Update on the 2020 AGM member proposal
At the September 2020 AGM, four member proposals were submitted regarding salary disclosures. While three of the proposals were not carried, CIRA members voted in favour of the following motion from a member proposal:
CIRA should disclose CEO compensation – base salary, all bonuses, all benefits, including severance package terms – as set out in CIRA’s annual statements.
This member proposal is advisory and non-binding. Members voted in favour of this motion by a margin of 49% in favour, 44% against and 7% abstain.
As an outcome of this vote, the CIRA board of directors committed to reviewing the impact of CEO salary disclosure, and to come back to the CIRA membership on this issue.
The Board carefully considered the request from membership, as well as the interests of all stakeholders, consistent with the board's responsibility of duty of care. Since the last AGM, the CIRA board has consulted with the third-party compensation expert Mercer (Canada) Limited to evaluate CIRA’s approach to executive compensation against best practices in comparable organizations. The board also evaluated the impact of salary disclosure on employee privacy and ensuring CIRA’s ability to attract and retain top talent in a competitive environment.
Mercer (Canada) Limited concluded that unless required for regulatory and/or compliance purposes, commercial non‐profit organizations operating in dynamic, competitive and knowledge‐intensive marketplaces (such as CIRA) generally do not publicly disclose executive compensation frameworks and details. As such, executive salary disclosure cannot be said to be a best practice in this area.
After extensive and robust discussions, the board has decided that CEO salary disclosure is not in CIRA’s best interests. The board believes that CIRA should follow best practices with respect to disclosure of CEO compensation The Mercer (Canada) Limited report confirmed the Board’s reasons for not disclosing this information. In addition to the risks that disclosure would present to talent retention and attraction, a further consideration includes the privacy of compensation information. The board believes, based on an additional report by external legal counsel, that disclosing the salaries of individual employees without their consent would be a breach of their privacy. This would be the case for long‐standing key employees, who never contemplated that their salaries would be made public when they accepted employment with CIRA.
The board is appreciative of the membership for expressing their views and recognizes the membership’s desire for improved transparency in this area. Based on recommendations from its external expert, CIRA has provided further details regarding the process for setting executive compensation, to provide the membership with additional insight on the philosophy and methodology used in setting executive salary at CIRA. Beyond that, however, it is the board’s belief that further disclosure would breach employees’ privacy rights and, in this challenging labour market, could inhibit the organization’s ability to attract new and retain existing talent.