In the normal course of our review of corporate disclosure and ongoing engagement with public company boards over the past several years, CCGG has noted an increasing prominence of non-GAAP performance measures in the incentive compensation programs (both short-term and long-term) of Canadian public companies. It is not uncommon for boards to apply the highest weighting to these unaudited and, often, adjusted measures when determining incentive compensation awards for senior management.
In an attempt to quantify the extent to which these measures are being used by boards to make important compensation decisions, CCGG undertook a study in early 2019 to review the compensation structures of a representative group of 100 public companies listed on the S&P/TSX Composite Index. This detailed review formed the basis for the development of a position paper. The position paper provides a summary of our study and includes recommendations for improved disclosure on the use of these measures by public company boards.
To read the position paper, click here.