A guide to using the CEO scorecard

A WEALTH OF NAMES AND NUMBERS AWAITS. HERE’S A KEY TO OUR CATEGORIES, CRITERIA AND ASSUMPTIONS RANK:

Companies are ranked based on their total two-year return to investors (see “2-Year Return %”).

CEO(S):

All chief executives must have been in office for 18 months as of the end of Aug. 2, 2019. Where a company has not named a CEO, the highest-ranking corporate manager is included instead.

COMPANY:

Companies must be on the S&P/ TSX Composite as of Aug. 2, 2019, have $500 million in annual revenue and a market cap of $1 billion as of the same date, with data sourced from Bloomberg. Companies must also have been publicly traded since Aug. 2, 2017, and reported executive compensation for the past two fiscal years.

2-YEAR RETURN %:

The scorecard’s standard period of measurement is two years, representing the company’s return to investors from Aug. 2, 2017, through Aug. 2, 2019. This includes the change in its share/ unit price (adjusted for splits and consolidations), as well as dividends and distributions.

INDUSTRY INDEX:

The S&P/TSX index associated with the company’s operations.

2-YEAR INDEX CHANGE %: The change in a particular industry index.

REVENUE:

Gross revenue is reported for the past two fiscal years, generally fiscal 2018 and 2017, based on data published by Bloomberg.

CEO COMPENSATION: Figures reflect the compensation paid to individual occupants of the top management position. In some cases, where more than one person held the office during the two-year period, figures are pro-rated to reflect the total paid to those CEOs, and includes any exit payments. Where companies have co-CEOs, compensation is the total received by both individuals. Where necessary, compensation figures have been converted to Canadian dollars using either the stated exchange rate in a company’s proxy statement or, if such information was not readily available, the Bank of Canada average exchange rates for 2018 and 2017.

SALARY:

Base salary paid during the previous two fiscal years, generally 2018 and 2017, based on data published by Bloomberg and company proxy statements.

OTHER:

Includes all other forms of compensation, such as annual bonuses, long-term incentive plan payments, deferred share grants, car allowances, pension contributions, insurance premiums, interest-free loans and other perks, based on data published by Bloomberg and company proxy statements.

TOTAL FIXED PAY RECEIVED:

The total of salary and other compensation paid during the previous two fiscal years, generally 2018 and 2017.

PAY RECEIVED:

The average compensation paid during the previous two fiscal years, generally 2018 and 2017.

BANG FOR THE BUCK: This figure aims to show whether a CEO is overpaid or underpaid. A proprietary algorithm compares the CEO’s two-year average compensation to the scorecard average ($5,495,954). It compares the two-year average revenue of the company to the scorecard average ($9,789,176,687). And it compares the company’s two-year return on investment to that of the relevant S&P/TSX sector index, which serves as a peer group. The Bang for the Buck is read as a multiple: A BFB of “1” means the CEO’s pay is precisely what it should be; a BFB of “2” means the CEO was worth twice what he or she (or they) received.

PAY DESERVED:

This represents the annual compensation that, according to the Bang for the Buck, the company should have paid its CEO(s) over the past two years. It’s derived by multiplying “Pay Received” by “Bang for the Buck.”