‘Say on pay’
HBC shareholders challenge exec renumeration and company’s real estate plans
Hudson’s Bay Company faced a fight from some of its most prominent investors Tuesday over its decision to award executives with multimilliondollar pay packages despite two years of weak sales and sizable losses for the retailer.
The Ontario Teachers’ Pension Plan, British Columbia Investment Management Corp. and the California Public Employees’ Retirement System (CalPERS) said they voted against the company’s remuneration practices that include a $54.8 million pay package for the retailer’s executive chairman Richard Baker.
The “say on pay” vote — a nonbinding motion that is growing in popularity at Canadian companies and aimed at collecting shareholder feedback — took place at the company’s annual general meeting in Toronto and ended in the executives’ favour.
However, CalPERS spokesman Mike Osborn said in an email “we don’t feel the company sufficiently linked pay with performance” and Teachers’ said in its proxy vote statement that “in this case, we do not feel that the awards have been sufficiently justified.”
Baker’s compensation includes more than $37 million in share-based awards and more than $16.6 million in option-based awards. The company’s other executives are due to earn totals between $1.4 million and $9.4 million, according to HBC’s information circular.
After the vote passed, one shareholder in the audience criticized Baker’s remuneration saying, “It is one thing to award a package. It is another to accept it and so I think accepting it reflects on (Baker)’s character, who not so long ago said the fair value was twice where these payouts are.”
The shareholder called on Baker to address the issue, to which Baker replied “We appreciate your question. Thank you.”