Use of Non-GAAP measures in executive compensation

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Dec 19, 2019

On December 19, 2019, the Canadian Coalition for Good Governance (CCGG) released a position paper provides that provides a summary of their study to review the compensation structures of a representative group of 100 public companies listed on the S&P/TSX Composite Index and includes recommendations for improved disclosure on the use of these measures by public company boards.

In the normal course of our review of corporate disclosure and ongoing engagement with public company boards over the past several years, CCGG has noted an increasing prominence of non-GAAP performance measures in the incentive compensation programs (both short-term and long-term) of Canadian public companies. It is not uncommon for boards to apply the highest weighting to these unaudited and, often, adjusted measures when determining incentive compensation awards for senior management.

Review the press release and position paper on the CCGG's website.

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