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Canadian Centre for Policy Alternatives releases report highlighting increased executive officer compensation during Covid

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Sep 30, 2021

The Canadian Centre for Policy Alternatives (CCPA) released its report "Boundless Bonuses: Skyrocketing Executive Pay During the Pandemic", which reviewed Named Executive Officers compensation for 209 publicly traded companies on the TSX Composite Index.

Executives across these companies are paid through multifaceted compensation programs where “salary” is typically the smallest component of overall pay. Beyond salaries and pensions, the rest of their pay is generally made up of “pay for performance” bonuses, which is hypothetically based on how the company is doing. The performance measures differ by company but can include revenue, profit or stock price goals and they can also include things like low workplace deaths and how much employees like working for a company.

They found many executive officers in Canada actively benefited from the pandemic—either because their companies were on the right side of COVID-19 and made a profit from it or because their bonus formulas were changed.

For the Canadian Coalition for Good Governance's (CCGG) ongoing engagement and policy priority with respect to the use of non-GAAP measures in executive compensation was the observed practice of excluding poor financial results from determinations of executive compensation or “adjusting away the impacts of the pandemic”.  While expressly not impugning the practice of the use of non-GAAP measures in executive compensation, since releasing its position paper in late 2019, CCGG has been incorporating discussions of their use by boards during engagements, advocating for greater oversight and transparency as to how boards consider and implement adjustments for the purposes of compensation, paying particular attention to patterns of only “adjusting away” financial measures with negative performance implications.

Review the press release and report on the CCPA's website.

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