Key Trends

Governance

Board Oversight of Technology

The incredible growth of artificial intelligence and related technologies over the last several years has made it increasingly clear that Al-powered technologies will have a significant impact on the way people work and do business. However, as the adoption of and uses for Al-related technologies increase, companies may also face additional risks and ethical considerations. As a result, investor expectations for disclosure of board governance and oversight of Al-technologies continue to increase in tandem.

Companies will need to determine the best structures for this oversight, whether it be at the full board level, a key board committee, or a specialized board committee. In addition, many boards may need to engage in continuing education or seek out director candidates with expertise in this area to keep up with this rapidly evolving topic.

In the upcoming proxy season, we expect that Al governance and Al-related disclosures will be front and center for many issuers and investors as the market looks to gain a firmer grasp on the risks and opportunities that underlie this technological revolution. We anticipate that market best practices for oversight and disclosure will begin to emerge this season.

Additionally, cybersecurity remains top of mind for U.S. and Canadian investors and companies alike, as the consequences of a cyberattack continue to escalate. Considering the increased attention on this topic, and the potentially detrimental consequences for companies that have not prioritized addressing cybersecurity issues, we expect to see continued improvements in the disclosure around the board’s expertise and training regarding cybersecurity risks, as well as the board’s role in the oversight of this key issue.

Geopolitical Risk

Geopolitical risk and macro-level factors continue to present many challenges and uncertainty for issuers and investors to navigate. Over the last few years, investors have taken an increased interest in board oversight and management of macro risk and have demonstrated their willingness to hold boards accountable for insufficient oversight or disclosure.

While a ceasefire has been achieved between Israel and Hamas and peace talks to end the Russia-Ukraine war are reportedly underway, geopolitical tensions remain high. The global race for dominance in Al-related technologies, primarily between the U.S. and China, has also become a key consideration influencing global dynamics that many companies must consider as a potential risk factor. In addition, the current U.S. Administration’s imposed tariffs and trade wars with China, Canada, and Mexico, among others, may require companies to consider potential financial and operational impacts to their business. These geopolitical factors pose numerous material risks, including higher production costs, supply chain and/or manufacturing-related disruptions, and the possibility of cyberattacks.

For example, reciprocal tariffs and threats of up to $50 \%$ levies on steel and aluminum imports from Canada into the U.S. have undoubtedly been a source of considerable consternation for Canadian business leaders. Recent reports indicate that a number of Canadian issuers, including Barrick Gold Corp. and TFI International Inc., have been considering redomiciling to the U.S. – although following “feedback from shareholders”, TFI International’s CEO has since said in a statement that the Company no longer intends to pursue redomiciliation. Amid the resulting uncertainty of this abrupt trade war, Canadian companies have been left with little choice but to begin reviewing their supply chains for ways to best mitigate the higher costs that could result, including from retaliatory measures that the Canadian government has promised.

During the 2025 proxy season, we anticipate that boards will continue to consider these geopolitical and macroeconomic risk factors and their potential impacts, and ensure appropriate oversight structures are in place. Various stakeholders will likely continue to encourage companies to provide robust disclosures surrounding their risk oversight and management strategies to mitigate shareholder concerns, reduce reputational risk, and protect long-term shareholder value.

Elimination of Supermajority Vote Requirements

Shareholder proposals seeking to eliminate supermajority voting provisions were the top majority-supported shareholder proposal type during the 2024 proxy season, with 44 proposals making it to ballots at U.S. companies. This represents a significant increase compared to the 13 that were submitted in 2023. Shareholder support for these proposals remained high year over year, with 32 of the 44 (75\%) and nine of the 13 (69\%) proposals receiving majority shareholder support in the 2024 and 2023 seasons, respectively. Given the high level of shareholder support, investors will keep a close eye on how issuers respond to these majority-supported shareholder initiatives.

In response to majority-supported shareholder proposals, we expect companies to take the necessary steps to implement the proposal requests. Companies generally respond to these proposals by including management proposals to eliminate supermajority voting requirements at their annual meetings the following year. However, proposals to eliminate supermajority vote requirements often require a supermajority vote to be approved, thus making it difficult for issuers to garner the requisite shareholder support and acting as an impediment to their own removal, further underscoring shareholder concerns tied to these provisions. Due to this fact, many issuers may need to resubmit these proposals over multiple years and may require proxy solicitation or additional effort to achieve the required support. Notably, some companies may proactively submit management proposals on this topic, perhaps looking to improve their own corporate governance practices or in response to a potential shareholder proponent.

