Five Critical Human Capital Management Questions

by | Jul 5, 2018 | Board Dynamics, Executive Compensation, Governance, Human Resources, Leadership

Questions Every Board Must Address

“Given the pace of business change today, companies increasingly need agile boards with the expertise to guide the company amid emerging threats and opportunities. And investors increasingly expect that boards will embrace rigorous practices to ensure they have the right expertise in the boardroom to respond to evolving market and competitive demands. The highest-performing boards will adopt a continuous improvement mindset, ensuring that their composition evolves in light of new strategic imperatives.” AESC.org

Global Governance Advisors (GGA) works with its clients to address the challenge of meeting these threats head on and taking advantage of the opportunities to gain a competitive edge by addressing five human capital management questions for boards of directors.

Five HCM Questions for Boards of Directors

How does your organization approach these five questions?

  • How can our board better impact the success of the organization?
  • Have we fostered an environment that encourages individual directors to think critically about their contributions and the relevance of their skills to the company strategy?
  • Are we using our annual board assessment and regular executive sessions to assess the culture and dynamics in the boardroom and identify ways to operate more effectively?
  • Does our board have a platform to analyze and scorecard senior management compensation plans?
  • Does our board have access to an oversight vehicle for shareholder engagement activity that makes valuable information readily available to the board – in real time?

GGA’s offers a unique approach of weaving together a blend of services that address board productivity, governance and develop Senior Management compensation (incentive) plans to deliver outcomes that align with company goals.

ISS Proxy Voting Guidelines Updates 2017

by | Nov 27, 2017 | Canada, Governance, ISS, Proxy Guidelines

What do these updates mean for Canada?

Last week, ISS released the 2018 Americas Proxy Voting Guidelines Updates, detailing policy changes for U.S, Canada and Brazil.

Changes for Canada

Pay for Performance Evaluation – Relative Quantitative Screening

Now incorporates the ranking of total pay for CEO and financial performance of a company within a peer group, each measured over a three-year period within the Relative Pay & Performance test under Quantitative considerations. A detailed white paper will be provided at a later date.

Director Overboarding Policy

(effective for meetings on or after February 1, 2019 for TSX-listed companies only. Does not apply to TSX Venture)

Withhold votes for individual director nominees including:

  • Non-CEO directors serving on more than five public company boards; or
  • CEOs of public companies serving on the board of more than two public companies besides their own, i.e., votes to be withheld only at their outside boards.

Gender Diversity Policy

(effective for TSX Composite Index companies starting 2018. Applies to all TSX-listed companies starting February 2019)

  • Withhold votes for the Chair of the Nominating Committee where:
    • The company has not disclosed a formal written gender diversity policy; and
    • There are zero female directors on the board.

Board Structure & Independence (TSX only)

New language has been added relating to votes withheld for any Executive Director or Non-Independent, Non-Executive Director where the board:

  • Is less than majority independent; or
  • Lacks a separate compensation or nominating committee.

Non-Independent Directors on Key Committees for TSX-listed companies

Withhold votes for members of the audit, compensation, or nominating committees who:

  • Are Executive Directors;
  • Are Controlling Shareholders; or
  • Is a Non-employee officer of the company or its affiliates and among the five most highly compensated.

Non-Independent Directors on Key Committees for TSX Venture companies

Withhold votes for Executive Directors, Controlling Shareholders or a Non-employee officer of the company or its affiliates who is among the five most highly compensated, on condition that they:

  • Are members of the audit committee;
  • Are members of the compensation committee or the nominating committee and the committee is not majority independent; or
  • Are board members where the entire board fulfills the role of a compensation committee or a nominating committee and the board is not majority independent.
ISS also made certain modifications to their policy on defining Director Independence, i.e. re-classification of certain situations under different categories, Majority-Owned Company policies and Advance Notice requirements.
For more information, please refer to the link above.

GGA’s Seventh Annual CEO Pay for Performance Survey with Globe and Mail

by | Jun 13, 2017 | Executive Compensation, Governance, Research, Survey

GGA and the Globe and Mail partnered once again to present our seventh annual ranking of CEO Compensation for the top 100 largest public companies in Canada’s S&P/TSX composite index.

Full results here.

There’s more behind the final tally. The compensation of CEOs is made up of various components. GGA and the Globe and Mail analysed the compensation for the top 100 CEOs in Canada and broke it down by pay, share ownership, untapped wealth, cash bonus and equity grants.

You can view our findings here.

Our top 100 CEO Compensation ranking shows that equity grants have become a major reason why CEO pay is climbing in Canada. The Globe and Mail’s Janet Mcfarland examines the reaction from major shareholders, who are increasingly growing frustrated with the way companies are offering share units as a major part of CEO pay.

Full analysis here.

And there is more. Paul Gryglewicz in a recent BNN interview, discussed our top 100 CEO Compensation study, including key insights for shareholders, and what boards should consider when developing a CEO compensation package in today’s business environment.

Full interview here.

Paul Gryglewicz Talks About Valeant’s Governance and More on BNN

by | Mar 29, 2017 | Executive Compensation, Governance, Media

Former Valeant CEO Michael Pearson is suing the drug-maker for three million shares and US$180,000 in consulting fees he says he’s owed.

In an interview, yesterday, on BNN, Paul Gryglewicz, Senior Partner, Global Governance Advisors expressed his views on the issue. Mr. Gryglewicz alluded to the fact that the compensation package for Pearson was high-risk high-reward, and deviated from typical market practices by front-loading multiple years worth of long-term incentive grants into one large grant at the start of the employment contract. This practice appears to have continued with Valent’s current CEO, Joseph Papa.

Full interview

Paul Gryglewicz’s Take on Outgoing Rogers CEO Compensation: Globe and Mail

by | Mar 21, 2017 | Canada, Executive Compensation, Governance, Media

Toronto-based Rogers Communications Inc. paid outgoing CEO, Guy Laurence, a total of $42.6-million over three years.

In an interaction with The Globe and Mail, Paul Gryglewicz, Senior Partner, Global Governance Advisors, explained, “What we see highlighted here is the cost of turning over your Chief Executive is substantial to the shareholder.” However, he added that at just shy of three years, Mr. Laurence’s tenure with the company is in line with the median range of about three or four years for many Canadian CEOs.

One somewhat unique feature of Mr. Laurence’s separation package, is the structure for his remaining stock options yet to vest. Mr. Gryglewicz noted that it is a shareholder-friendly move to provide for a continuation period – rather than accelerating the vesting period and allowing him to exercise the options immediately – because it means that whatever value Mr. Laurence receives for his options will be tied to the performance of the company’s shares, which is in part attributable to decisions he made when he was still at the company.

Read Full Story Here