On December 13, 2013, Glass Lewis (GL) published its 2014 Proxy Voting Guidelines for the upcoming proxy season for the U.S., Canada, the UK and Asia.  Some of the key updates are summarized below.  We recommend that readers review the entire Canadian document to determine the changes for 2014.

  • Changes to Pay for Performance Evaluation Model: The most significant change for the 2014 season relates to GL’s commencement of use of a proprietary pay for performance model to evaluate the pay of the top five executives at Canadian companies against four peer groups and across seven performance metrics. Companies will be scored with a letter grade (A-F), and this analysis will inform GL’s evaluation of compensation committee effectiveness and say-on-pay vote recommendation.
  • Advance Notice Policies: GL has specified that it will support advance notice policies that provide notice of not more than 70 days and not less than 30 days prior to the date of an annual meeting, and will consider recommending that shareholders vote against advance notice provisions that deviate from this time frame. This is a departure from last year’s GL policies that supported advance notice policies that provided notice of not more than 65 days and not less than 30 days prior to the date of the annual meeting.
  • Auditor Rotation: GL states that it will support proposals to require auditor rotation when a reasonable period of time is used (not less than 5-7 years), particularly at companies with a history of accounting problems to help ensure independence of the auditor and the integrity of the audit.

A copy of 2014 Updates can be accessed here.