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Three Canadian Banks Agree to Hold Pay VotesSubmitted by: Ted Allen, Publications, and Michelle Tan, Canada Research

The Canadian Imperial Bank of Commerce (CIBC), the Royal Bank of Canada (RBC), and the National Bank of Canada (NBC) all have agreed to hold an annual advisory vote on executive pay in 2010, becoming the first Canadian companies to do so.

CIBC and RBC announced the policy changes after shareholder proposals on the subject received majority support from investors--which rarely happens in Canada--at their annual meetings on Feb. 26. Bill Etherington, chairman at CIBC, said the bank would work with the proponents--MEDAC (Mouvement d?éducation et de défense des actionnaires) and Meritas Financial--as well as ?other governance? organizations, and any other interested banks, in determining how a management pay-vote proposal would be drafted. At RBC, chairman David O'Brien said the board ?will now be considering how best to give shareholders a vote on this important issue, and we commend those who brought the 'say on pay' proposals forward,? according to The Globe and Mail newspaper. NBC agreed to provide a compensation vote in 2010, one day before its Feb. 27 meeting, where investors were to vote on the MEDAC request for an advisory vote. ?In so doing, the bank is acknowledging the developments of the past few weeks relating to this matter and fulfilling a wish expressed by many of its shareholders,? the Montreal-based bank said in a statement.

The moves by three of Canada's largest banks come as bank executives face investor criticism over bonuses. The banks, which hold their annual meetings early in the Canadian proxy season, traditionally have had a significant influence on the corporate governance practices at other firms.

Full post as published by Institutional Shareholder Services -- Corporate Governance Blog on March 04, 2009 (boomark / email).