Thursday, March 25, 2010

Say on pay campaign to be ramped up

Meritas Mutual Funds says it plans to expand its successful “say on pay” executive compensation campaign. Working with the Shareholder Association for Research and Education (SHARE), Meritas submitted say on pay proposals at 12 Canadian companies this year.

Ten of those, Enbridge Inc., EnCana Corporation, Suncor Energy, TransAlta Corporation, Biovail Corporation, Canadian Pacific Railway Limited, Agrium Inc, Russel Metals Inc., Barrick Gold Corporation and Major Drilling Group International Inc. have agreed to hold pay votes beginning in 2010 or 2011.

“I applaud these companies for recognizing that a “say on pay” vote is quickly becoming recognized as a sign of good corporate governance,” said Meritas CEO Gary Hawton in a statement.

Two companies did not voluntarily adopt the proposal. Shareholder votes will be held at Gennum Corporation on April 7 and at Methanex Corporation on April 29.

“While we have had some success the past two years in making “say on pay” a reality in Canada, there are still hundreds of companies that have not adopted this practice,” said Hawton. “If need be, we will go through the list of companies we own, one by one, to make this vote a reality but I would hope that there are many board of directors who will step up to the plate and act on providing this vote without a need for shareholder pressure.”

The campaign began in 2007, when Meritas approached the country’s big banks, asking if they would voluntarily provide their shareholders with an annual advisory vote on executive compensation. The banks declined, and Meritas instead filed shareholder resolutions. In 2008, those resolutions failed, but garnered an average of 40% of the vote. The same resolution passed in 2009 and this year, the big banks are receiving overwhelming support for their compensation plans.

A total of 25 Canadian companies have now adopted say on pay.

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