Canadian Coalition for Good Governance says now is not the time for "Say on Pay" regulations for executive compensation.

    Canadian companies are improving executive compensation practices and

    TORONTO, Jan. 7 /CNW/ - The Canadian Coalition for Good Governance (CCGG)
will not support any regulatory changes or recommend universal backing for
resolutions that will introduce mandatory advisory shareholder votes on
executive compensation this year. In its position paper on the issue of "Say
on Pay", the Coalition stated that Canadian companies are already making
strides to improve executive compensation practices, address disclosure issues
and improve shareholder involvement, and that regulations of this kind are not
the answer at this time.
    "It is the role of the board, and in particular the compensation
committee, to establish appropriate executive compensation plans that clearly
align the interests of shareholders and management," said David Beatty,
Managing Director, Canadian Coalition for Good Governance. "By working
constructively with corporate Canada, organizations like ours can provide
perspective on the difficult balance between market forces and shareholder
interests in the arena of executive pay but it is not our role to find that
    "Say on Pay" resolutions refer to an advisory (non-binding) shareholder
vote to allow shareholders to comment on executive compensation. In their
paper, the CCGG outlined their reasons not to support these types of
resolutions at this time, including:

    The continued adoption of majority voting for director elections,
    allowing shareholders to express their concerns over issues such as
    executive compensation by withholding votes;

    The introduction of new CSA requirements for compensation disclosure that
    will have an impact on linking pay to performance;

    An overall improvement in compensation disclosure practices since last
    proxy season, and;

    The increasing role of independent executive compensation advisors in the
    compensation process.

    "We will look to corporate Canada to continue to improve the executive
compensation process. Moving forward, if we feel progress on this issue has
stalled, we may support resolutions such as "Say on Pay" to ensure the voice
of the shareholder is heard," said Beatty.
    The Coalition also released a list of requirements representing the areas
where Canadian companies should focus their efforts to improve their
compensation and disclosure programs in the future. Requirements include:

    Clear explanations of overall compensation programs and the link between
    pay and performance;

    Executive compensation packages that are less complex and show a direct
    alignment with the interests of shareholders;

    Better disclosure and justification of post-retirement benefits and
    change of control provisions for executives.

    In addition, the Coalition is promoting the abandonment by corporations
of the practice of slate voting and the adoption of majority voting for each
    "The Coalition has provided a framework to help Canadian companies set
executive compensation levels and provide clear and concise disclosure. We
will continue to actively work with boards and compensation committees to
provide the shareholders' view on compensation practices and disclosure," said
    For more information on CCGG's "Say on Pay" paper, go to

    The Canadian Coalition for Good Governance is made up of 49 of Canada's
leading institutional investors with over $1 trillion of combined assets under
management. The mission of the Coalition is to represent Canadian
institutional shareholders through the promotion of best corporate governance
practices and to align the interests of boards and management with those of
the shareholder.

For further information:

For further information: David Beatty, Managing Director, Canadian
Coalition for Good Governance, (416) 868-3576

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