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

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

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

Paul Gryglewicz Shares Insights with BNN on CSX Corp.’s New CEO’s Compensation

Florida-based CSX Corporation, the third-largest rail company in the United States, has brought Hunter Harrison in as CEO. Certain aspects of Mr. Harrison’s pay package are being put to a shareholder vote, by the board.

Paul Gryglewicz, Senior Partner, Global Governance Advisors in a recent interview with BNN shared his views on corporate governance, including the fairness of putting the decision to shareholders and whether this could set a precedent.

“Reputation-wise, I don’t think it was a solid move on Hunter Harrison’s part to make this claim to say that if you (shareholders) don’t vote in favour of this $84-million (USD) and special tax indemnity, I am walking away,” he said.

Speaking to the potential payout from the 9 million options granted to Mr. Harrison that are not up for a shareholder vote, Paul indicates:

“If he repeats his performance at CP and improves the stock price 3 times again… he is going to be on a realizable income basis earning close to $900 million before tax.” That said, Paul also noted that the stock option package will be worth nothing if the current share price drops over Mr. Harrison’s tenure, making it more of a “hit or miss” plan than has been provided at CSX in recent years.

Watch full interview here.

Winds of Change – Office Depot names Lenovo executive Gerry Smith new CEO

GGA’s Insights

On February 27, 2017 Lenovo executive, Gerry Smith, will become the new CEO of Office Depot. This appointment comes in the wake of current CEO, Ronald Smith’s announcement of his intention to retire from the role, but continue as Chairman.

Luis Navas, Senior Partner, Global Governance Advisors, in a conversation with Sun Sentinel expressed that he sees this as being a good change, a good practice. Luis also believes that investors played a critical role in pushing for a non-executive Chairman.

In lieu of a 2016 bonus that Gerry will be giving up at Lenovo, he is scheduled to receive $1.2 million in cash five days following his start in this new role. While Luis agrees that it is usual practice to pay out bonuses owed from a previous role, he also pointed out that the SEC filing does not clarify how much Gerry is leaving on the table in Lenovo equity.

Full story here.

Women CEOs in Top BC Firms: GGA’s Arden Dalik Featured in Business In Vancouver Magazine

GGA’s Senior Partner Arden Dalik is featured in the latest Business In Vancouver magazine, where she provides her commentary on the latest findings on the number of women CEOs in BC’s top firms. .

As Arden states, “‘the CEO is still a position where we are really lagging behind, obviously, versus the demographics of the population …'”

That said, she points to the growing number of women in senior executive roles as an indication that things have been changing over the last 10 years.

“One of the top positions in Eldorado Gold is occupied by a very strong, very capable woman,” she said. “They also have a woman on their board now in a very technical, male-dominated industry.”

You can read the full piece, authored by Nelson Bennett, here.

GGA’s Second Annual Pay for Performance Survey With The Calgary Herald

GGA’s second annual pay for performance survey for the Calgary Herald, looking at executive pay among the top 5 earners in Calgary’s Top 100 companies, is now out.

As GGA’s Managing Partner for Western Canada Arden Dalik said in her op ed this year, “What a difference a year makes. This year, the ‘C’ in C-suite could stand for ‘cut, control and contain’ at most Calgary companies.”

The results we report paint a nuanced picture of how the energy sector is adapting to the rapid changes in market value for the price of oil.

You can read the full summary and view our online graphics with the Herald here.

You can read Arden’s op ed here.

You can also read Herald Business Reporter Dan Healing’s piece on this year’s survey here.