Magna’s executive compensation praised
For the first time since Magna International Inc.’s controversial $1-billion US buyout of its founder’s controlling stake in 2010, the company is receiving a thumbsup from both major proxy advisory firms for its executive pay plan.
“We’ve been focused on executive compensation and (implementing) the feedback we’ve received from shareholders,” chief financial officer Vince Galifi said Monday in an interview.
“I’m anticipating as a result that we’re going to get some good improvement on our say-on-pay vote this time around.”
Both Institutional Shareholder Services Inc. and Glass, Lewis & Co. LLC are urging Magna’s shareholders to vote in favour of the company’s executive compensation plan at its annual meeting on May 7.
Glass, Lewis said last year marked the “end of an era” at Magna, as founder Frank Stronach received his final paycheque from the company on Dec. 31.
After the contentious buyout of Stronach’s controlling shares in 2010, Magna agreed to continue to pay him a declining percentage of pre-tax profits for consultant work. That arrangement was “not renewed, extended or replaced with any other form of compensation” when it expired at the end of 2014.
Glass, Lewis also pointed out that Magna has made several changes to its executive compensation structure based on shareholder feedback, including tying stock options more closely to performance.
The advisory firm still has some criticisms for Magna, saying the company is too focused on shortterm performance.