Canadian Pacific Railway Ltd. | Median Worker Pay at Canadian Pacific Railway

Status
Withdrawn
AGM date
Previous AGM date
Resolution details
Lead filer
Vancity Investment Management
Resolution ask
Report on or disclose
ESG theme
  • Governance
ESG sub-theme
  • Remuneration or pay
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Industrials
Company HQ country
Canada
Resolved clause
The Board of Directors undertake a review of executive compensation levels in relation to the entire workforce and, at reasonable cost and omitting proprietary information, provide a report to shareholders and publicly disclose the CEO compensation to median worker pay ratio 
Supporting statement
CEO realized compensation in US has risen 1322.2% since 1978. This increase greatly exceeds the 817% increase in the overall value of the S&P and the 18% increase in the average workers compensation. The CEO to worker compensation ratio in the US has increased from 31 times in 1978 to 351 times in 2020. Canada has seen similar issues with a report finding that CEO compensation at the top 100 companies on the TSX was 202 times the pay of an average worker in 2020. Despite high profile announcements of executive level pay cuts at the beginning of the pandemic, a report analyzing pandemic pay cuts found that executive pay increased 17% in 2020 compared to 2019. Even amongst executives who claimed to have taken pandemic pay cuts, 52% actually saw their total compensation increase because bonuses exceeded any salary cuts. As outlined in a Statistics Canada Report, The Evolution of Canadian Wages over the Last Three Decades, the growing gap between executive pay and worker pay is indicative of and contributing to the growing wage inequality seen in North America. This growing inequality leads to poorer outcomes for individuals across socioeconomic divides. As outlined by researchers in The Spirit Level: Why Greater Equality Makes Societies Stronger, more unequal societies are associated with poorer health, more violence, a lack of community life and increased rates of mental illness across socioeconomic classes. Relative compensation levels across an organization are an important metric for maintaining employee satisfaction. Individuals naturally compare their economic situation with others and when higher paid employees’ compensation is increasing at a higher rate than lower paid employees, this can have a detrimental impact on employee morale. The wide-reaching impacts of inequality highlight the importance of incorporating a vertical compensation analysis when determining compensation levels across a large company such as Canadian Pacific Railway. Transparency and public disclosure of these metrics can help assure investors that Canadian Pacific Railway is managing these risks and not inadvertently contributing to increased inequality. 

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