It is proposed that the Board of Directors adopt a rule of governance stipulating that the executive
compensation policy be subject to an advisory vote by shareholders.
Since 2010, many shareholders in Québec and Canada have the opportunity to express their
opinion regarding the compensation policy of executive officers and invite them to moderate their
salary demands while treating employees fairly since they also contribute to the company’s
success.
According to a recent study, companies who have adopted best practices in governance and
consultation have typically brought about changes designed to:
-better align interests of executive officers with those of shareholders;
-grant compensation based on the fulfillment of financial and extra financial objectives;
-include risk managers in the compensation process;
-provide recovery provisions in case of fraud, breach of ethics or restatement of financial
results;
-undertake preliminary consultations with small shareholders and their representatives,
thereby allowing them to voice their comments and recommendations regarding
compensation.
Members of our Movement and many citizens strongly object to the steady and exponential
increase in compensation of executive officers, while the average worker’s compensation barely
keeps up with inflation. In early 2010, the Canadian Centre for Policy Alternatives reported that
Canada’s top 100 CEOs from publicly-listed companies earned 155 times more than the average
Canadian wage, a gap which is ethically and socially unacceptable. Nothing justifies such a stark
contrast and pressure has been building in recent years to reverse this trend.
We acknowledge that it is the duty of the Board of Directors to determine the compensation of
executive officers. Yet, we also feel shareholders have the right to express their opinion on the
breadth and composition of compensations which foster excessive risk-taking and are not
intended to reward exceptional performance, as the level of compensation often suggests. For this
reason, we are in favour of an advisory vote (“Say on Pay”) that will give the Board of Directors a
better feel of shareholders’ position on the policy.