Bill 128 2015

An Act to amend the Business Corporations Act with respect to meetings of shareholders and the adoption of an executive compensation policy

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

   1.  (1)  Clause 97 (c) of the Business Corporations Act is repealed and the following substituted:

   (c)  the shareholders present at a meeting of shareholders shall choose a person from their number to preside as chair.

   (2)  Section 97 of the Act is amended by adding the following subsection:

Votes to elect director

   (2)  Despite subsection (1), a person may be elected as a director only if a plurality of the votes cast are in favour of his or her election, even if the articles or by-laws of the corporation provide otherwise.

   2.  Subsection 99 (4) of the Act is repealed and the following substituted:

Proposal may include nominations

   (4)  A proposal may nominate a single individual for election as a director if the proposal is signed by one or more registered holders of shares or beneficial owners of shares that represent in the aggregate,

  (a)  at least 2 per cent of the shares of the corporation; or

  (b)  at least 2 per cent of the shares of a class or series of shares of the corporation that are entitled to vote at the meeting to which the proposal is to be presented.

Nominations at meeting not prevented

   (4.1)  For greater certainty, subsection (4) does not prevent nominations being made at a meeting of shareholders.

   3.  Subsection 105 (1) of the Act is repealed and the following substituted:

Requisition for shareholders meeting

   (1)  One or more registered holders of shares or beneficial owners of shares that represent in the aggregate at least 2 per cent of the issued shares of the corporation may requisition the directors to call a meeting of shareholders for the purposes stated in the requisition.

   4.  Section 110 of the Act is amended by adding the following subsection:

Same

   (3.1)  Every form of proxy shall provide a means for the shareholder to specify that the shares registered in the shareholder's name shall be voted for or against the election of any director who is to be elected at a meeting of shareholders.

   5.  Section 137 of the Act is amended by adding the following subsection:

Executive compensation policy

   (2)  The directors of a corporation shall fix the remuneration of the directors and officers of the corporation in accordance with any adopted executive compensation policy referred to in section 169.1.

   6.  The Act is amended by adding the following section:

Proposal to adopt, amend or repeal executive compensation policy

   169.1  A registered holder of shares entitled to vote, or a beneficial owner of shares that are entitled to be voted, at an annual meeting of shareholders may, in accordance with section 99, make a proposal to adopt an executive compensation policy with respect to the remuneration of directors or officers of the corporation or may make a proposal to amend or repeal such a policy.

Commencement

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

Short title

   8.  The short title of this Act is the Business Corporations Amendment Act (Shareholder Meetings and Executive Compensation), 2015.

EXPLANATORY NOTE

The Bill makes various amendments to the Business Corporations Act with respect to meetings of shareholders and the election of directors. Shareholders are given the ability to choose the chair of every meeting of shareholders. In addition, directors can only be elected with a plurality of votes, despite anything in the articles or by-laws of the corporation. The nomination rules are amended so that shareholders representing in the aggregate at least 2 per cent of the shares of the corporation may nominate an individual for election as a director. Shareholders that represent in the aggregate at least 2 per cent of the shares may also requisition a meeting of shareholders. Finally, every form of proxy must include a means to specify that the shares shall be voted for or against the election of a director.

The Act is also amended to provide shareholders with the opportunity to propose an executive compensation policy at a meeting of shareholders. The directors of the corporation are required to comply with the policy if it is adopted.