Say on Pay

Resolution Text

RESOLVED that shareholders request that the Board of Directors adopt a policy that Great-West Lifeco Inc. (“GWL”) shareholders be permitted to vote annually, on an advisory basis, on a management proposal to ratify the compensation of Named Executive Officers as set forth in the proxy statement.

Supporting Statement:  An advisory shareholder vote on executive compensation (“Say on Pay”) is a corporate governance best practice for public issuers. In Canada, the majority of companies in the S&P/TSX 60 Index hold Say on Pay votes.[1] In Australia, United States, the United Kingdom and Switzerland, Say on Pay is mandatory for publicly-traded companies.[2]

As of April 2019, over 220 companies in Canada have adopted annual Say on Pay votes, including GWL’s competitors, more than 71 per cent of companies in the TSX Composite Index, and 52 of the TSX60 Index companies.[3]. Adopting Say on Pay may also allow GWO to get ahead of proposed changes to the Canada Business Corporations Act (CBCA) which we expect will require a similar vote in the future.[4] 

Executive compensation disclosure has allowed shareholders to become better informed in respect to amounts paid or payable to Named Executive Officers, the circumstances under which payments will be made, and the reasons for specific compensation structure decisions. However, it does not allow shareholders to provide their views on compensation decisions directly via a vote.

In the absence of a Say on Pay vote at GWO, shareholders who do not support some or all aspects of the company’s executive compensation practices can only register this view indirectly by withholding their votes to re-elect directors to the Human Resources Committee.

Say on Pay will allow all shareholders the ability to clearly and unambiguously express their views regarding executive compensation by voting on it directly.

We urge shareholders to vote FOR this proposal.

[1] https://www.theglobeandmail.com/business/streetwise/article-shareholders-say-on-pay-to-have-strength-of-federal-law-behind-it/

[2] https://www0.gsb.columbia.edu/mygsb/faculty/research/pubfiles/25655/Final%20version%20plan%20format%20for%20ssrn%20with%20suggested%20citation.pdf

[3] https://share.ca/wp-content/uploads/2019/04/19-04-09-State-of-Say-on-Pay-in-Canada-FINAL.pdf

[4] https://www.theglobeandmail.com/business/streetwise/article-shareholders-say-on-pay-to-have-strength-of-federal-law-behind-it/

 

Lead Filer

Emma Pullman
B.C. General Employees’ Union (BCGEU)