The significant number of shareholder proposals this past year pertaining to supermajority provisions and level of support indicates ongoing shareholder concerns and the negative view shareholders generally have of this governance practice. This season, we expect investors will continue to take an active interest in these provisions.

Canadian Meeting Format

In the past year, there has been increasing pushback from Canadian investor groups regarding the virtual-only meeting format, with concerns raised around how they can be used to limit shareholder questions and silence shareholder dissent. The 2024 proxy season saw seven shareholder proposals receive majority support from shareholders, all requesting that the company commit to an in-person meeting format with the virtual option only serving as a complement, rather than a replacement, to the in-person meeting. Across the board, almost all shareholder proposals on this topic received high levels of support from shareholders (average $42.4 \%$ support) and four of the six proposals that failed to receive majority support were at controlled companies (Cascades Inc., Loblaw Companies Limited, Bombardier Inc and Quebecor Inc.).

Given the above, it is likely that we will see similar shareholder resolutions appear on Canadian ballots in the upcoming season and, based on the experience of the last year, it appears a large swathe of Canadian investors are unwilling to settle for the virtual-only meeting format that has long been accepted market practice in the US.

Reincorporations and Proposed Amendments to the DGCL

On February 17th, 2025, Senate Bill 21 was proposed to amend certain provisions of the Delaware General Corporation Law (“DGCL”). These amendments will: (i) alter the standard of review for transactions with interested parties; (ii) define a controlling shareholder as a party with one-third ownership; (iii) presume independence for directors that meet exchange-specific independence rules, and; (iv) create definitions for material relationships, material interests, and the fairness of a transaction. The amendments would also impose new constraints on books and records requests. While it is currently unknown how long it will take for the bill to pass through the legislature, a Senate Judiciary Committee Hearing is planned for March 12, 2025.

Concurrent with the amendments is a new directive signed by the Delaware legislature and Governor, instructing the Corporation Law Council of the Delaware State Bar Association to assist in developing reforms to address the size and frequency of plaintiffs’ attorney fee awards. These changes alter existing case law standards for review of corporation transactions, strengthen management, boards and controlling shareholders at the cost of individual shareholder rights, and limits the ability for shareholders to pursue litigation against a company.

Senate Bill 21 was reportedly put forward to address the exodus of controlled companies from Delaware in favor of jurisdictions with corporate law and legal practices that are more favorable to controlled companies and corporate management. Glass Lewis analyzed nine reincorporations from Delaware to other jurisdictions in 2024, six in 2023, and only one thus far in 2025. We note that Meta Platforms, Inc. is reportedly in talks to reincorporate to Texas, and on February 10, 2025, Dropbox, Inc., filed a proxy notice informing shareholders that the company will be reincorporating from Delaware to Nevada as a result of the written consent of its controlling shareholder and CEO. We expect that issuers and investors will be closely monitoring developments on this front throughout the upcoming proxy season.

Diversity Considerations and Disclosure in the United States

In light of the landmark June 2023 Supreme Court decision in Students for Fair Admissions v. Harvard and the current U.S. Administration’s pronounced shift in its approach to Diversity, Equity and Inclusion (“DEI”) programs, many companies and investors are now contending with changing expectations and implications of their diversity initiatives, policies and disclosures.

During the 2025 proxy season, we expect to see significant changes in the way that companies disclose information on their diversity-related policies and considerations, including with regard to board diversity and director nominations. We anticipate that there may be some companies that choose to provide increased disclosure concerning the factors that may impact their diversity-related initiatives, while others may choose to limit or scale back these disclosures.

In particular, Nasdaq-listed companies may choose to make changes to their diversity-related disclosure following a ruling announced in December 2024 from the U.S. Court of Appeals for the Fifth Circuit. The decision struck down the rule requiring companies listed on the Nasdaq exchange to meet certain diversity disclosure requirements, such as the inclusion of a specific board diversity matrix. As companies are no longer required to disclose this information, several companies holding AGMs early in the year chose to omit the previously required Nasdaq diversity matrix in their 2025 proxy statements.

