Enhanced Executive Compensation Disclosure

With the annual financial and meeting season for reporting issuers upon us, you should be aware that changes have been made to Form 51-102F6 Executive Compensation Disclosure

In summary, the changes require:

  • enhanced disclosure of performance goals;
  • enhanced disclosure regarding potential changes in compensation policies and practices in the next financial year;
  • enhanced disclosure of risk oversight management by the Board;
  • disclosure of whether the Board has a policy forbidding directors or NEO’s from purchasing various derivative instruments;
  • enhanced disclosure regarding the compensation committee and use of compensation consultants;
  • a different method of calculating the value of any options awarded;
  • additional disclosure in tables showing incentive plans awards for both directors and officers.

These changes are in effect for all reporting issuers preparing, filing or sending information for periods relating to financial years ending on or after October 31, 2011.

Reporting issuers will not be able to simply update the information in the Executive Compensation Disclosure portion of their previous annual information circulars this year.  Substantial portions of the Executive Compensation Disclosure will have to be rewritten or added to accommodate these new requirements.  Additionally, of course, reporting issuers should implement procedures to reflect the requirements inherent in the additional disclosure or be prepared to explain why such procedures are not required at this time.

How Momentum Can Help

We have a draft generic Executive Compensation Disclosure insert that incorporates the basic requirements of the revised form 45-106F6.  Please contact me if you would like to discuss.

Special thanks to my colleague, Dave Lowdon, for providing the content of this post and keeping me up to date on public company disclosure!http://www.perlaw.ca/en/people/david-lowdon