Coast Capital Savings, a large credit union in British Columbia, Canada, this month published a review of its directors’ remuneration.
Following recommendations from the credit union regulator in British Columbia for credit unions to strengthen corporate governance, Coast Capital Savings established a task force to review directors’ remuneration. A voluntary group of seven people drawn from the credit union’s 500,000 members formed the task force, reviewing detailed evidence and hearing from experts to propose a new approach to director compensation.
The task force’s report concluded that: “The membership of Coast Capital Savings recognises the importance of attracting and retaining a high quality and dedicated board of directors.
“Our directors must have the experience, skills and credentials required to develop and achieve Coast Capital Savings’ strategic plan. We must, therefore, offer a level of remuneration that both reflects our co-operative heritage and makes us competitive in the marketplace.
“Director remuneration will be proportional to a consistent peer group of Canadian financial services institutions of similar size and complexity.”
The task force’s main recommendations were:
• At three-year intervals, the board of directors will engage members and an independent compensation consultant to evaluate director remuneration.
• As Coast Capital Savings operates within a complex national financial services sector, scope for comparators within the peer group is national.
• The comparators include financial services institutions of similar size and complexity including: credit unions, trust companies, insurance companies and banks.
• Comparator companies are similar in size as measured by revenues and assets under management.
• All members will be advised of the identity, selection rationale and any changes to the peer group.
• Within seven years, the philosophy on director remuneration will be reviewed by members and the board with the support of an independent compensation consultant.
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