As companies face increased scrutiny of their DEI-related practices as well as the possibility of legal and/or reputational risk, we expect this issue to be a significant area of interest for shareholders during the 2025 proxy season.

For information on Glass Lewis’ consideration of diversity factors at US companies under the Benchmark Policy effective March 10, 2025, and our thematic polices, please see our 2025 Supplemental Statement on Diversity Considerations at US Companies.

Diversity Reporting in Canada

While federally incorporated Canadian (CBCA) public companies are required to provide diversity disclosure of additional designated groups beyond gender (visible minorities, Indigenous people and people with disabilities), there remains no requirement for additional diversity disclosure for non-CBCA companies. As a result, there is significant variety in the types of additional diversity disclosure provided by these companies, making it very difficult for investors to get any consistent comparable data on additional diversity in Canada. On April 13, 2023, the CSA published for comment two proposed alternative amendments on diversity disclosure, each of which was endorsed by different provincial regulators. The consultation period ended on September 29, 2023, but no guidance has yet been published on this matter, meaning that 2025 is likely to again see a hodgepodge of additional diversity disclosure by non-CBCA companies.

Canadian investors have become accustomed to seeing disclosure of diversity policies and generally improving figures on diverse representation in recent years and are generally likely to be unsupportive of any such disclosure rolled back. However, Canadian companies with U.S. operations are in an increasingly difficult position, given that any diversity, equity and inclusion (“DEI”) initiatives or policies may now create legal and business risks in the U.S.

In an interesting development, Canadian banks may soon be required to provide disclosure on diversity of the board and top management. While implementation of the rules is uncertain, given the upcoming Canadian elections, the push towards greater diversity disclosure is a marked departure from the efforts to dismantle DEI programs in the US.

Executive Compensation

Perquisites

In the post-pandemic years, substantial increases in executive perquisites have emerged, particularly those related to airfare and security. Ballooning airfare costs gained media attention in 2024, with sharp increases compared to the pandemic period when remote work was the norm. This trend has continued for C-suite level executives post-pandemic and remains at elevated levels, despite widespread return-to-work policies for the rank and file of most companies.

In recent years, personal travel has fallen under the security-related perquisites bucket, particularly for highprofile CEOs. Meta Platforms Inc. has consistently topped lists with approximately $\$ 14$ million to cover costs related to Mark Zuckerberg and his family’s personal security. Additionally, security perquisites more broadly have been a prominent headline subject more recently. While we expect to see continued increases in executive perquisites overall, we anticipate that companies will include enhanced disclosure and discussion regarding both airfare and security perquisites this season.

ESG Metrics

While ESG metric usage rate in incentive plans remained stable last year, that may change now that companies have had more time to revisit the effectiveness and materiality of these metrics for the 2025 cycle, particularly against the backdrop of the anti-ESG movement. Several U.S.-based companies have already attracted media scrutiny by ending DEI programs, which would naturally translate to less emphasis of these diversity metrics in executive compensation programs as well.

Given the U.S political climate, we anticipate a reduction in diversity-related metrics and mentions of diversity in pay program discussions in general; diversity-related metrics that are maintained may be de-emphasized and rolled into more discretionary components of pay, rather than weighted, quantitative goals. Multiple companies have already disclosed abandoning diversity-related metrics for their compensation programs in the upcoming year, with some potentially even removing them retroactively for the year in review.

However, we expect a lesser impact on other ESG metrics in the safety, environment and climate categories, and believe that these will continue to shift towards quantitative goals. For those that keep their ESG metrics, we expect to see increased disclosure on materiality and quantitative measurement for most categories.

CEO Succession Planning and Retention

CEO succession planning has long been an area of investor and issuer focus, but we expect that CEO transitions and retention will continue to be an increasingly significant factor for the 2025 season. This may be especially noteworthy coming out of the 2024 season where the U.S. market saw an uptick of “boomerang” CEOs returning to their former posts. In fact, the topic has already been the subject of a January 2025 boardroom battle at Air Products and Chemicals. Rising costs of CEO transitions generally stem from make-whole awards and a seeming need to hire external candidates, adding an extra layer of consideration compared to programs unaffected by transitions.

