Board of Directors Compensation

Background

In accordance with CIRA’s policies, in July 2009, an independent consulting firm was engaged to review Director Compensation, following the prior review three years ago.  The purpose of the review was to ensure that the compensation paid to its Elected Directors was consistent with the reasonable remuneration and/or expenses paid to Directors serving in similar industries and in organizations of similar size to CIRA.

The consultant made certain recommendations regarding the principles and amounts for compensation.  At its meeting in September 2009, the Board of Directors adopted the recommended compensation principles as outlined in the Board Compensation Policy. Below is a summary:

1. CIRA offers remuneration to Elected Directors in order to:

a) attract and retain skilled, productive Board members with core governance competencies;
b) ensure external market competitiveness and equity;
c) recognize the additional responsibilities undertaken by the Chair, Vice-Chair and Committee Chairs; and
d) be fiscally responsible and consistent with corporate governance best practices.

2. The Board shall ensure that the compensation of Elected Directors is reviewed every three years by an independent consultant, using the principles set out in this Section, to ensure compensation practices remain current and in-line with market practices.

3. Going forward, the comparable market, which consists of a 50%/50% composite of national not-for-profit and private sector (high tech), will be used as a reference point for calculating appropriate compensation.

FAQ

Q. Who mandated the Board compensation package?

On February 1, 2006 at a Special Members’ Meeting (SMM) held in Toronto, ON, the membership overwhelmingly approved a by-law amendment package. Included in this package was an amendment to By-Law 1, section 3.15 (c), directing the Board to retain the services of an independent consulting firm for the purpose of establishing the compensation to which Elected Directors are entitled for the performance of their duties.

The By-law change package was approved by member vote, with 251 of 307 members (81.75%) present voting to pass the changes.

Q. Who developed the compensation package?

A third-party human resources consulting firm was retained by CIRA to conduct a board compensation survey. 12 organizations of a similar size, scope, and class were surveyed to form a comparison baseline. Based on the survey results, the consulting firm prepared a compensation framework for the Board of Directors; this framework was used to draft the compensation proposal that was brought forward to and approved by CIRA Members.

The proposed compensation package is outlined below.

Q. How was the survey for the Members’ consultation conducted?

Between January 8, 2007 and February 5, 2007, aided by an independent market research firm, CIRA conducted a survey of its Members to measure support for the proposed Board of Directors compensation package. Members were contacted on January 8, 2007 with an email invitation to participate in an online survey. Within the survey website, Members were provided with instructions, supplied with background information, presented with the proposed compensation package, and asked to respond to the survey question “Do you agree that the proposed compensation plan for Elected Director is reasonable?” Members were also given the opportunity to provide a comment within the survey.

Q. What were the results from the Members’ consultation for the Board compensation package?

Members were invited to participate in the survey via a mass email sent to 249,990 members. The survey generated significant response:

• 12,675 members completed the survey
• 70.5% majority voted Yes and agreed with the proposal demonstrating strong support for the compensation plan
• 14.6% cast a No vote indicating that they did not agree with the proposed compensation plan
• 14.8% voiced No Opinion on the matter

Q. Which Board Members are eligible for compensation?

CIRA will offer remuneration to elected Board members to recognize their time and effort and to help the organization attract and retain experienced and knowledgeable members to its Board.

Ex-officio Board Members, including CIRA’s President/CEO and Industry Canada’s representative, are not eligible for compensation.

Q. Why are CIRA Directors compensated?

Based on the results of the review of similar non-profit organizations, a compensation plan for CIRA Directors was developed to:

1. Attract and retain skilled, productive Board members representative of the Canadian population;
2. Ensure external market competitiveness and internal equity;
3. Recognize the additional responsibilities undertaken by the Executive Committee and the Committee Chairs; and
4. Be fiscally responsible and consistent with corporate governance best practices.

Please note that Board Members may also choose to donate their compensation to a charity of their choice.

Q. What compensation does the CIRA Board of Directors receive?

The compensation received by Directors depends on their role within the
Board of Directors, the number of meetings they attend, the type of meetings
attended, and any additional committee work performed.

Table 1. CIRA Director Compensation Schedule - Effective October 1, 2009