Pay for CEOs of Canada’s largest companies has soared, according to a report from U.S. proxy advisory firm Glass Lewis & Co.
The report, which reviewed the initial results of the 2024 proxy voting season, said chief executives with S&P/TSX 60 firms received a 16% raise from the previous year.
“Median total CEO pay for the S&P/TSX 60 in 2024 was $11.5 million,” Glass Lewis stated.
Median CEO pay went up in the U.S. too, but more modestly than in Canada.
The report stated that CEO compensation rose by 6.2% for S&P 500 companies, and was up by 3.3% for constituents of the Russell 3000 index.
Despite the upward momentum in CEO pay, U.S. shareholder opposition to companies’ say-on-pay proposals declined, particularly at larger companies.
In 2024, 37 say-on-pay proposals failed to receive majority shareholder support, down by about 41% from 2023, Glass Lewis found.
“This trend was particularly pronounced among the largest companies, as the number of failed S&P 500 say-on-pays fell dramatically to its lowest level since the pandemic, from 11 in 2023 to four in 2024,” the report said.
Among Canadian companies, three say-on-pay proposals failed to receive majority support — with two of those at companies that also saw failed proposals last year.
The report also noted a divergence between Canada and the U.S. regarding board elections, “with fewer failed directors in the U.S. but more in Canada for the second year in a row.”
In Canada, nine director nominees failed to receive majority support in 2024, up from seven in 2023 and three in 2022.
Four of the nine failed nominees were at a mining exploration company “with a multitude of governance issues, including insufficient attendance and disclosure, lack of independent board leadership, and gender diversity concerns,” the report said.
As for the continued use of virtual shareholder meetings, “many investors are calling for a return to in-person meetings,” the report said. More than half of U.S. companies and more than a third of Canadian companies used virtual meetings this year.
“Notably, three of the six shareholder proposals at Canadian S&P/TSX 60 companies requesting the reintroduction of a physical element to the [annual general meeting] received majority shareholder support,” Glass Lewis reported.
Finally, in terms of diversity disclosure, the report indicated 88% of S&P/TSX 60 companies “provided clear disclosure regarding racial/ethnic diversity on the board.” Average ethnic/racial diversity for these boards was 16.9%, and 16 companies had boards that were at least 20% ethnically diverse.
In the U.S., racial and ethnic diversity on the boards of S&P 500 companies “increased from an average of 23.4% in 2023 to 25.3% in 2024. A similar increase was found among Russell 1000 companies, where the racial and ethnic diversity on the board increased from 22.1% in 2023 to 24% in 2024.”
In terms of gender, North American boards are improving their diversity, the report said.
The largest Canadian companies average almost 40% women directors, and “gender representation in U.S. board leadership positions also continued to increase, with women representing more than 30% of all key committee (nominating/corporate governance, audit, and compensation) chair positions. In Canada, one in five board chair positions are held by women,” Glass Lewis found.