Item - 2014.EX44.8
Tracking Status
- City Council adopted this item on August 25, 2014 without amendments.
- This item was considered by Executive Committee on August 20, 2014 and was adopted with amendments. It will be considered by City Council on August 25, 2014.
EX44.8 - Executive Compensation Policy at City Agencies and Corporations
- Decision Type:
- ACTION
- Status:
- Adopted
- Wards:
- All
City Council Decision
City Council on August 25, 26, 27 and 28, 2014, adopted the following:
1. City Council request City agency and corporation Boards to develop a comprehensive senior executive compensation policy, independent of management, applying the guiding principles and practices set out in Attachment 1 to the report (August 6, 2014) from the City Manager and the City Solicitor.
2. City Council require City agency and corporation Boards to approve a senior executive compensation policy by April 1, 2015 (excluding restricted Boards), and forward it to the City Manager for report to City Council, through the Executive Committee, for consideration; and in the interim period prior to the approval of a policy be requested to adhere, where possible, to the principles in Attachment 1 to the report (August 6, 2014) from the City Manager and the City Solicitor, including the capping of variable, incentive, and/or merit pay to 25 percent of base salary.
3. City Council request that City agency and corporation Board approved executive compensation policies be applied to new employment contracts, and to existing contracts, if any, that permit compensation adjustments, either during an existing term or under renewal.
4. City Council direct City agency and corporation Boards to review their executive compensation policy every four years after the initial policy is approved (excluding restricted Boards), with results to be disclosed on public websites and annual reports, and authorize the City Manager to incorporate this requirement and the guiding principles and practices per Attachment 1 to the report (August 6, 2014) from the City Manager and the City Solicitor, into existing and future Relationship Frameworks, Shareholder Declarations and Directions.
5. City Council direct the City Manager and the Executive Director, Human Resources to provide guidance and assistance to City agencies as required in the development of executive compensation policies.
6. City Council require all City agency and corporation Boards to ensure that future employment contracts for senior executives contain a provision providing employee consent to the disclosure of their individual compensation through an annual public report through the Board, and request that existing senior executives of those bodies provide similar consent.
7. City Council receive Confidential Attachments 2 and 3 to the report (August 6, 2014) from the City Manager and the City Solicitor for information, and direct that their content remain confidential in their entirety following Council's decision as they contain personal information about identified individuals and pertain to solicitor-client privilege.
Confidential Attachments 2 and 3 to the report (August 6, 2014) from the City Manager and the City Solicitor remain confidential in their entirety in accordance with the provisions of the City of Toronto Act, 2006, as they relate to personal information about identified individuals and contain advice that is subject to subject to solicitor-client privilege.
Confidential Attachment - Personal matters about an identifiable individual, including municipal or local board employees
Background Information (Committee)
https://www.toronto.ca/legdocs/mmis/2014/ex/bgrd/backgroundfile-72764.pdf
(August 6, 2014) Attachment 1 - Guiding Principles in the Development of Senior Executive Compensation Policies
https://www.toronto.ca/legdocs/mmis/2014/ex/bgrd/backgroundfile-72765.pdf
(August 6, 2014) Confidential Attachment 2 - Comparator Analysis and 2012 Senior Executive Compensation
(August 6, 2014) Confidential Attachment 3 - Report from the City Solicitor
Motions (City Council)
Vote (Adopt Item) Aug-25-2014 4:26 PM
| Result: Carried | Majority Required - EX44.8 - Adopt the item |
|---|---|
| Total members that voted Yes: 27 | Members that voted Yes are Paul Ainslie, Maria Augimeri, Michelle Berardinetti, Shelley Carroll, Raymond Cho, Josh Colle, Gary Crawford, Janet Davis, Sarah Doucette, John Filion, Paula Fletcher, Mark Grimes, Norman Kelly, Chin Lee, Peter Leon, Gloria Lindsay Luby, Josh Matlow, Mary-Margaret McMahon, Joe Mihevc, Denzil Minnan-Wong, Ron Moeser, Frances Nunziata (Chair), Cesar Palacio, Gord Perks, Ceta Ramkhalawansingh, Karen Stintz, Kristyn Wong-Tam |
| Total members that voted No: 0 | Members that voted No are |
| Total members that were Absent: 18 | Members that were absent are Ana Bailão, Vincent Crisanti, Glenn De Baeremaeker, Mike Del Grande, Frank Di Giorgio, Doug Ford, Rob Ford, Mary Fragedakis, Mike Layton, James Maloney, Giorgio Mammoliti, Pam McConnell, John Parker, James Pasternak, Anthony Perruzza, Jaye Robinson, David Shiner, Michael Thompson |
EX44.8 - Executive Compensation Policy at City Agencies and Corporations
- Decision Type:
- ACTION
- Status:
- Amended
- Wards:
- All
Confidential Attachment - Personal matters about an identifiable individual, including municipal or local board employees
Committee Recommendations
The Executive Committee recommends that:
1. City Council request City agency and corporation Boards to develop a comprehensive senior executive compensation policy, independent of management, applying the guiding principles and practices set out in Attachment 1 to the report (August 6, 2014) from the City Manager and the City Solicitor.
