Meritas Mutual Funds is calling on the Big Five Banks to introduce a shareholder advisory vote on ececutive compensation.

Meritas Mutual Funds has filed a shareholder proposal with each of the five major Canadian banks calling on them to provide shareholders with the opportunity to vote on the pay package for their executives.  The vote would be non-binding, but would provide investors with the opportunity to review and comment on executive compensation at the banks.

"Canada lags the U.K. and the U.S. on this issue, and felt it was time for the issue to be brought to the attention of shareholders and boards, " said Meritas CEO Gary Hawton in an interview with the Globe and Mail.

Hawton told the Globe the banks were targeted to receive the first proxy resolutions because they are seen as corporate governance leaders that influence other companies.  Because the banks are widely held by the public, the resolution will have a big impact for investors in Canada, he said.

The resolution filed by Meritas notes that an advisory vote on compensation was introduced in the United Kingdom in 2002.  Citing research by corporate governance expert Stephen Davis, the resolution notes that the British rule has created a significant increase in the amount of total incentive pay with meaningful performance conditions attached.

In a commentary in the Vancouver Sun, Laura O'Neill, director of Law and Policy for the Shareholder Association for Research and Education (SHARE), which advises Meritas on shareholder engagement, said: "The advisory vote on executive compensation carves out a role for shareholders where none currently exists.  An advisory vote is our best bet to reign in excesses and link pay solidly to performance."

Information on the shareholder proposals is available at SHARE's shareholder resolution database at:

http://www.share.ca/en/shareholderdb

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