Securities regulators seek to improve rules for disclosure on executive pay
Canada’s securities regulators want more companies to disclose more information about how their executives are paid, including the goals used to measure performance.
The proposed changes build on new rules for the disclosure adopted by the Canadian Securities Administrators in 2008.
A review of 70 companies last year found that though most generally met the new requirements, most also could improve their disclosure.
“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, chairman of the Canadian Securities Administrators and chief executive of Quebec’s Autorite des marches financiers.
Eight companies did not meet minimum acceptable standards, according to the CSA.
The report found the most significant disclosure issues regarding performance goals including the lack of objective measures, undisclosed performance goals, the use of discretion and a lack of clarity between corporate and individual goals.
The review was also critical of the way some companies compared its approach to the way its peers paid executives.
