser-like focus on climate change is targeting companies from multiple angles. This piece provides an overview of recent shareholder pressures on emissions targets in the energy sector, including highlights from the 2021 US proxy season and the implications for Canadian companies and smaller producers.
The changes to stock option taxation mark an opportune time for companies to reassess and, if necessary, revise their long-term incentive plan (LTIP) strategy and design. In March, Hugessen provided an overview of the tax changes – please see Part One for a detailed overview of the upcoming changes. This was followed by a briefing outlining approaches to reassessing long-term incentive design – please see Part Two of our series. This “Part Three” briefing looks beyond the mainstream LTIP alternatives and focuses on real long-term equity and ownership approaches. Much of the material in this briefing was covered in a paper produced for a conference hosted by Caisse de dépôt et placement du Québec in October 2015 – please see Rethinking Long Term Incentives and Ownership Guidelines.