SEC Adopts Final Rules on Disclosure of Pay vs Performance

Michelle Tan, Matthew Downie  | September 2022

On August 25, 2022, the Securities and Exchange Commission (“SEC”) adopted final rules that require companies to disclose how their executives’ pay aligned with corporate performance over the five most recent fiscal years. The disclosure must be included in 2023 proxies for companies with calendar year-ends.  We note that the new rule enhances, rather than replaces, the current pay for performance disclosure.

While the SEC rule is not applicable to the majority of Canadian firms, the need for more fulsome and enhanced disclosure on the linkage between corporate performance (beyond TSR) and pay decisions for a Company’s NEOs is not an unreasonable expectation. Key highlights of the final rule are outlined in the attached PDF.

ESG in Compensation & Takeaways from 2022 Proxy Season Part 3: How are ESG metrics incorporated?

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 article is the third in a three-part series summarizing our findings related to environmental, social, and governance (“ESG”) metrics in executive compensation programs among these companies.

 

ESG In Compensation & Takeaways from 2022 Proxy Season Part 2: Approaches to Incorporating ESG Metrics in Incentive Plans

Every year, Hugessen Consulting conducts a review of the proxy circulars filed by the constituents of the S&P / TSX60 Index to report on executive compensation and governance trends. This article is the second in a three-part series summarizing our findings related to ESG metrics in executive compensation programs among these companies.

 

ESG in Compensation & Takeaways from 2022 Proxy Season Part 1: Prevalence of ESG Metrics among TSX60 Companies

Every year, Hugessen Consulting conducts a review of the proxy circulars filed by the constituents of the S&P / TSX60 Index to report on executive compensation and governance trends. This article is the first in a three-part series summarizing our findings related to ESG metrics in executive compensation programs among these companies.

Highlights from the 2022 Proxy Season

Matthew Downie, Sean Murray  | June 2022

Hugessen has completed its annual review of the 2022 TSX60 proxy circulars and we are pleased to share key findings on pay levels, pay design, regulatory updates and Say-on-Pay results. In addition to delivering our TSX60 proxy takeaways, we have provided commentary on other topics including board effectiveness, how to navigate the war for talent in an inflationary environment, and the impacts of geopolitical conflicts on compensation.  

Please click above for the webinar recording, download the TSX60 slides here and the full briefing here

Emerging Trends in Executive Compensation and ESG Webinar

Hugessen's June 1st webinar featured topics including: Board oversight of ESG; Incorporating ESG metrics into compensation programs; Shareholder proposals from the most recent proxy season; Anticipated trends going forward; and US perspective from our affiliates at Semler Brossy Consulting Group.

Please click above for the video and download the slides here.   

Snapshot: TSX Executive Gender Diversity

Emily Parsons  | April 2022

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.

ISS and Glass Lewis Update Guidelines for 2022 (Canada)

Richard Liu, Michael Small  | January 2022

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.

Fall 2021 COVID-19 Director Pulse Survey

John Skinner  | January 2022

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.

2021 Proxy Season Review: ESG-Related Shareholder Activism

Ella Chilton  | January 2022

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.