Laulima Consulting Inc.

2024 BOARD GAMES: Earlier in December, the Globe & Mail released its annual study of governance practices at companies and trusts that make up the S&P/TSX Composite Index. The study scores companies out of 100 possible marks on a myriad of factors relating to board composition and oversight (45 marks), shareholding (13 marks), compensation (22 marks) and shareholder voting rights (20 marks). Climate disclosure and linkages to executive incentive plans are arguably the two most notable additions for 2024. Specifically, up to five (5) marks are now awarded for climate related disclosure and performance metrics in incentive plans. Some other changes help to reinforce or mirror recent proxy advisor and governance organization policies. For example, a new requirement that a member of a company’s audit committee is a current or former CPA or CFO is derived from Glass Lewis’ recent voting policies. A new criteria measuring how companies describe board oversight of cybersecurity risks also closely mirrors recent Glass Lewis policy. Scoring on share ownership guidelines was also revised to require that CEOs hold two times their total annual compensation in company shares (versus five times base salary, previously) in accordance with Canadian Coalition for Good Governance’s (CCGG) recent recommendations. Companies should continue to monitor their Board Games scorecard, focusing primarily on the recent changes as they can quickly become market norms. Certain criteria such as board composition and share ownership remain critical areas of focus. Other areas require careful consideration in light of company policy and regulatory developments – e.g., balancing the recent climate-related scoring with certain facets of Bill C-59’s anti-greenwashing provisions and the organizations existing approach to external reporting. https://lnkd.in/ex_TyEcA

With 2025 fast approaching, Laulima’s LTI survey reveals that one-third of companies are planning LTIP changes. Is your organization considering a change? Subscribe to our newsletter to participate in our future surveys: https://lnkd.in/grAWUVPE

Laulima’s LTI survey reveals how LTI mix varies across levels. Is your LTI mix well positioned to balance driving performance and supporting long-term retention? Subscribe to our newsletter to participate in our future surveys: https://lnkd.in/grAWUVPE

Laulima’s LTI survey reveals high prevalence of LTI among directors and managers at publicly traded companies. Is your total compensation package competitive enough to attract and retain the talent you need? Subscribe to our newsletter to participate in our future surveys: https://lnkd.in/grAWUVPE

How do you compete with publicly traded companies if you are private?   Laulima’s first survey focused on long-term incentives, with our initial finding highlighting the differences in LTIP targets between publicly traded and privately held companies. Subscribe to our newsletter to participate in our future surveys: https://lnkd.in/grAWUVPE

Can you pay for performance and still pay equitably? Read our latest point of view on pay for performance in the age of equity. We explore fairness, guardrails, and pay differentiation in the context of equity.