Bill 180, Capping Executive Compensation Act, 2009

Bill 180 2009

An Act to cap executive compensation

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Definition

   1.  In this Act,

"compensation" includes the annual salary, stock options, deferred compensation, retirement fund contributions, bonuses, property, severance and any other compensation provided by a corporation to an officer, director, executive or employee.

Cap on individual compensation

   2.  (1)  A corporation that receives a grant or loan from Ontario shall not provide compensation to any officer, director, executive or employee in an amount greater than $400,000.

Duration

   (2)  The prohibition set out in subsection (1) applies for the fiscal year in which the corporation receives the grant or loan and at least the following two fiscal years.

Contract must include cap

   3.  Any contract between Ontario and a corporation regarding the provision of a grant or loan shall include terms incorporating the prohibition set out in subsection 2 (1) and setting out the number of fiscal years for which the prohibition will apply.

Penalties

   4.  If a corporation contravenes section 2, Ontario may,

  (a)  require that any grant or loan provided be repaid, with interest; and

  (b)  seize and dispose of any of the corporation's assets for the purpose of recovering the value of the grant or loan.

Commencement

   5.  This Act comes into force on the day it receives Royal Assent.

Short title

   6.  The short title of this Act is the Capping Executive Compensation Act, 2009.

EXPLANATORY NOTE

The Bill provides that any corporation that receives a grant or loan from Ontario shall not compensate any officer, director, executive or employee of the corporation in an amount greater than $400,000. The Bill requires that the prohibition be reflected in any contract signed between Ontario and a corporation regarding the grant or loan.

If compensation greater than $400,000 is given, Ontario may require repayment of the grant and may seize and dispose of any of the corporation's assets for the purpose of recovering the value of the grant or loan.