CorporateGovernanceandExecutive:March20,2003sEeExecutiveCompensationisinaStateofFluxX.InstitutionalNYSE&NASDAQLInvestor1Listing,ActivismRequirementsStockNewULS.,OptionGovernanceAccountingLegislationp,Lossof、Uncertain,InvestorEconomyConfidenceWSomeoftheGovernanceConcernsthathavebeenExpressedisExecutivePay:=Notlinkedtoperformance-Escalatingratioofexecutivecompensationtothepayofothermanagers,workers-WhatisaCEOworth?-ExecutiveIoanssStockOptions:=AbsenceofaccountingchargehasfacilitatedexcessUuSeofoptions-Equivalentcashvalueofastockoptiontoanexecutiveislessthanitseconomiccosttothecompany-ArisingtidefloatsallboatsGovernanceConcerns(Contd)sIntheBoardroom:-ThecultureofmostBoardroomsmakesiteasiertogoalongwithManagementsrequeststhantorejectorreducethem-CompensationconsultantsareusuallynotindependentofmanagementImprcpearusecverusacfcomoansationsurveyscausea“ratcheting“effectinexecutivecompensation=Manycompensationcommitteeslacktheexperiencenecessarytoanalyzecomplexproposalsandtodevelopinformedopinions,proorconMMeanwhile,CompanyCEOsalsoHaveConcernssImpactofnewlegislationandstandardsongovernanceandday-to-dayoperationssArticulatingcorporatestrategyinshareholderterms,withmoreBoardinvovementsAchievementoffinancialresultsinanuncertainenvironmentsShorianiedcareels一pioriuceofelsesAttraction,motivationandretentionofkeyexecutivetalentsCashcompensationvs.equityincentivessOtherissues:succession,etc.MShareholderObjectivesforExecutiveCompensationsBuildreallong-termgrowthinshareholdervaluesCompetitive,performance-alignedcompensationsAvoidcorporatefuturefinancialhardshipasaresultofspecialcompensationarrangementssPricingrelativetothemarket-properuseofcompensationinsirumentssTrulyindependentCompensationCommitteessFulltruthfulandstraightforwarddisclosureof=Theprinciplesandstructuresofexecutivecompensationsystems(ie.no“boilerplate“)-Decision-makingprocessforcurrentyearawardsMExamplesofShareholderResistancesCoolBrands:21%dropinstockpricefollowingrequestformoreoptionssCHCHelicopters:“Norto11%optiondilutionproposal。ATILTechnologies:Only549%6shareholderapprovalfornewoptions。FaivestInsttutionalShareholderServices:useofthe1SSoptionvaluationmodelleadstomore“No“recommendations。TeaohersPensionPlan:aptiongrantsshouldbeproportionaltoexecutiveownership。AngiotechPharmaceutical:“evergreenstockoptionreplenishmentrescindedduetoinstitutionalshareholderconcernsandnegativepressMTheCanadianCoalitionforGoodGovernanceisGainingCloutsLaunchedlastyearsBrainchildofSteveJarislowskyandClaudeLamoureuxsConsistsofCanadaslargestpensionfunds,mutualfundsandmoneymanagerssPurooseistoshareinformationandtaketheinitiativetoholdmaniagementgccounliablefofgrowingIong-isimshareholdervaiussTheCoalitionwillsupportcompensationschemesthatrewardemployeesforsustainedperformancessSuccessfulyattackedAngiotechproposalMNewLegislationandStandardsareAffectingExecutiveCompensationU.S.Sarbanes-OxleyActProposedChangestoNYSEandNASDAQListingRulessCanadianSecuritiesAdministratorsDisclosureConcerns。InternationalStockOptionExpensingProposals。RepapCourtCaseMShareholderDisclosureConcernssCanadianSecuritiesAdministratorsNov.5,2002pressrelease:-Sampleof76publicly-tradedcompanies-95%had“inadequate“disclosuresWaisonWyaitProxyCircuiarFeviaw-272TSXcompaniesin2002-48?6hadnodisclosureannualincentivedeterminationM