An increasing acceptance of advisory voting on executive compensation (“say-on-pay”) as a corporate governance norm is evident from monitoring efforts from the past four years. SHARE maintains a current list of Canadian companies that have adopted say-on-pay votes for shareholders at annual general meetings, and advocates that investors’ best interests are served by corporations providing an opportunity to express their views on executive compensation. In 2010, SHARE recorded less than 30 Canadian companies had adopted say-on-pay. By 2013, 126 companies offered advisory votes on executive pay, with most offering a say-on-pay vote on an annual basis (though a small number – eight, or 6% – have opted for biennial or triennial votes). Companies holding say-on-pay votes increased nearly 50% from 2012 to 2013 alone. The list includes a majority of the TSX60; by the end of 2013, only twelve companies (or 20%) of the TSX60 do not offer a say-on-pay vote, and these represent mostly closely-held companies where minority shareholder influence does not play a large role.
Also apparent over the past four years is the increasing number of votes against management. Last year saw a historic spike of shareholder dissatisfaction in executive compensation when Barrick Gold received 85% votes against its executive pay package. In addition, two other voting results were defeated. More than 50% of shareholders at Golden Star Resources Ltd. and Equal Energy Ltd. opposed management. In 2012, only one pay vote was defeated (QLT Inc. at 58%). Votes where more than a quarter of shareholders opposed management’s pay proposals are also on the rise, from 2% in 2011 to 10% in 2013. Watch for SHARE’s 2013 Annual Proxy Vote Survey, to be released next month, to see how your investment manager voted on key executive compensation packages in 2013.
Find SHARE’s Say-on-Pay list here.