Corporate harassment, from exec compensation to diversity – by Terence Corcoran (National Post – April 28, 2015)

The National Post is Canada’s second largest national paper.

Annual shareholder meetings of major corporations have never been of much practical use to investors. Certain legal requirements are fulfilled, the CEO reviews the corporation’s affairs with great flair or thudding dullness, depending on personality. Questions are taken from shareholders, results of proxy votes announced, and then the chair invites everyone for light refreshments before declaring the meeting terminated.

That still happens, but meetings have also recently been hijacked by corporate governance activists who have turned many annual shareholder events into meaningless ideological skirmishes. First it was executive compensation issues, but diversity is rising fast through the activist network of corporate harassment.

The CIBC annual meeting last week in Calgary turned into a spring against the bank’s executive compensation regime, particularly money paid to former CEO Gerald McCaughey and former COO Richard Nesbitt. As part of the now mandatory but non-binding “say-on-pay” resolution, shareholders voted 57 per cent to 43 per cent against the bank’s approach to executive compensation.

Rebellion fever runs high in anticipation of the Barrick Gold annual meeting in Toronto Tuesday. A large say-on-pay vote against the corporation is expected, mostly from the government-backed institutional pension industry that has decided it doesn’t like the pay Barrick has awarded John Thornton, the man who succeeded Peter Munk as chair of the company.

One could conceivably get exercised about executive compensation–if there were some evidence that the public dimension of the issue has some relevance to corporate performance. In fact, it matters not what the nominal value of Mr. Thorton compensation has been, is, or will be at Barrick, just as the cash money paid to top bankers at CIBC is of little consequence to the fortunes of the bank, its shareholders or the bank’s earnings.

Taken out of the context of corporate management, personalities, institutional circumstances, competitive issues, competence, and the complex business of making corporate decisions, the raw numbers carry no worthwhile information—unless one is in the income inequality business or part of the fake capitalism at the heart of Canada’s vast government-run pension industry.

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