Tag Archives: Ken Hugessen

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New scrutiny on director compensation

Director pay levels are rising, and shareholders and proxy advisers are taking note. But along with a few modest changes in oversight, basic good governance should be enough to keep excesses in check
By Ken Hugessen
With Michelle Tan and Camille Jovanovic
December 13th, 2017

Until recently, director pay attracted little attention from the shareholder community. More recently, however, a few cases in the U.S. of much higher pay have drawn some criticism from shareholders (including several class action lawsuits). In response to these concerns, … Continue reading

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Foreign exchange: the director pay dilemma

The need for international directors has never been greater. But to attract the best candidates—and keep the entire board happy when you do—director compensation needs to effectively address foreign exchange concerns
By Ken Hugessen
With Reanna Dorscher
October 4th, 2017

As Canadian corporations look to diversify their boards, the need to attract international directors—most commonly from the U.S.—increases. Likewise, companies expanding operations south of the border have a growing need to attract and retain U.S. directors. Both circumstances raise the … Continue reading

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The retirement conundrum

There are times when paying severance to a retiring senior executive is warranted. But as a standard practice it raises questions and scrutiny. The good news: boards have options to help avoid the problem
By Ken Hugessen
With Guillaume Poulin and Parvathi Subramanyam
August 3rd, 2017

Severance payments are typically provided to executives in the event of a termination without cause. However, some companies also make severance payments to senior executives upon what looks to be a retirement. These situations often raise questions regarding the rationale … Continue reading

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After the AGM: a compensation committee reset?

With the heavy lifting over for another year, the next few months serve as an opportune time to review mandates and renew committee relationships
By Ken Hugessen
With Erin Poeta
May 19th, 2017

The annual general meeting represents a time of change for boards, as long-serving directors step down and new individuals join on. This time of renewal may also suggest a need for boards and committees to reflect on their mandates. For … Continue reading

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One-time awards: use sparingly

A well-designed compensation framework should negate the need for most one-time awards. Where exceptions arise, they must be handled with care
By Ken Hugessen
With Christine Vinette and Brian Lees
December 19th, 2016

One-time compensation awards can be a useful tool for boards to attract and retain key talent. While such awards have drawn considerable scrutiny of late, shareholders and proxy advisers are not always opposed to their use. This article explores how … Continue reading

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Defusing share buyback anxiety

Investors are watching closely to see how companies deploy their cash, wary of schemes that inflate executive pay. But it needn’t be stressful, as long as boards get a few things right
By Ken Hugessen
With Michelle Tan and John Skinner
October 11th, 2016

The challenges of prioritizing long-term value creation over short-term returns has intensified in recent years and now impacts a wide range of topics, including executive compensation. The significant increase in share buyback activity in the U.S. (US$166 billion in the … Continue reading

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Setting pay through strategic transitions

Establishing performance standards and setting and managing executive pay is never easy. But what happens in a period of structural change? How do boards measure a moving target?
By Ken Hugessen
With Guillaume Poulin and Erin Poeta
August 1st, 2016

Over the last few years, many traditional business models have been threatened by obsolescence, including, to name a few, travel agencies, print media and more recently, coal-fired power plants. Boards and management teams in such sectors are often faced with … Continue reading

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In vogue for 2016? Pay cuts

Their share prices have been falling for years. Now more mining boards, having signed off on cuts to everything else, are wondering if it’s time executive pay followed suit
By Paul Brent
March 4th, 2016

Mining companies are accustomed to working with long lead times: potential plays can take years to assess, mines can take a decade to develop and operate for decades more while commodity cycles rise and fall. This year, as those companies’ … Continue reading

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Options anxiety allayed…for now

New rule on tax deductibility won’t be retroactive
By Listed staff
December 15th, 2015

The sighs of relief were heard all over. In late November, a month after the federal election, Liberal Minister of Finance Bill Morneau put to rest a near panic in public company circles when he announced that changes in the … Continue reading

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Long-term compensation alternatives

Stock options are out of favour and the best-known alternatives aren’t really long-term at all. When it comes to executive pay, what’s a long-term oriented board to do? Try these ideas on for size
By Ken Hugessen
With Bridget McKellar
October 11th, 2015

Corporate boards and management teams of public issuers often bemoan the challenge of making effective long-term strategic business decisions in the face of short-term pressure from financial markets and investors to deliver quarterly results. Recently, however, there has been growing … Continue reading

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All quiet? Keep it that way

Say-on-pay support was up this year and proxy advisers had fewer beefs. Rather than be complacent, boards should build on this goodwill by stepping up shareholder communications and engagement
By Ken Hugessen
With Michelle Tan
July 29th, 2015

Anyone reading the headlines during the 2015 proxy season might think recent efforts to reform executive compensation in Canada have suddenly fallen off the rails with this year’s multiple say-on-pay failures. But judging by shareholder votes, we see that the … Continue reading

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Total return not the total view

Total Shareholder Return has a nice ring to it. And much to recommend it as a tool to guide CEO pay decisions. But boards that use it exclusively aren’t getting a complete picture
By Ken Hugessen
With Linda McNally
May 16th, 2015

In recent years, Total Shareholder Return (TSR) has become the most frequently used metric in long-term incentive plans for assessing company relative performance and guiding the outcome of pay decisions. It is also used by proxy advisory firms to evaluate … Continue reading

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Make long-term value your guide

When executive operational performance and market returns are out of sync, what’s a compensation committee to do? Check and recheck the pay-for-performance rationale and share it with shareholders
By Ken Hugessen
With Lisa Oldridge
February 27th, 2015

As with all commodity players, mining companies are largely price takers, subject to price swings reflecting global macroeconomics, geopolitical forces and changes in underlying supply and demand over which management have no control. Moreover, absolute share-price performance among the miners … Continue reading

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Money talks, excessive pay walks

SPECIAL REPORT: PREPARING FOR PROXY SEASON | An effective proxy season strategy takes in many elements. But these days, nothing within the board’s oversight is more critical to the process, and to AGM voting itself, than executive compensation
By John Greenwood
December 17th, 2014

One of the distinguishing traits of a good board of directors is they try to be prepared, so they’re always looking ahead, craning their necks to figure out what’s coming around the next bend. Back in 2010 the board at … Continue reading

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Own the pay-for-performance narrative

A board’s best defence in the say-on-pay era? Conduct an independent pay-for-performance assessment, then communicate it to your shareholders
By Ken Hugessen
With Lisa Oldridge
October 30th, 2014

Shareholders are interested in ensuring compensation is aligned with performance, and they use say-on-pay votes and director elections to express concerns where this is not seen to be the case. Unfortunately, many issuers fail to provide compelling evidence of a … Continue reading

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