2. City Council require City agency and corporation Boards to approve a senior executive compensation policy by April 1, 2015 (excluding restricted Boards), and forward it to the City Manager for report to City Council, through the Executive Committee, for consideration; and in the interim period prior to the approval of a policy be requested to adhere, where possible, to the principles in Attachment 1 to the report (August 6, 2014) from the City Manager and the City Solicitor, including the capping of variable, incentive, and/or merit pay to 25 percent of base salary.
3. City Council request City agency and corporation Board approved executive compensation policies be applied to new employment contracts, and to existing contracts, if any, that permit compensation adjustments, either during an existing term or under renewal.
4. City Council direct City agency and corporation Boards to review their executive compensation policy every four years after the initial policy is approved (excluding restricted Boards), with results to be disclosed on public websites and annual reports, and authorize the City Manager to incorporate this requirement and the guiding principles and practices per Attachment 1 to the report (August 6, 2014) from the City Manager and the City Solicitor, into existing and future Relationship Frameworks, Shareholder Declarations and Directions.
5. City Council direct the City Manager and the Executive Director, Human Resources to provide guidance and assistance to City agencies as required in the development of executive compensation policies.
6. City Council require all City agency and corporation Boards to ensure that future employment contracts for senior executives contain a provision providing employee consent to the disclosure of their individual compensation through an annual public report through the Board; and request that existing senior executives of those bodies provide similar consent.
7. City Council receive Confidential Attachments 2 and 3 to the report (August 6, 2014) from the City Manager and the City Solicitor for information, and direct that their content be kept confidential in their entirety after the consideration of the report by Council for reasons of personal information about identified individuals and solicitor-client privilege.
Origin
Summary
This report recommends that City Council request Boards of City agencies and corporations to develop a senior executive compensation policy, adhering to the guiding principles outlined in Attachment 1 to this report. Attachment 1 includes requirements to set a base salary range using a relative comparator analysis, places a 25 percent limit on variable, incentive, and/or merit pay, limits employer pension contributions to 1.0 time the employee contribution, and requires a review of senior executive benefits.
The policy would apply to new senior executive employment contracts and to existing contracts, if any, which permit compensation adjustments, either during an existing term or under renewal. However, this report does not establish specific compensation levels or programs to be applied by City Boards, as the City of Toronto is not the employer of City agency and corporation staff. Confidential Attachment 3 to this report outlines various legal issues that should be considered in the context of the recommendations contained in this report.
This report recommends that City Boards approve senior executive compensation policies by April 1, 2015, if not already established, with a review every four years. It is recommended that restricted agency Boards (Toronto Police Services Board and Toronto Public Library Board) be requested to review their executive compensation policies in the spirit and intent of what is being recommended.
The senior executive compensation policy review does not apply to City agencies and corporations where the employees are City employees (including, Association of Community Centres (AOCCs) and Public Health) given that City policies apply.
The objective of this report is to ensure that senior executive compensation policies at City agencies and corporations are set within a framework that is fair, transparent, and accountable, and complements similar practices across the broader City of Toronto public service. The policy framework proposed in this report maintains the right of the agency or corporation Board as the employer to set the details of its compensation strategy while adhering to the key principles to ensure more transparency and accountability in setting executive compensation.
Background Information
https://www.toronto.ca/legdocs/mmis/2014/ex/bgrd/backgroundfile-72764.pdf
(August 6, 2014) Attachment 1 - Guiding Principles in the Development of Senior Executive Compensation Policies
https://www.toronto.ca/legdocs/mmis/2014/ex/bgrd/backgroundfile-72765.pdf
(August 6, 2014) Confidential Attachment 2 - Comparator Analysis and 2012 Senior Executive Compensation
(August 6, 2014) Confidential Attachment 3 - Report from the City Solicitor
Motions
That:
1. Recommendation 2 be amended by deleting the words "for information;" and inserting the words "for report to City Council, through the Executive Committee, for consideration" following the words "City Manager".
2. City Council require all City agency and corporation Boards to ensure that future employment contracts for senior executives contain a provision providing employee consent to the disclosure of their individual compensation through an annual public report through the Board; and request that existing senior executives of those bodies provide similar consent.
That:
1. Recommendation 2 be amended by inserting the words "(excluding restricted Boards)," following the words "by April 1, 2015"
2. Recommendation 4 be amended by inserting the words "(excluding restricted Boards)," following the words " initial policy is approved".