Thought Capital

When it comes to proxy disclosure, companies must strike a delicate balance—providing enough detail to build trust and transparency while maintaining a competitive edge.

In Clarity, Candor and Cutting the Clutter: The Philosophy of Proxy Disclosure, Hugessen’s Brian Lees and Owen Stott explore key considerations for shaping a disclosure philosophy that not only meets regulatory requirements but also enhances stakeholder confidence.

Whether you’re crafting executive compensation disclosures for the first time or refining your approach, this article offers valuable insights on how to frame the narrative, align with corporate priorities, and build credibility.  

In 2024, organizations faced unprecedented challenges as the rapid emergence of artificial intelligence and shifting geopolitical landscapes placed significant pressures on Boards, demanding agile adaptation to an ever-more complex business environment. Hugessen’s 2024 Director Pulse Survey builds on the insights of prior years, exploring how Boards are responding to these challenges. The survey examines the implications for incentive design, executive compensation, and overall Board effectiveness, shedding light on strategies for success defined by constant change.

How are Canadian boards evolving to meet increasing pressures from investors, regulators, and the public? This article explores the latest trends in board effectiveness practices and disclosures within the TSX Composite.

Institutional Shareholders Services (“ISS”) and Glass Lewis have updated their voting guidelines for 2025. The updated guidelines from ISS will apply to shareholder meetings for publicly traded companies on or after February 1, 2025, while those from Glass Lewis apply to meetings held on or after January 1, 2025. This briefing provides a summary of updates on compensation-related and select governance-related topics for Canadian issuers.

Hugessen Consulting is pleased to announce the appointment of Bridget McKellar as Partner, effective November 1^st, strengthening our leadership team in Toronto. Since our founding in 2006, Hugessen has built a reputation for delivering industry-leading expertise and cultivating deep, trusted partnerships with our clients. Bridget’s appointment reflects our dedication to upholding this legacy while expanding our capabilities to meet the evolving needs of our clients.

Based on the Say-on-Pay results as of October 20, 2024, we observe a slight increase in support levels relative to 2023, with Canadian issuers recording an average voting result of 92.4% (compared to 91% in 2023). TSX60 issuers more specifically have experienced a similar increase relative to 2023 with average voting results of 91.7%, compared to 89.8% in 2023. Four Canadian companies (one TSX60 issuer) failed their Say-on-Pay in 2024, three of which also failed in 2023 (OpenText Corporation, Aimia Inc., and First Majestic Silver Corp.).

Privately-owned companies in Canada benefit from less regulatory scrutiny and favorable taxation of stock options compared to public companies, especially for Canadian-controlled private companies (CCPCs). However, recent changes to capital gains tax rates and previous adjustments to stock option taxation have affected larger non-CCPCs. While private companies face challenges in structuring and administering equity compensation due to the absence of public market valuations, public companies continue to set competitive standards with long-term equity awards. Companies with cross-border operations must carefully design LTIPs to comply with both Canadian and U.S.

As of October 20, 2024, 82 shareholder proposals have been voted on at Canadian issuers in 2024, 55 of which have been at TSX60 issuers. Of these 82 proposals, 38% were Environmental, 33% Governance, 20% Social, and 9% Compensation-related. There was only one Operational proposal regarding anticompetitive practices, which garnered 13% support (Metro Inc.).

Recent changes to the Competition Act may have implications for companies using environment-related metrics in their incentive plans.

Hugessen is pleased to announce a strategic partnership with MM&K, a prominent London, UK-based executive remuneration consultancy. This collaboration extends Hugessen Consulting’s reach and expertise into Europe and the UK, enabling us to better support clients with international operations by providing seamless, integrated executive remuneration and governance advisory services across multiple regions.