SURREY, BC, May 1, 2013 /CNW/ - Coast Capital's board will establish a member panel to advise on director compensation following the results of a special resolution vote on the issue announced April 30 at the credit union's AGM.
The board will work with the advisory panel to determine if any changes to director compensation are required and if so, submit these changes to members for a vote in 2014.
According to results released at Coast Capital's AGM, 79.7 per cent of members voted "for" the special resolution that "the members of Coast Capital Savings Credit Union establish the remuneration for the Directors of the credit union and that the amount paid to each Director is published in the Annual Report," while 20.3 per cent voted against it. In total, 23,098 valid ballots were cast during the special resolution voting period from March 22 to April 16.
"The resolution has passed and this means that following the 2013 AGM members will now vote on any future changes to director compensation before it is implemented," said Glenn Wong, chair of the governance committee of Coast Capital's board. "We take to heart what our members have told us. They have said that they want to approve the amount of compensation directors receive and we will incorporate this process as we continue to adhere to our remuneration philosophy."
The advisory panel will review director compensation at Coast Capital including how to apply the principles of the member approved Director Remuneration Philosophy and the information contained in the 2013 triennial review (an assessment of Coast Capital's board compensation against the market and the Director Remuneration Philosophy, completed by an independent compensation consultant). Details on the composition, terms of reference and time frame for the panel's work are being developed and will be shared with the membership as soon as these are finalized.
Wong said any changes to director compensation coming from subsequent triennial reviews will be approved by a membership vote, adding that the board is committed to ensuring that director remuneration continues to support sound corporate governance, the strength of Coast Capital and the interests of members. He said fair and competitive director compensation remains a cornerstone of strong governance at Coast Capital and has contributed to healthy financial performance, high member satisfaction and strong membership group for the credit union.
"The dialogue that the special resolution helped generate on this topic proved to be an opportunity to receive member input on an important governance issue," Wong said. "On behalf of the board of directors, we want to thank all those members who voted in the special resolution and took the time to share their feedback. An engaged membership is the goal of every credit union and something that sets us apart from other financial institutions."
Changes stemming from 2013 triennial review
Wong said in the meantime, the board recently completed its triennial review of director compensation and as a result, the following changes reported at the AGM will be implemented:
- Director compensation will be pegged at the mid-point between the highest quartile for financial cooperatives and the lowest quartile for comparable public companies
- The board is postponing the recommendation of the triennial review to increase directors' base retainers from $25,500 to $29,500
- The board chair's retainer will be reduced from $76,500 to the $65,000 mid-point
- Committee chair retainers will be reduced from $10,610 to the $5,000 mid-point
- Director meeting fees will drop from $1,020 to the $1,000 mid-point
- The board's standing request to have the chair attend all board committee meetings will be eliminated
- The annual cost of living allowance for director compensation will be eliminated
- Coast Capital will continue to publish director retainers, meeting fees, and the number of board meetings directors attended on the credit union's website. Total director and board compensation will also continue to be reported on the website. In addition, all this information will be included in the annual report each year.
Looking forward, another key change is that a special board oversight committee which helped guide Coast Capital's recent banking system conversion is currently being phased out.
Wong said when all combined, these changes to director compensation could result in future savings in annual total board compensation of approximately $130,000 or 18 per cent and chair compensation of approximately $40,000 or 26 per cent based on typical board activity.
"These changes are in accordance with the 2007 member approved director remuneration philosophy and reflect the changing market reality," Wong added.
Coast Capital Savings Credit Union is Canada's largest credit union by membership with 504,000 members, total assets under administration of $14.6 billion and 50 branches in the Metro Vancouver, Fraser Valley, and Vancouver Island regions of British Columbia. Product innovations include Canada's first free chequing account from a full-service financial institution and the country's most flexible mortgage product, the You're the Boss™ Mortgage, which was named 2010 Mortgage of the Year by canadianmortgagetrends.com. Coast Capital offers one of Canada's 10 Most Admired Corporate Cultures™. It is a member of Canada's Best Managed Companies Platinum Club and an Imagine Canada Caring Company. To learn more, visit www.coastcapitalsavings.com.
SOURCE: Coast Capital Savings Credit Union
For further information:
Divine Agodzo, manager, media relations
Coast Capital Savings