Compensation Committee
Responding to shareholders' demands for pay for performance
Compensation committees are changing. They are becoming much more active in directing and controlling compensation policies and practices. They also face an increasingly challenging environment in which to operate. On one hand, the competition for proven top talented people is tougher than ever before, so compensation practices need to be designed to attract, retain and motive the best people. At the same time, however, regulators and shareholders are demanding greater transparency and pay for performance accountability.
The SEC recently approved new rules regarding executive compensation disclosures. Canada is not far behind. The Canadian Securities Administrators released new rules for the disclosure of compensation practices in September 2008. These new requirements, which are included in the CSA's Form 51-102F6, Statement of Executive Compensation, come into effect for financial years ending on or after December 31, 2008.
Authoritative Guidance
- Executive Compensation Disclosure: Observations on the 2009 Proxy Season and Expectations for 2010, Remarks by Shelley Parratt, Deputy Director, Division of Corporation Finance (SEC)
- H.R. 3269, Corporate and Financial Institution Compensation Fairness Act of 2009 (White House, PDF)
- FSA draft Code of practice on remuneration policies (UK Financial Services Authority)
- Form 51-102F6 Statement of Executive Compensation (in respect of financial years ending on or after December 31, 2008) and Consequential Amendments
- Executive Compensation Disclosure: Observations on Year Two and a Look Forward to the Changing Landscape for 2009 by John W. White, Director, Division of Corporation Finance (SEC)
- SAB 110, Use of a "simplified" method, as discussed in SAB 107, in developing an estimate of expected term of "plain vanilla" share options in accordance with FAS 123R, Share-Based Payment (SEC)
- Interpretive Guidance on the New Executive Compensation Rules (SEC)
- National Policy 58-201, Effective Corporate Governance (CSA)
- CSA Staff Notice 51-304, Report on Staff's Review of Executive Compensation Disclosure
- Executive Compensation and Related Person Disclosure (Final SEC Rule, PDF)
- Transition Questions and Answers
Thought Leadership
- The Conference Board Task Force on Executive Compensation (The Conference Board of Canada, PDF)
- 2009 Executive Compensation Principles (The Canadian Coalition for Good Governance, PDF)
- Human Resource and Compensation Issues during the Financial Crisis – Questions for Directors to Ask (CICA, PDF)
- Executive Compensation: Restoring Confidence Without Sacrificing Effectiveness (Pearl Meyers & Partners, PDF)
- Corporate Board Governance and Director Compensation in Canada: A Review of 2008 (The Korn/Ferry Institute)
- Executive Compensation: What to Watch in 2009 (Moody’s Investors Service, Inc., 2009/03, PDF)
- Executive remuneration: European Forum sets out best practices for directors' pay (European Corporate Governance Forum of the European Commission)
- The Compensation Committee: From Competence to Excellence (NACD, PDF)
- Executive Compensation Data in XBRL Format (Xtensible Data)
- Trends and Issues Report: 2008 Proxies that Make the Grade (Pearl Meyer & Partners, PDF)
- Director Alert: Executive Compensation Disclosure – Questions directors should ask, written by John Hughes, Associate Partner at Deloitte (CICA, PDF)
- "Say on Pay" position paper (Canadian Coalition for Good Governance, PDF)
- Good Governance Guidelines for Principled Executive Compensation
- 20 Questions Directors Should Ask about Director Compensation (CICA)
- 20 Questions Directors Should Ask about Executive Compensation (CICA)
- Heads-Up On Executive Compensation Disclosure (Frederic W. Cook & Co.)
- Exit Pay Best Practices in Practice (RiskMetrics Group, registration required)