TSX60 Say on Pay Votes

Fall Update

In June, Laulima shared a preliminary analysis of the 2024 Say on Pay (SOP) votes within the TSX60, noting an upward trend in shareholder support for executive compensation. This fall update further confirms that trend, now backed by complete vote data.

Findings from the Full Sample

• 43 companies received over 90% support in both 2024 and 2023.
• Only 4 companies received below 80% support in 2024, down from 7 in 2023.
• One failed vote was recorded in 2024, compared to 2 in 2023.
• Energy continues to lead with the highest average support (94.6% in 2024), despite a slight dip from the previous year (95.4% in 2023).
• Financials experienced a small increase from 92.2% to 94.9%.
• Materials increased from 83.9% to 91.1%, noting that the year-over-year increase is largely due to Agnico Eagle Mines improving significantly in 2024.

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Votes Below 80%

Companies that garner less than 80% support often face criticism for issues such as a disconnect between executive pay and company performance, the use of large one-time awards, and/or the lack of transparent disclosure.

The following problematic pay practices and disclosure are highlighted below:

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Notable Year-over-Year Changes

Say-on-pay votes can vary on a year-over-year basis due to executive compensation adjustments, shifting company performance, and shareholder engagement. Significant changes often result from actions taken to address prior concerns or a disconnect between pay and performance.

Responses to Shareholder Feedback

• Agnico Eagle Mines engaged shareholders, eliminated special bonuses, and shifted to a performance-based structure with a focus on PSUs.
• Restaurant Brands engaged shareholders and introduced a cap on PSU payouts if TSR is negative.

Shareholder confidence in executive pay within the TSX60 remains strong, driven by factors such as increased shareholder outreach, a continued shift towards performance-based long-term incentives, and the growing use of ESG/DEI metrics in executive incentives.

For more information, contact us at info@laulimaconsulting.com.

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