Along with transitions, heightened concerns surrounding retention and the threat of poaching remain. These concerns also relate to succession planning, as a company is more likely to grant large retention awards where there is no strong succession plan for the CEO in place. All these items come together in rising executive pay levels, but rationale remains key when evaluating the resulting actions.

Rising Canadian Compensation Levels

While lacking the same sticker shock as the compensation packages of their colleagues to the south, there has been a steady, upward trend in CEO compensation among Canadian companies in recent years. Based on data from our pay-for-performance methodology, the average compensation for the CEO role at covered companies in the S\&P/TSX composite increased approximately 8\% from FY2021 to FY2022 and then a further $10 \%$ from FY2022 to FY2023.

That index has experienced a similar trend in performance over the same period, with 2023 and 2024 each seeing increases of $8 \%$ and $18 \%$, respectively. Given the significant reliance on equity for CEO compensation, it may be no surprise then that total compensation increased due to gains in equity compensation value. Strong performance in 2024 could be a signal that the trend seen in recent years could accelerate.

Pay growth could also be the result of pressure from Canada’s U.S. peers. Indeed, some mega-grants made in the Canadian market, such as Restaurant Brands International Inc. in fiscal 2022, appear to have been directly influenced by a spree of similarly massive grants made in the United States. While these awards were not as widespread, and did not get the same widespread negative attention as in the U.S., they appear to be becoming normalized for a notable few Canadian companies. Despite a sharp drop in the instances of these grants in the U.S. in the past couple years, Shopify reportedly continued making grants totaling more than $\$ 200$ million to its CEO in fiscal 2024. With valuations for these awards reaching upwards of nine-digits, the impact on total CEO compensation in the market will be significant.

ESG Trends \& Upcoming Shareholder Proposal Topics

SEC No-Action Requests

In 2021, the SEC broadened the scope of proposals that it would allow to go to a vote at companies’ AGMs, stating that it would not block proposals that dealt with issues of social policy significance. Arguably, this was one of the most significant factors in the dramatic increase in environmental and social shareholder proposals that went to a vote in the succeeding years.

The SEC, however, has recently reversed course on this decision, stating it will provide no action relief for companies on more proposals that deal with issues of social policy significance and those that “micromanage” the company. Even before this change, it appears that in recent months the Commission had been more willing to allow no action relief for proposals on the basis that they deal with “ordinary business matters.” For example, in late 2024, the Commission allowed Air Products and Chemicals Inc. to exclude a commonly submitted proposal asking for more information on the company’s lobbying activities on this basis.

This could indicate that companies may be more successful in their attempts to exclude shareholder proposals submitted to their 2025 AGMs, which could have the effect of decreasing the number of shareholder proposals going to a vote during the upcoming proxy season.

Artificial Intelligence

As more and more companies incorporate the use of artificial intelligence (“Al”) in their operations, shareholders have grown increasingly concerned with the potential risks associated with their use of this technology. In 2024, shareholders voted on a wide variety of shareholder proposals dealing with Al, including those asking for more information on the ethical considerations incorporated into the use of Al, the board-level oversight afforded to $\mathrm{Al}$, and how technology companies are sourcing data for the use of training Al models, among others.

As this technology develops and is embraced by companies in myriad industries, it is likely that shareholder proposals dealing with how companies are using and mitigating the risks associated with their use of Al will continue to be submitted to a broader subset of companies in 2025.

Climate Change

Although shareholder proposals on climate-related issues have received less support from investors in recent years, climate change still remains a significant focus for many investors, particularly given the fully realized financial impacts from some of the physical effects of climate change (including increased storm activity and wildfires). Issues related to how companies are mitigating risks associated with climate change are still a priority for many shareholder proponents. Moreover, despite some U.S. investors becoming less active on climaterelated issues, we continue to see a growing focus on this issue from investors outside of the U.S., particularly those in Europe.

For a number of years, shareholder proposals dealing with issues related to climate change have been some of the most popular and high-profile. While support has been slowly diminishing for these proposals over the last two years, it is likely that resolutions on this topic will still be a prominent feature at many companies’ AGMs, and in particular, those companies that operate in the extractive industries and financial services sectors.

