Ontario Teachers’ Pension Plan (OTPP), Toronto, is in favor of having say-on-pay votes at companies every three years to avoid focusing on short-term objectives, Pensions & Investments reports. The annual advisory vote on compensation may force boards to adjust compensation programs every year to demonstrate that they are effectively managing the compensation process.
Companies are required to put the say-on-pay frequency question to a non-binding shareholder vote at least every six years, the first coming in 2011. OTPP also backs disclosure by companies of policies, allowing executives to cut their equity share ownership by either pledging their equity holdings to secure personal loans or margin accounts or hedging all or part of their equity holdings and disclose which executives or directors are doing so.
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