Canada regulators eye better disclosure on exec pay

Proposals consider recent regulations in the U.S. and risks related to pay policies
By John McCrank
|Canadian Payroll Reporter|Last Updated: 11/23/2010

(Reuters) - Canadian securities regulators put forward a set of proposals on Friday that would make the disclosure of executive compensation clearer and more transparent, saying the requirements would benefit both investors and corporations.

The Canadian Securities Administrators (CSA) -- an umbrella group of regulators from the 10 provinces and three territories -- said the proposals would lead to more informed investors, and assist companies in fulfilling their obligations on disclosing executive compensation.

Leslie Byberg, director of corporate finance at the Ontario Securities Commission, said the proposals resulted in part from a review of corporate disclosure requirements that regulators put into place a couple of years ago.

"We went out and looked at 70 companies to see how they were interpreting and applying and making disclosures under those requirements ... and we found some areas that could be improved and some areas that we could clarify," she said in an interview.

She said the proposals also take into account recent developments on disclosure regulations in the United States by the Securities and Exchange Commission and under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Under the 2010 SEC Amendments, companies must show investors an analysis of risks related to the way they pay executives. Additional disclosures on equity-based awards and services provided by compensation advisers are also required.

The CSA proposal would require companies to disclose to investors any sort of risk associated with the policies and procedures used to compensate their executives.

"It's really to enhance investors' overall picture of the risks in governance and compensation approaches of the companies they might want to invest in, or the companies they already own," Byberg said.

"First and foremost, this is about giving investors good information to help them make informed decisions about these things that are very important to them."

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