loading...
Canada's securities regulators called Friday for companies to improve their explanations to investors about how their executives are compensated.
They focused especially on having the firms provide the goals used to measure performance.
The Canadian Securities Administrators — which represent regulators in each of the provinces and territories — published proposed changes to regulations on how companies report executive compensation.
The aim is to solicit comments from companies and investors before these changes become law.
“Improved disclosure helps investors understand how boards of directors make decisions about executive compensation and also helps them determine whether management's incentives are aligned with shareholder interests,” said Jean St-Gelais, chair of the CSA.
The proposed changes were introduced after the CSA in 2009 reviewed how well a sample of Canadian public companies had done at disclosing the reasons for executive compensation and also as the U.S. tightened its regulations.
The review of 70 companies found that though most generally met the new requirements, most also could improve their disclosure. Eight companies did not meet minimum acceptable standards.
The report found, in some cases, a lack of objective measures tying compensation to performance, undisclosed performance goals, the use of discretion in awarding compensation and a lack of clarity between corporate and the goals of individual executives.
The review was also critical of the way some companies compared their approaches to compensation with those of their rivals.
The comment period closes on Feb. 17.
CBC News
