We permit the publication of our auditors’ report, provided the report is published in full only and is accompanied by the full financial statements to which our auditors’ report relates, and is only published on an access-controlled page on your website, to enable users to verify that an auditors’ report by independent accountants has been commissioned by the directors and issued. Such permission to publish is given by us without accepting or assuming any responsibility or liability to any third party users save where we have agreed terms with them in writing.

Our consent is given on condition that before any third party accesses our auditors’ report via the webpage they first document their agreement to the following terms of access to our report via a click-through webpage with an 'I accept' button. The terms to be included on your website are as follows:

I accept and agree for and on behalf of myself and the Trust I represent (each a "recipient") that:

  1. PricewaterhouseCoopers LLP (“PwC”) accepts no liability (including liability for negligence) to each recipient in relation to PwC’s report. The report is provided to each recipient for information purposes only. If a recipient relies on PwC’s report, it does so entirely at its own risk;
  2. No recipient will bring a claim against PwC which relates to the access to the report by a recipient;
  3. Neither PwC’s report, nor information obtained from it, may be made available to anyone else without PwC’s prior written consent, except where required by law or regulation; and
  4. PwC’s report was prepared with Hermes Property Unit Trust's interests in mind. It was not prepared with any recipient's interests in mind or for its use. PwC’s report is not a substitute for any enquiries that a recipient should make. The financial statements are as at 25 March 2017, and thus PwC’s auditors’ report is based on historical information. Any projection of such information or PwC’s opinion thereon to future periods is subject to the risk that changes may occur after the reports are issued and the description of controls may no longer accurately portray the system of internal control. For these reasons, such projection of information to future periods would be inappropriate.
  5. PwC will be entitled to the benefit of and to enforce these terms.
I accept

1. Select your country

  • United Kingdom
  • Austria
  • Australia
  • Belgium
  • Denmark
  • Finland
  • France
  • Germany
  • Iceland
  • Ireland
  • Italy
  • Luxembourg
  • Netherlands
  • Norway
  • Singapore
  • Spain
  • Sweden
  • Switzerland
  • USA
  • Other

2. Select your investor type

  • Financial Advisor
  • Discretionary Investment Manager
  • Wealth Manager
  • Family Office
  • Institutional Investor
  • Investment Consultant
  • Charity, Foundation & Endowment Investor
  • Retail Investor
  • Press
  • None of the above

3. Accept our terms and conditions

By clicking Proceed I confirm I have read the important information and agree to the terms of use.


The Hermes Investment Management website uses cookies to remember your preferences and help us improve the site.
By proceeding, you agree to cookies being placed on your computer.
Read our privacy and cookie policy.

A watershed year for say-on-pay in Canada

Home / EOS Blog / A watershed year for say-on-pay in Canada

Bill Mackenzie, Senior Adviser

With no regulatory requirement for an advisory vote on executive compensation in Canada, companies that were early voluntary adopters of the vote believed they were doing most things ‘right’ and in line with shareholder interests.

Majority votes against
Among the first adopters in Canada were the country’s five largest banks. These publicly traded entities have been leaders in adopting performance-based, long-term compensation plans. But the generous CAD16.6 million exit package awarded to a former Canadian Imperial Bank of Commerce (CIBC) CEO caused uproar among shareholders regardless of the bank’s otherwise acceptable pay practices. Despite some last minute attempts at damage control by the bank’s investor relations, shareholders expressed their disapproval via its say-on-pay vote in April, with 57% of votes cast against CIBC’s approach to executive compensation. This is a big change from the 3.8% opposition seen in 2014, which indicates that shareholders have decided that the advisory vote on pay is the right medium for delivering a formal message to the compensation committee and the board.

Another early adopter of a shareholder advisory vote on pay was Barrick Gold. At its 2015 AGM shareholders overwhelmingly opposed Barrick’s approach to executive compensation. The chair’s pay package of $12.9 million was difficult to link to any particular measure of corporate performance, which is why 73% of votes were cast against the management proposal. Although we too had concerns about pay and robustly argued these with the chair, we supported management on the proxy by exception due to access to the chair and an ongoing dialogue which reflected an understanding and desire of the chair to win back the support of long-term investors and make appropriate changes in the future. The chair has also demonstrated his commitment to the company by investing every after-tax dollar he has earned on the job directly in Barrick shares.

After adopting an advisory vote on executive compensation in 2012, Yamana Gold became the third large publicly traded Canadian company to suffer a majority of votes against its approach to executive compensation this proxy season. At the heart of the issue were the large cash bonus and performance shares awarded to the CEO on the closing of an acquisition. Again, Yamana’s damage control, which included the CEO’s forfeiture of the performance shares granted to him in connection with the acquisition, was not enough to turn the tide as the final advisory vote tally amounted to 63% against.

Finding their voice
With the directors of the respective compensation committees in each of these three cases receiving dissenting votes of 25% or lower, shareholders seem to have found their voice through the advisory vote on pay. The cases outlined above suggest to us that 2015 is a watershed year for the say-on-pay vote in Canada. While the potential for an embarrassing result may stop other companies from voluntarily adopting the advisory vote on pay, we strongly suggest otherwise.

As the severity of shareholder dissent over a compensation issue cannot usually be forecast until days before the proxy deadline, companies must accept that it is better to lose an advisory vote than – in the absence of such a vote – see valuable board members voted out because they serve on their compensation committee.

Share this post:
Bill Mackenzie Senior Adviser William (Bill) Mackenzie joined Hermes EOS as a senior adviser and its representative in Canada in January 2009. He is a member of the investment committee and the responsible investment working group of the United Church of Canada Pension Fund. Until 2009, Bill was director of special projects with the Canadian Coalition for Good Governance (CCGG) and continues to be involved in the activities of the CCGG, including its public policy committee, as a representative of Hermes EOS. Prior to working with the CCGG, Bill was president of Institutional Shareholder Services Canada and its predecessor Fairvest Corporation. Bill’s career in corporate governance spans over 28 years and he continues to promote corporate governance and responsible investment in Canada through his participation on various industry committees and boards, writing articles and speaking at conferences. Bill earned the ICD.D designation of the Institute of Corporate Directors in 2004 and has a diploma in Business Administration from Ryerson Polytechnical University.
Read all articles by Bill Mackenzie

Find posts by author

  • Alex Knox, ACA
  • Amy Wilson
  • Andrew Jackson
  • Bill Mackenzie
  • Bruce Duguid
  • Christine Chow
  • Claire Gavini
  • Colin Melvin
  • Darren Brady
  • Dominic Burke
  • Dr Michael Viehs
  • Emeric Chenebaux
  • Emma Hunt
  • Geoffrey Wan, CFA
  • Hans-Christoph Hirt
  • Harriet Steel
  • Ilana Elbim
  • Ingrid Holmes
  • Jaime Gornsztejn
  • Jonathan Pines, CFA
  • Joseph Buckley
  • Justine Lutterodt
  • Leon Kamhi
  • Louise Dudley
  • Mark Sherlock, CFA
  • Maxine Wille
  • Michael Russell, CFA
  • Michael Vaughan
  • Michael Viehs
  • Natacha Dimitrijevic
  • Nick Spooner
  • Nina Röhrbein
  • Peter Hofbauer
  • Philip Nell
  • Rochelle Giugni
  • Roland Bosch
  • Sachi Suzuki
  • Saker Nusseibeh
  • Silvia Dall’Angelo
  • Tatiana Bosteels
  • Tim Goodman
  • Tommaso Mancuso
  • Yasmin Chowdhury

Find posts by category

  • environment
  • eos
  • governance