The clock struck midnight on December 31st, ringing in the start of a new year. While most companies work to finalize their audited financial statements in the next month or two, they also need to be aware of other important tasks required in the months ahead. This includes the calculation, review and approval of Annual Incentive payouts for 2018 as well as the review and approval of any adjustments to Base Salary, Target Annual Incentive and Long-Term Incentive opportunities for 2019. Once these approvals are made, companies must figure out how they are going to communicate the executive compensation decisions made for 2018 and potentially what shareholders can expect for compensation in 2019, to shareholders. This information is provided through a company’s Form DEF 14A in the United States or its Canadian equivalent, the Management Information Circular, also referred to as the proxy circular. Specifically, the Compensation Discussion & Analysis (“CD&A”) section is where the majority of information can be found.
Boards spend an unbelievable amount of time, energy and financial resources trying to find the right nominees/candidates that can add value and enhance governance oversight, but for many boards, the momentum ends once the vacancy is filled or when the infamous “orientation binder” is sent to a newly elected board member. In practical terms, this is like an Olympic marathon runner training for years and then deciding to walk their race on the day of their Olympic event – ultimately, they are not utilizing or benefiting from the hard work they put in upfront.
We’ve all been there. The moment of sweat-inducing truth when all of your board software demos are over, and you need to decide. It’s not too life altering of a decision, deciding on board software, but years of ordering items online and never quite receiving what was advertised has made you slightly paranoid. But change is on the horizon, which means that you must wipe the dampness from the corner of your brow and power forward. It’s time to create a board management software comparison so that you can identify the all-encompassing enterprise solution that best fits your organization’s needs.
ISS has recently published its 2019 proxy voting guidelines for the United States and Canada, along with additional clarification on some of its compensation policies. Typically, any changes will apply for all meeting dates on or after February 1, 2019. While there are some differences observed between the two jurisdictions, ISS has provided clarity on updates in the following areas:
There’s been a lot of talk in the market place today about the value of performance plans. The naysayers claim that they are not driving performance in the way they were originally intended, and the supporters argue that all compensation should not be a guarantee. A point of intersection is the fact that everyone agrees that employees should be recognized for the contributions they make and the performance they deliver.
“Shareholders are organizing and mobilizing on new social media platforms like Twitter. This changes the dynamics of shareholder proxy contests to favor small shareholders over management. Disruptive technology may bring about a shareholder revolution, which may not be in all shareholders’ best interests, at least from the perspective of shareholder wealth maximization, and it also has powerful implications for the future of corporate social responsibility.” Seth Oranberg, How Twitter is Disrupting Shareholder Activism
While Glass Lewis has not changed its current approach in the following areas, it has codified certain policies in the United States:
Glass Lewis has recently published its 2019 proxy voting guidelines for the United States and Canada. While there are some differences observed between the two jurisdictions, Glass Lewis has provided clarity on changes in the following areas:
Peter Gillin is a Corporate Director who currently serves on the Boards of several public companies, including: Turquoise Hill Resources Ltd., Sherritt International Corporation, Dundee Precious Metals Inc., TD Mutual Funds Corporate Class Ltd. and Wheaton Precious Metals Inc. He was a Director of HudBay Minerals, Inc., and was Vice Chair of N.M. Rothschild & Sons Canada Limited, an investment bank. Peter was President and CEO of Zemex Corporation and Chairman and CEO of Tahera Diamond Corporation.