ESG/DEI Initiatives

Over the last six months, there have been several high-profile instances of companies rolling back their diversity and ESG initiatives. Companies including John Deere, Tractor Supply Company, Molson Coors, Walmart, Target and Meta Platforms, Inc. have all eliminated certain DEI programs or rolled back diversity-related targets. These moves were met with support from a number of conservative groups and opposition from proponents of these issues. These conflicting messages are likely to be echoed at a number of these companies’ AGMs in 2025. It is likely that the AGMs of these and other high-profile companies will feature conflicting proposals on diversityrelated issues as well as ESG-related issues, more broadly from both pro- and anti-ESG proponents.

Environmental Disclosures in Canada

On June 20, 2024, Bill C-59, introducing significant amendments to the Competition Act, received royal assent and came into effect. Most notable (and controversial) among the proposed amendments were the provisions to address greenwashing. The new provisions explicitly require businesses to substantiate claims made to Canadian consumers relating to the benefits of a business, business activity, product or service for protecting or restoring the environment or mitigating the environmental, social and ecological causes or effects of climate change. Moreover, from June 20, 2025, private parties will be able to seek leave from the Competition Tribunal to commence actions under the Act’s civil misleading representation provisions, including the new greenwashing provisions.

After the passage of Bill C-59, the Competition Bureau launched an initial public consultation to inform its development of enforcement guidance relating to environmental claims after receiving many requests for additional guidance. On December 23, 2024, the Bureau released for public consultation a new draft guidance on its approach to assessing environmental claims under the Act, which was open for comment until February 28, 2025.

For companies, the potential monetary penalties for misleading representations include a maximum fine of $\mathrm{C} \$ 10$ million for a first offense (C\$15 million for subsequent infractions) or three times the value of the benefit derived from the deceptive conduct, or, if that amount cannot be determined, up to $3 \%$ of the company’s annual global revenue – whichever amount is higher.

Critics of the Bill’s greenwashing provisions have noted the potentially “chilling” impact it may have on companies making climate disclosures while proponents have hailed the need for disclosures that are more rigorously vetted and substantive. Either way, given the likely increased scrutiny of environmental claims and potentially significant penalties available for contraventions of the greenwashing provisions, companies will have to implement the appropriate oversight and governance to ensure all public environmental statements, commitments and objectives are reasonable and substantiated.

Glass Lewis Benchmark Policy Updates

United States

Diversity Considerations

Glass Lewis modified its approach to providing proxy voting guidance considering diversity factors at US companies under the Benchmark Policy effective March 10, 2025. For more information, please see our 2025 Supplemental Statement on Diversity Considerations at U.S. Companies.

Board Oversight of Artificial Intelligence (AI)

We have included a new discussion on our approach to Al-related risk oversight. In recent years, companies have rapidly begun to develop and adopt uses for Al technologies throughout various aspects of their operations. Deployed and overseen effectively, Al technologies have the potential to make companies’ operations and systems more efficient and productive. However, as the use of these technologies has grown, so have the potential risks associated with companies’ development and use of Al. Given these potential risks, the benchmark policy takes the view that boards should be cognizant of, and take steps to mitigate exposure to, any material risks that could arise from their use or development of Al.

In the absence of material incidents related to a company’s use or management of Al-related issues, our benchmark policy will generally not make voting recommendations on the basis of a company’s oversight of, or disclosure concerning, Al-related issues. However, in instances where there is evidence that insufficient oversight and/or management of Al technologies has resulted in material harm to shareholders, Glass Lewis will review a company’s overall governance practices and identify which directors or board-level committees have been charged with oversight of Al-related risks. We will also closely evaluate the board’s response to, and management of, this issue as well as any associated disclosures and the benchmark policy may recommend against appropriate directors should we find the board’s oversight, response or disclosure concerning Al-related issues to be insufficient.

Change-In-Control Provisions

We have updated our discussion of change-in-control provisions in the section “The Link Between Compensation and Performance” to define our benchmark policy view that companies that allow for committee discretion over the treatment of unvested awards should commit to providing clear rationale for how such awards are treated in the event a change in control occurs.

Clarifying Amendments

The following clarifications of our existing policies are included this year:

Board Responsiveness to Shareholder Proposals

We have revised our discussion of board responsiveness to shareholder proposalБел to reflect that when shareholder proposals receive significant shareholder support (generally more than $30 \%$ but less than majority of votes cast), the benchmark policy generally takes the view that boards should engage with shareholders on the issue and provide disclosure addressing shareholder concerns and outreach initiatives.

