Tenth company adopts “say on pay”

Potash Corporation of Saskatchewan has announced it will voluntarily introduce a non-binding shareholder advisory vote on executive compensation starting next year.

“Potash is the last of the companies slated to face Meritas Mutual Funds’ proposal for a “say on pay” vote during the 2009 proxy season,” the Shareholder Association for Research and Education (SHARE) said on its website. “All of the companies that received the Meritas proposal implemented it in response to the filing.”

The ball started rolling in late February, when votes at RBC and CIBC received majority shareholder support. Bank of Montreal and Scotiabank shareholders followed suit the next week, as did Laurentian bank, but since then, support has been voluntarily, with TD Bank, National Bank, TMX Group, Sun Life and Potash all agreeing to adopt the resolution without a shareholder vote. Only Nortel Networks, which is facing an uncertain future and has postponed its annual meeting, has not followed suit.

For social investors concerned about corporate governance, adoption of the resolution at ten of Canada's largest companies is a clear victory, but Gary Hawton, chief executive officer at Meritas, says there's more work to be done.

“There are still many more companies we had approached but chose not to file – we can only manage so many AGMs in a year – and we are going to go back to them asking them to voluntarily adopt the vote in 2010,” Hawton says. “After we have reached a larger number of adopters, I think it will be incumbent on the Canadian Securities Administrators to then mandate the advisory vote to maintain a level playing field.”