Our Executive Compensation Group's experience in executive compensation planning extends to a variety of areas, including:
- Equity incentive plans, including stock options, stock appreciation rights and restricted or deferred share units;
- Non-equity incentive plans, including pension or other supplementary retirement benefits;
- Pay-for-performance considerations;
- Non-competition, non-solicitation, confidentiality and severance provisions;
- Change of control protection;
- Intellectual property considerations;
- Acting as counsel to compensation committees;
- Dealing with third-party plan administrators and compensation consultants;
- Compliance with securities regulations and stock exchange rules; and
- Proxy-related issues.
We have a particular expertise in international executive compensation. We have worked with a variety of cross-border clients, compensation consultants and foreign counsel in the U.K., U.S. and throughout the world to address Canadian compensation considerations, accommodate differences in domestic securities, pension, tax and employee benefit regulation, and craft effective, integrated compensation schemes that address these concerns. In particular, our practitioners are sensitive to distinctions between Canadian and foreign tax regimes, which can affect the optimal mix of compensation arrangements in Canada as opposed to elsewhere. With offices throughout Canada, as well as in New York, London and Sydney, we are well-positioned to efficiently provide clients with customized solutions and expertise.
Developing Effective Contracts and Arrangements
Our cross disciplinary Executive Compensation Practice Group works with clients to develop strategies for executive compensation structures and draft and negotiate employment contracts and arrangements. Mitigation of risk in diverse areas of law is critical, requiring an experienced team with varied expertise and a thorough understanding of current market developments. Stikeman Elliott employs a multi-disciplinary approach to executive compensation legal services, with team expertise in the areas of securities law, corporate governance, employment, pensions and benefits and tax, coupled with a real-world understanding of business goals.
Mergers & Acquisitions and Change of Control Scenarios
Executive compensation, retention and severance issues are often highlighted in merger and acquisition transactions and other change of control scenarios. We work with clients, first, to draft strategic, comprehensive change of control provisions in executive employment contracts and then, in the context of transactions, to effectively negotiate and settle issues related to executive employment in the combined business entity. Our team is also experienced in identifying and addressing issues related to benefit plan liabilities and risks, as well as harmonizing compensation and plan structures and incentive arrangements.
Similarly, our extensive experience in complex cross-border M&A enables us to offer considerable advantages and expertise in dealing with international companies in the negotiation of executives' continuing employment relationships.
Dealing with Regulators
Executive compensation issues for public companies, which are often in the spotlight as proxy season approaches, continue to draw shareholder and media attention. Significant disclosure requirements imposed by the Canadian Securities Administrators, includng "say on pay", risk management, pay-for-performance, tax gross-ups, clawbacks and change of control payments continue to receive increased scrutiny.
Our Executive Compensation Practice Group includes lawyers who have been intimately involved in the development and drafting of Canadian securities regulation and governance initiatives. Stikeman Elliott has been retained to act on regulatory initiatives by many of the key rule-setters in the securities industry, including the Ontario Securities Commission, the Toronto Stock Exchange, the Investment Industry Regulatory Organization of Canada, as well as the Expert Panel on Securities Regulation formed by the Government of Canada to address the modernization of securities legislation. Several members of our team have worked directly with Canadian securities regulators, either full-time or on secondment. Our excellent relationships with these various bodies enable us to effectively assist clients in navigating regulatory pitfalls in the area of executive compensation.
Recent Group Activities
Now Available - Executive Compensation Guide for Canadian Officers and Directors
Canadian companies and those with connections to Canada face continued challenges with respect to executive compensation. Public and private companies alike are putting more resources than ever before into developing executive compensation plans that are attractive and tax-efficient while aligning executive and corporate interests and remaining consistent with a focus on shareholder value.
This revised Second Edition of Stikeman Elliott's Executive Compensation Guide reviews the common legal issues that typically arise in the context of executive compensation, including issues relating to securities law, employment law, taxation, pensions law and intellectual property. The guide is designed to help Canadian and international companies and their boards identify the main challenges to focus on as they develop executive compensation plans and policies. We hope that you and your company will find it useful.