Reincorporation

We have revised our discussion on reincorporations to reflect that we review all proposals to reincorporate to a different state or country on a case-by-case basis. Our review includes the changes in corporate governance provisions, especially those relating to shareholder rights, material differences in corporate statutes and legal precedents, and relevant financial benefits, among other factors, resulting from the change in domicile.

Approach to Executive Pay Program

We have provided some clarifying statements to the discussion of in the section titled “The Link Between Compensation and Performance” to emphasize Glass Lewis’ holistic approach to analyzing executive compensation programs. There are few program features that, on their own, lead to an unfavorable recommendation from Glass Lewis for a say-on-pay proposal. Our analysis reviews pay programs on a case-bycase basis. We do not utilize a pre-determined scorecard approach when considering individual features such as the allocation of the long-term incentive between performance-based awards and time-based awards. Unfavorable factors in a pay program are reviewed in the context of rationale, overall structure, overall disclosure quality, the program’s ability to align executive pay with performance and the shareholder experience and the trajectory of the pay program resulting from changes introduced by the compensation committee.

Canada

Shareholder Meeting Format

We have updated the previous “Virtual Shareholder Meetings” section of the guidelines to clarify that we are tracking shareholder meeting format in the following categories – in-person only meeting, virtual-only meeting, hybrid meeting (shareholders have equal access to participate virtually and in-person) and in-person meeting with virtual element (shareholders can attend the online meeting but do not have the same capacity to participate as the in-person attendees). We do not currently have a benchmark policy voting recommendation based solely on the shareholder meeting format chosen by a company, although we continue to expect clear disclosure guaranteeing shareholders’ ability to meaningfully participate in the virtual-only meeting format.

We have clarified our benchmark policy expectation that, given the concerns raised by institutional shareholders on shareholder meetings in Canada that do not allow for in-person attendance, companies should engage with their shareholders on this matter and provide rationale for their choice of shareholder meeting format when inperson attendance is not permitted. We have also added language to this section to confirm that the benchmark policy may recommend against the chair of the governance committee, or another relevant director, in cases where a board has failed to sufficiently respond to legitimate shareholder concerns regarding the shareholder meeting format.

Disclosure of Professional Skills and Experience

We have added language to the “Professional Skills and Experience” section of the guidelines to note the importance of companies providing substantive disclosure in their proxy filings about the experience and expertise of board nominees. In cases where the disclosure of a S\&P/TSX 60 company does not allow for a meaningful assessment of the key skills and experience of incumbent directors and nominees to a board, the benchmark policy may recommend a vote against the chair of the nominating committee (or equivalent).

Shareholder Proposals \& ESG-Related Issues

Artificial Intelligence

We have updated our benchmark policy guidelines to include information concerning our approach to shareholder proposals related to artificial intelligence (“Al”). Specifically, the benchmark policy generally takes the view that companies should provide sufficient disclosure to allow shareholders to broadly understand how they are using Al in their operations and whether there have been any ethical considerations incorporated in their use of this technology. We will carefully evaluate all shareholder proposals dealing with companies’ use of Al technologies and will make recommendations on these proposals on a case-by-case basis. When evaluating these proposals, we will closely review the request of the proposal, and the disclosure provided by the company and its peers concerning their use of $\mathrm{Al}$ and the oversight afforded to $\mathrm{Al}$-related issues. We will also evaluate any lawsuits, fines, or high-profile controversies concerning the company’s use of Al as well as any other indication that the company’s management of this issue presents a clear risk to shareholder value.

Meetings to Watch

Crowdstrike Holdings, Inc. (Nasdaq: CRWD)

In July 2024, Crowdstrike experienced a quality-control flaw that resulted in mass software outages for millions of Microsoft Windows users worldwide. These disruptions severely impacted numerous companies and organizations including Delta Airlines, among others, which reportedly lost nearly $\$ 500$ million due to delayed or cancelled flights because of their frozen operations. In response, Crowdstrike provided updates in their blog and created a Remediation and Guidance Hub channel file for the specific incident on their website, providing guidance and technical support. While Crowdstrike successfully identified and deployed a solution to the outages within 79 minutes, the company now faces ongoing litigation from Delta seeking damages, and from investors, including the New York State Comptroller, on the grounds of “[misleading] investors by falsely touting its safeguards and quality assurance…” with the hopes that the “action may present opportunities for corporate governance reforms to strengthen the company and protect shareholder value.” Shareholders will likely place heavier scrutiny on the company’s response to the incident and oversight structures at the forthcoming annual meeting.

