McCain’s Pay Keeps Pace
Posted by admin on October 2, 2010
From David Milstead at the Globe and Mail: As Maple Leaf lags, CEO’s pay keeps pace with the giants
Michael McCain, CEO of Maple Leaf Foods Inc., has no peers among Canadian CEOs.
If you don’t believe me, check the company’s proxy circular, which shows the firm used only U.S. food companies – many of them international giants – for comparison in setting Mr. McCain’s pay package.
So what if we redefine the peer group? What if we say the comparison should be to Canadian companies in the consumer staples and consumer discretionary sectors?
The results are not good for Mr. McCain. The two companies closest in annual revenue are Rona Corp., where CEO Robert Dutton made an average of $2.7-million (Canadian) over the last three years, and Sears Canada, where Dene Rogers averaged $2.3-million in 2008 and 2009.
Maple Leaf spokeswoman Lynda Kuhn says the company uses U.S. peers because Canada doesn’t have a large number of food companies. She notes the company’s outside compensation consultant also signed off on the methodology. “We see the talent market as North American in scope,” she added.
Maple Leaf’s share-grant plan allows executives to keep half the performance shares no matter how poorly the company does.
The unfortunate result for Maple Leaf shareholders is that while Mr. McCain’s pay package is keeping pace with the industry’s giants, Maple Leaf’s performance is not. The company’s board might examine whether the two should be better linked.
Does the US comparison work for the rest of us too?