Boards Have Maintained Their Independence Across The Universe
The number of directors on boards ranges from 6 to 10, with the majority being independent
The companies have separated the roles of board chair and CEO, with an independent chairman in place
Source: Company Filings - latest proxy statement/annual report
Board Gender Diversity More Prevalent in Large to Mid-Caps
One-third of large and mid-cap boards include women, dropping to 25% in micro-cap companies. S&P 500 usually has about 35% female directors and TSX has about 31%.
Racial diversity is relatively consistent across companies of all sizes
The presence of Indigenous representatives remains low within these organizations
Source: Company Filings - latest proxy statement/annual report
CEO Pay of Large Caps 7x That of Micro Caps
Median total direct compensation of large caps significantly higher than all other categories. However, over 80% of that is “at risk pay”
Base salary of micro cap companies range from $344,718 to $416,681. This is very similar to the range we see for junior miners
1) All values are in USD, converted using the fiscal year-end exchange rate
Source: Company Filings - latest proxy statement/annual report
Other NEOs' Compensation
The median total direct compensation of NEOs at large-cap companies is higher than in all other categories. However, more than 70% of this pay is "at risk"
Notably, the median NEO compensation in large caps is less than one third of the CEO
(1) All values are in USD, converted using the fiscal year-end exchange rate
Source: Company Filings - latest proxy statement/annual report
Ten Highest Paid CEOs
(1) All values are in USD, converted using the fiscal year-end exchange rate
Source: Company Filings - latest proxy statement/annual report
Large-Cap Companies Prioritize Equity-Based Compensation
Large Cap companies tend to offer more performance-based and at-risk compensation, with a greater emphasis on long-term incentives (58% for CEOs)
Overall, total CEO compensation at micro-cap firms is significantly lower than at large-cap companies, leading to a heavy reliance on base salary (58%)
Junior Miners: have a relatively even distribution between fixed and variable compensation, keeping the at-risk pay at around 50%.
Source: Company Filings - latest proxy statement/annual report
Performance Measures in Annual Incentive Plans
Micro-caps focus on financial goals like financing, but emphasize non-financial objectives overall
ESG metrics are present across all companies, with 100% adoption among large caps.
(1) The totals may not add up to 100% due to companies that incorporate more than one metric.
(2) All the percentages are based on the number of companies that have adopted a formal bonus plan
Source: Company Filings - latest proxy statement/annual report
ESG Metrics in Executive Compensation Less Prevalent in Small/Micro Caps
Only a small number of small/micro-cap firms have adopted ESG metrics in their incentive plans
Environmental stewardship and accident prevention are the most common ESG objectives linked to executive compensation
(1) The totals may not add up to 100% due to companies that incorporate more than one ESG metric.
Source: Company Filings - latest proxy statement/annual report
Micro Caps Rely Heavily on Stock Options as a Form of Long-Term Incentives Which are not Performance-Driven
Stock Options: Rights to purchase company shares at a set price
Time-Based RSUs: Company shares vesting over time, rewarding continued employment
Performance-Based RSUs: Company shares vesting upon achieving specific performance goals
Source: Company Filings - latest proxy statement/annual report
TSR is the Most Common Performance Measure in Long-Term Incentive Plans
Majority of companies have chosen to use TSR along with other financial or non-financial metrics to evaluate long-term performance awards
(1) The totals may not add up to 100% due to companies that incorporate more than one metric.
(2) All the percentages are based on the number of companies that have performance-based awards in their long-term incentives mix
Source: Company Filings - latest proxy statement/annual report
Say on pay vote is absent in small and micro caps
88% of micro caps and 58% of small caps do not disclose say on pay
An analysis of companies with disclosed "say on pay"approval rates reveals that the averages are consistent across various company sizes. Mid-cap companies have experienced a higher "say on pay" compared to large-caps
Source: Company Filings - latest proxy statement/annual report
Institutional investors hold less than 50% in small and micro-cap companies
Small and micro caps have lower institutional investor presence, with these investors holding under 50% of total shares
Source: Yahoo Finance/Company Filings - latest proxy statement/annual report