“Prescribed corporations” under the federal Canada Business Corporations Act (CBCA) would have to develop a remuneration approach, disclose remuneration and diversity information, and hold an annual nonbinding shareholder “say-on-pay” vote under Bill C-97. The legislation, which includes provisions to implement the 2019 federal budget, is expected to receive royal assent in June. Implementing regulations will need to be developed and subject to consultation.
The bill would require “prescribed corporations” to develop a remuneration approach for senior management. At the annual meeting, corporate directors would have to disclose:
Shareholders would have a nonbinding “say-on-pay” vote on the remuneration approach at the annual meeting. Corporations would need to disclose the vote results. Canada currently doesn’t have any legal requirement to hold a say-on-pay vote, although an increasing number of organizations hold voluntarily advisory shareholder votes on executive compensation. Many Canadian companies reportedly have implemented clawback policies as well.
Bill C-97 reiterates the diversity disclosure requirements for public CBCA companies included in Bill C-25, which received royal assent on 1 May 2018 and could take effect later this year. Draft regulations to implement the 2018 law would require companies to disclose the representation of “designated groups” within senior management. As defined by the Employment Equity Act, designated groups include women, “visible” (nonwhite) minorities, indigenous people and people with disabilities.