It is hereby proposed that, in the bank’s annual report to shareholders, the Remuneration Committee justify the various amounts paid to upper management as outlined within the parameters of the remuneration policy and that the chair of the committee be present at the shareholders’ meeting in order to answer questions concerning his/her report.
The courts have ruled on the participation of the shareholder in the business of publicly traded companies. Superior Court Judge Iacobucci, in Verdun vs. the Toronto Dominion Bank states the following: “It is obvious that subsection 143 (1) of the Bank Act and federal provisions constitute a commitment on the part of legislature to promote the participation of shareholders in corporate management.” Judge Rayle is even more precise in Yves Michaud vs. the National Bank and the Royal Bank: “A bank’s shareholder will vote only on questions proposed by management? In this case, the remuneration of bank directors will never be submitted to the critical examination of shareholders since it is the responsibility of the board of directors (sec. 199(1)). This is a question which attracts public interest across Canada. Everyone would have the right to an opinion on this question… except for shareholders?”
Management remuneration, with its options to purchase and its golden parachutes are among the major irritants of corporate governance (Kirby Report). An in-depth debate on this question, given full information (individual performance, expert reports, questioning of the remuneration committee chair, etc.), would improve shareholder confidence in management.