GFL Environmental Inc. (TSX: GFL)

Since 2021 Glass Lewis has consistently raised concerns about GFL Environmental Inc.’s compensation structure and the way in which the inequitable voting structure may be conferring excessive influence on the CEO. In 2024, Patrick Dovigi’s eye-watering total compensation figure of $\mathrm{C} \$ 68,464,987$ made him the highest paid CEO in our Canadian coverage universe for the year and prompted significant levels of shareholder opposition to his pay package, with over $36 \%$ voting against it.

The high level of dissent at last year’s AGM is particularly notable given the company’s share ownership structure at the time. Dovigi Group and BC Partners beneficially controlled approximately $24.1 \%$ and $17.5 \%$ of the total voting rights, respectively. Ontario Teachers held $6.8 \%$ of total voting power. Together with Magny Cours Investment Pte Ltd. (“GIC”, a private Singapore holding corporation), which held approximately $6.4 \%$ of outstanding equity, these shareholders were referred to as the “investors” with respect to certain director nomination rights and were required to not vote against or withhold their vote in respect of the other investors’ nominees. However, last year’s compensation plan proved a bridge too far for Ontario Teachers, who voted against the company’s advisory vote on executive compensation.

Given the decision to vote against the pay package, it is perhaps unsurprising that the representative from Ontario Teachers has since stood down from the board Moreover, in recent months, Mr. Dovigi has indicated that both BC Partners and Ontario Teachers are likely to reduce their holdings in the company. Should it come to pass, it will be interesting to see what impact such a change in ownership structure will have on GFL, as minority shareholders would likely have increased power to hold directors to account for any compensation and governance concerns.

Goldman Sachs (NYSE: GS)

In January 2025, Goldman Sachs disclosed approximate $\$ 80$ million RSU retention grants to both CEO David Solomon and COO John E. Waldron. While specifics regarding the rationale behind such lofty grants is unclear based on preliminary filings, the firm has suffered from intensive poaching efforts from private equity. Under pressure, the company’s answer was to entice employees to stay via substantial grants. It is likely that these grants factored in succession planning as well, given Mr. Waldron has been widely reported to be the heir apparent to David Solomon and was recently given a seat on the company’s board of directors. For the board, the risk of losing an heir was greater than the cost of these grants, but shareholders will get their chance to weigh in at the company’s 2025 annual meeting.

Henry Schein, Inc. (Nasdaq: HSIC)

Earlier this year, activist investor Ananym Capital Management disclosed their intention to nominate a number of directors to Henry Schein’s board. In response, private equity firm, KKR, entered into an agreement with the company, a defensive move that may prevent and redirect the intended proxy fight. The agreement enables KKR to increase their stake to $12 \%$, with the option to further increase up to $14.9 \%$, in addition to designating two directors onto the company’s board. Henry Schein announced the agreement, stating that the company and KKR will “collaborate to pursue additional opportunities to create shareholder value…with a specific focus on strategic growth, operational excellence, capital allocation, and employee engagement…”, addressing several concerns cited by Ananym Capital. In addition, one of KKR designated directors will serve as vice chair of the nominating and governance committee and oversee the ongoing CEO succession planning, another of Ananym Capital’s primary concerns. While it is unclear whether Ananym Capital will further pursue its intended proxy fight, shareholders will likely place heavier scrutiny the board’s responsiveness and disclosure in response to Ananym Capital’s concerns.

Intel Corporation (NASDAQ: INTC)

Pat Gelsinger was hired to be CEO at Intel in fiscal 2021 but retired from the company less than four years later in December 2024 amid lagging performance and rising shareholder scrutiny. His appointment first made headlines due to the approximately $\$ 110$ million sign-on awards initially granted. At his retirement, Mr. Gelsinger’s performance-based awards were unearned, but time-vesting awards were able to pay out. To replace him, the company named David Zinsner and Michelle Johnston Holthaus as interim co-CEOs and Frank Yeary was named interim executive chair.

