Thought Capital

Institutional Shareholders Services (“ISS”) and Glass Lewis have updated their 2023 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, 2023, while those from Glass Lewis will apply to meetings held on or after January 1, 2023. This briefing provides a summary of updates on compensation-related and select governance-related topics for the Canadian market.

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.

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.

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.

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.

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. 

With the 2022 proxy season nearly at a close, HR and compensation committees are using the opportunity to reflect and take stock as they plan their forward agendas. Partnering with the Institute of Corporate Directors (ICD), Hugessen Consulting has reviewed executive pay disclosure among large Canadian public organizations. Join the ICD and Hugessen Consulting as we hear from a panel of experienced directors and executive compensation experts to discuss and share insights into how boards addressed pay in 2021 while informing boards and management teams about predicted executive pay trends for the following year.

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.   

The constant assessment of the existing CEO's abilities and performance concerning the demands of the business is crucial to planning for CEO transitions.  Partnering with the Institute of Corporate Directors (ICD), Hugessen and ICD’s panel of speakers address CEO performance management methods and associated compensation subjects.

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.