Thought Capital

Tesla’s board proposed a $1 trillion incentive for Elon Musk, arguing his leadership is essential for the company’s future. This article urges Canadian boards to balance bold executive pay with governance, cautioning that shareholder value alone shouldn’t justify extreme compensation. It highlights the need for rigorous processes and proportionality in designing CEO incentives.

Executive pension plans in Canada have traditionally been shaped more by legacy practices than by strategic intent. Historically, defined benefit (DB) plans dominated the landscape, offering predictable retirement income based on formulas tied to salary and years of service. However, evolving disclosure requirements and the growing financial burden of DB liabilities have prompted many companies to reassess these arrangements. Today, defined contribution (DC) plans are gaining traction, especially among TSX60 companies, reflecting a broader shift in executive compensation toward long-term, equity-based incentives.

As of October 16, 2025, Say-on-Pay (SoP) support levels for Canadian issuers showed a slight uptick compared to 2025. The average vote across TSX-listed companies reached 92.6%, up from 92.2% last year. Among the TSX60, the improvement was more pronounced, climbing from 91.7% in 2024 to 93.2% in 2025.

As we enter the last quarter of 2025, Boards are looking back on an eventful year. Economic, market, and geopolitical uncertainty rank amongst the top issues for Boards and CEOs, although these are the areas where Boards feel least confident.

The role of the Human Resources and Compensation Committee (HRCC) Chair continues to evolve at a rapid pace. With heightened attention on human capital, increased shareholder scrutiny, and a more complex operating environment, today’s HRCC Chairs face a broader and more demanding mandate than ever before.

The use of non-financial metrics has become a common fixture in executive incentive programs as they are often seen as critical drivers of business performance. Metrics such as sustainability, employee engagement, and strategy commonly complement traditional financial and operational measures in the annual corporate scorecard, and at times in the long-term incentive program. On the surface, this appears to be progress: broader measures of corporate performance providing a more nuanced linkage between pay and performance. But a closer look raises an important question: are non-financial metrics truly at-risk and subject to business outcomes, or do they inflate bonuses and insulate executives from underperformance?

A Total Variable Compensation (“TVC”) incentive program offers a unique approach to incentive compensation, blending elements of traditional short- and long-term incentive structures (“STIP” and “LTIP”). In this briefing, we shed some light on what it is, how it works, and key considerations for its implementation.

In a world where flexibility and long-term alignment matter more than ever, the traditional use of Deferred Share Units (DSUs) may be falling short. Julia Hunt and David Crawford from Hugessen Consulting, with insights from Torys LLP, explore an alternative that offers greater flexibility, supports long-term ownership, and reduces corporate liabilities: Direct Taxable Ownership.

Hugessen has completed its annual review of the 2025 TSX60 proxy circulars, and we are pleased to share key findings on executive pay levels, incentive design, Say-on-Pay results, and other governance topics.

This webinar addresses how Boards are navigating modern issues and trends tied to executive compensation, governance, ESG, and Board effectiveness.

Hugessen Consulting is proud to announce the promotion of Ciara Wakita to Partner. Since joining the firm in 2022, Ciara has played a pivotal role in expanding Hugessen’s Board Effectiveness practice, which she co-leads across Canada, the US, and Bermuda. Her promotion reflects the firm’s continued investment in this rapidly growing area of strategic advisory.