Pay Disparity

Resolution Text

RESOLVED: Shareholders of Canadian National Railway Company request the Board’s Human Resources and Compensation Committee initiate a review of our company’s executive compensation policies and make available, upon request, a summary report of that review by December 31, 2021 omitting confidential information and processed at a reasonable cost.

We request that the report include:

1) the percentage gap between the median pay of employees and named executive officers, including base salary and bonus and equity compensation for calendar years 2010, 2015 and 2020;

2) an analysis of any changes in the relative size of the gap and reasons for trend(s) identified;

3) a discussion of whether sizable layoffs or the level of pay of our lowest paid workers should result in an adjustment of senior executive pay, and

4) how the Corporation will monitor these issues annually in the future.  

Supporting Statement: Large disparities between the compensation of executives and workers can diminish the value of a company by lowering employee morale and productivity, increasing staff turnover, and lowering profitability. A recent research report by MSCI found that companies with lower intra-corporate pay gaps performed better in terms of average profit margins across the vast majority of sectors.[1] 

In the past three years, there has been a general upward trend in senior executives’ total compensation, made up of salary, share-based awards, option-based awards, non-equity incentive plan, and all other compensation.

In November 2019, our company announced layoffs in the midst of a “weakening of many sectors of the economy”.[2] We believe the proposed report would provide important information on the company’s compensation strategies for all of its employees, and enhanced insights for investors on pay philosophy and the goals embedded in the distribution of pay across the entire company. 

Additionally, the proposed report will help shareholders understand whether the executive-to-worker pay gap comes at the expense of the wellbeing of the company’s workforce and whether the gap should be decreased to avoid cuts to wages and/or benefits that might harm the company’s performance over the long term.

We urge shareholders to vote FOR this proposal.

 

 

 

[1] https://www.msci.com/www/research-paper/income-inequality-and-the/0337258305

[2] https://globalnews.ca/news/6175142/cn-rail-layoffs-furloughs/
https://www.theglobeandmail.com/business/article-cn-rail-to-lay-off-1600-employees-amid-weakening-economy-trade/

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Lead Filer

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