Meta Platforms, Inc. (Nasdaq: META)

Meta is reportedly in discussions to reincorporate from the state of Delaware to Texas, a move that was notably precedented by Tesla just last year. While Delaware has long been renowned for its well-established business courts and corporate law, numerous companies have recently opted to reincorporate to other states.
Specifically, Texas has emerged as an alternative, particularly for companies with controlling shareholders as is the case with Meta. As a result of Meta’s multi-class share structure with unequal voting rights, CEO Mark Zuckerberg controls $61 \%$ of the total voting power, likely ensuring the requisite votes needed to approve the reincorporation should it make it onto this year’s ballot.

Shopify Inc. (TSE: SHOP)

In early 2024, news reports indicated that Shopify had granted Tobias Lütke, the company’s CEO and co-founder, equity awards with an aggregate value in excess of $\mathrm{C} \$ 200$ million. Given such a high-value, inflexible grant, shareholders will likely look for a clear and robust rationale from the company, and commitments to refrain from further equity grants for Mr. Lutke while the award is outstanding.

Beyond a robust rationale regarding the need for a high-value award, in these situations we generally look for structural elements that go above what is considered typical market practice (such as, but not limited to, extended vesting periods and rigorous performance conditions over a long period). These provisions would help to safeguard the alignment of Mr. Lutke’s compensation with long-term performance and the shareholder experience.

Toronto-Dominion Bank (TSE: TD)

In October 2024, The Toronto-Dominion Bank (“TD Bank”) reached a settlement with the U.S. Department of Justice, in which the company pled guilty to gaps in its anti-money laundering program and conspiracy to commit money laundering over a ten-year period between January 2014 and October 2024. According to reports, in addition to paying fines equaling more than US\$3 billion, the bank will also be impacted by asset caps placed on its U.S. business.

In the aftermath, shareholders will likely closely watch how compensation for those at the top is impacted. The company has disclosed that Bharat Masrani, the former CEO who departed at the beginning of February 2025, had his variable compensation for 2024 reduced by $100 \%$. In addition, variable compensation for all other members of the Senior Executive Team was reduced by at least $25 \%$. In addition to impacts on 2024 compensation, potential uses of recoupment policies (or rationale surrounding the decision to not use the policies) and go-forward compensation will both be additional significant factors to address in the company’s upcoming proxy statement.

Alongside the departure of Mr. Masrani, the company has also announced that there will be significant board renewal at its upcoming annual meeting with five directors not standing for re-election. As a result, all directors standing for election at the 2025 annual meeting (aside from board chair Alan MacGibbon) have joined the board since 2020. In addition, Mr. MacGibbon, who has served as board chair since 2024, has said that he will step down from the board in December 2025. Shareholders will have to weigh whether this substantial board overhaul serves as sufficient accountability for past board oversight failures.

UnitedHealth Group Incorporated (NYSE: UNH)

UnitedHealth Group, the largest healthcare company in the world, experienced a tumultuous year. In February 2024 the company was the target of a cyberattack where an estimated 190 million Americans’ health and personal data was implicated in the breach. It was later revealed that the company paid $\$ 22$ million to the hackers to satisfy a ransomware payment, with estimated costs relating to this incident surpassing $\$ 2.3$ billion. In addition, the company has been the subject of an antitrust investigation by the U.S. Department of Justice (DOJ) and the target of multiple class-action lawsuits, in addition to a multitude of other legal issues. Furthermore, on December 4, 2024, Brian Thompson, CEO of the company’s healthcare business, was tragically killed outside of a hotel in New York City on his way to an earnings call. In the wake of the attack, the company has faced sharp criticism and public outrage over denials of coverage and rising healthcare costs, among other things.

Shareholders of the company have filed a proposal for this year’s annual meeting requesting that the board prepare a report on the public health-related costs and macroeconomic risks created by the company’s practices that limit or delay access to healthcare. In addition, a surge of discussion regarding security perquisites was set in motion after Mr. Thompson’s assassination. While the actual impact on payments will likely not be seen until the 2026 season, the discussion and disclosure around the company policies will be one to watch as a precursor to future potential increases. As we move toward proxy season, we anticipate that the company will continue to be the subject of intense media coverage and scrutiny from shareholders and the public.