08:16:59 EDT Thu 28 Mar 2024
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Globe says SEC eyes Canadian compensation practices

2015-07-22 08:14 ET - In the News

The Globe and Mail reports in its Wednesday edition the U.S. regulatory hangover from the 2008 financial crisis is still with us and it frequently affects companies based in Toronto, Vancouver or Hong Kong just as much as it does those based in New York or Los Angeles. Guest columnists Steven Bank and George Georgiev write the U.S. Securities and Exchange Commission served up a powerful new example earlier this month. It proposed far-reaching rules on bonuses and other incentive-based compensation for all firms listed on U.S. stock exchanges, which include about 300 of Canada's best-known multinationals. This was a curious choice since the United States has traditionally allowed non-U.S. companies to follow their home country rules on executive compensation and corporate governance instead of the SEC's rules. The SEC's new rules are likely to prove expensive, counterproductive and easy to manipulate. Unfortunately, the link between pay and performance remains as elusive as ever. The new SEC rules call for the mandatory repayment (clawback) of incentive pay already awarded to executives. The rules cover payments to a large class of current and former executives going back three years.

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