New rules shine light on executive pay

U.S. SEC rules apply to some Canadian companies, but home-grown rules will soon follow
By Uyen Vu
|Canadian HR Reporter|Last Updated: 12/19/2006

A number of Canadian companies may have to go back to the drawing board to rethink how they pay their executives in light of new disclosure rules in the United States that take effect this month.

The new rules, put in place by the Securities Exchange Commission (SEC), will affect some Canadian companies that are traded in stock exchanges on both sides of the border. Those companies that escape the reach of the SEC, however, had better prepare to comply with similar rules as the Canadian securities authorities are expected to follow suit in the new year.

The Canadian Securities Authority, an umbrella group of provincial securities regulators, has been redrafting compensation disclosure rules, and “although they don’t want to be exactly like the Americans, I know they’ll take a lot of what the SEC has published as their rules and Canadianize them,” said Bob Levasseur, a senior consultant at Watson Wyatt who specializes in executive compensation.