Cambridge, Ontario-based Meritas Mutual Funds will again file "say on pay" proposals at Canada's top banks, fund officials recently disclosed. The decision to file for 2009 follows a successful campaign earlier this year when average support for the non-binding resolution amounted to 40.5 percent support at the country's five largest banks.
The fund is targeting eight issuers in 2009, including the five banks. They are: Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Nortel Networks, Royal Bank of Canada, Sun Life Financial, Toronto-Dominion Bank, and TSX Group -- operator of the Toronto Stock Exchange and Montreal Futures Exchange.
"Canada's largest issuers provide their shareholders with solid, and ever-improving, executive compensation disclosure, but no efficient and inclusive way to respond to the decisions that have been made by the board on their behalf," fund CEO Gary Hawton said in a statement. "If that disclosure was to ever bring a real problem into sharp focus, shareholders need to be able to do more than read about it. They need equal access to comment about it and the most efficient way to do so is through a vote."
None of the banks that faced the proposal this year agreed to allow for a vote, though each "indicated that it would monitor shareholder views on the matter," the fund noted in a press release. Bank of Montreal, for one, indicated it would make a "final recommendation to shareholders" on the matter in advance of its 2009 annual meeting.
Hawton predicts strong results in 2009, given support levels of 40 percent or more at some banks earlier this year. He is cautioning targeted companies against rejecting adoption of the proposal only to find investors give majority support to the resolution come the annual meeting.