Canadian Group Opposes 'Say on Pay'

New regulations or mandatory shareholder votes on executive compensation aren't necessary, since Canadian corporate boards are better positioned to decide on these matters, says a group set up by some of the country's largest institutional investors.

The Canadian Coalition for Good Governance, which represents 49 institutional investors with a combined $1 trillion in investments under management, said yesterday it won't support "any regulatory changes or recommend universal backing for resolutions" that would introduce mandatory, non-binding, shareholder votes on executive pay.

The coalition said Canadian companies have already improved executive pay practices, addressing disclosure issues and improving shareholder involvement.

"It is the role of the board, and in particular the compensation committee, to establish appropriate executive compensation plans that clearly align the interests of shareholders and management," David Beatty, managing director of the coalition, said in a statement.

"By working constructively with corporate Canada, organizations like ours can provide perspective on the difficult balance between market forces and shareholder interests in the arena of executivepay but it is not our role to find that balance."