29 August 2017 07:00
Richard B. DeWolfe, and Donald Guloien
At its annual general meeting held in the spring of 2016, Manulife has suffered a blow. The shareholders have supported only 77 % of its remuneration policy for senior executives.
The president of its board of directors, Richard B. DeWolfe, is concerned about the decline, while the approval rate was 91 % a year earlier. He is then hired to review the compensation program Manulife, with one Canadian in three, to meet the expectations of its shareholders.
Mr. DeWolfe and John Cassaday, director and chairman of the remuneration committee and staffing framework, have undertaken to meet 25 shareholders, representing 50 % of the institutional shareholders of Manulife. «We have listened to their advice, and their suggestions for improving the program. We have also consulted with companies of advisory services in proxy voting.
Over the months that followed, we met with members of management. With the active participation and support of the ceo, we have made seven significant changes to our remuneration policy, » says Mr. DeWolfe, in his message published in the annual report 2016 Manulife.
The seven changes revolve around three major axes. The first was to simplify the remuneration schemes. The second has been to link executive compensation more closely with performance. It has also been linked more closely on the experience of the shareholders, one can read in his circular for solicitation of proxies.
With respect to its CEO Donald Guloien, he has chosen to lead by example. It has voluntarily agreed to reduce its compensation in support of these changes. In his president’s message published in the annual report of Manulife, Mr. Guloien reported that this reduction was obvious.
«I believe very strongly that the remuneration of the members of the management must be fully aligned with creating long-term value for shareholders. Although it is rare that a ceo engages in a positive manner to any reduction of his compensation, in the present case, this reduction seems to me perfectly sensible. I want you to know that the members of the management of Manulife and myself we are committed to further improve our performance and our focus on shareholder returns, » one can read there.
And the efforts of Manulife in the area have borne fruit. The rate of approval to the remuneration policy of the senior management amounted to 84.5% at the annual meeting of 4 may.
According to the circular of Manulife, the total compensation of Mr. Guloien was $ 11.6 million ($M) in 2015. This amount includes his base salary of$ 1.3 Million, as well as bonuses. In 2016, his compensation was$ 10.7 Million. In 2017, it is expected to be$9.5 Million.
With respect to the overall compensation of the executive officers of Manulife, it has more than tripled from 2011 to 2015, according to Morningstar. It has increased from$ 15.2 Million to nearly$ 50 Million. It was of$ 21.3 Million in 2012,$ 28 Million in 2013 and$ 34.6 Million in 2014. Morningstar has not published the data relating to 2016.