It’s hunting season, as activists and regulators open fire on Canada’s businesses

As AGM season arrives, much shareholder activism and regulatory intervention will be on display

The corporate hunting season is officially underway, an annual ritual during which shareholder parties, armed with proxies and other weapons of democratic destruction, set out to bag executives and directors for failing to deliver. The list of potential corporate failings is all encompassing. Anything and everything is a target, from executive compensation to diversity policies to return on equity, from investment strategies to social responsibility and whether there are an adequate number of people of varying genders in key positions. The scene for these hunting expeditions is the corporate annual meeting.

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As annual general meeting season arrives, many forms of corporate shareholder activism, accompanied by increasing regulatory interventions, will be on display. Executive compensation, say on pay, gender composition of boards, majority-voting requirements, mandatory board engagement with shareholders, withholding votes for certain directors, mandated ratios of independent directors. Some of this comes from regulators, some from the proxy advisory firms whose role is increasing, apparently because institutional investors are too dumb or disinterested to undertake their own analyses and make their own decisions.

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Executive compensation has long been touted as a problem in need of reform, as Montreal management consultant Yvan Allaire notes elsewhere in FP Comment today. Reform is one thing. But the objective of the CEO-to-worker comparisons is to spark a little Marxist unrest within the population, promote government action to further regulate and tax corporations and executives, and stimulate shareholder revolts at annual meetings.

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