Canadian Securities Regulators Propose New Rules For Executive Compensation Disclosure

Canadian securities regulators have proposed an overhaul of the disclosure rules for executive compensation to improve the quality and transparency of executive compensation disclosure. The proposed rules would require significant changes in disclosure and compensation-setting practices in Canada.

The proposed rules would replace the current requirements, introduced in 1994, which the regulators say have not kept pace with evolving disclosure practices and result in fragmented compensation information, making it difficult for investors to assess the total compensation paid to executive officers and to evaluate a key aspect of a company’s corporate governance.

Although the proposals are similar in substance to the rules recently adopted by the U.S. Securities and Exchange Commission, the proposed Canadian rules depart from the SEC rules in several important respects in an attempt to clarify and simplify those elements of the SEC rules that have been criticized as being confusing or