Amendments to the Form 51-102F6 Statement of Executive Compensation (the “Form”) came into force on October 31, 2011 and apply to proxy circular disclosure for issuers for financial years ending October 31, 2011 or later. As many information circulars for annual general meetings are now being prepared, it is a good time to remind issuers of the changes.

The key amendments to the Form are summarized below:

1. Objectives – Intended to Pay vs. Paid

The old Form stated that the objective of the required disclosure is to “communicate the compensation the board of directors intended the company to pay” resulting in some issuers reporting intended compensation as opposed to actual compensation. The amendments remove the reference to “intention” and update the objectives of the disclosure to be communication of compensation paid or payable and communication of the decision-making process relating to compensation.

2. New Limits – Serious Prejudice Exemption

The Form provides an exemption from the compensation discussion and analysis requirement to disclose specific performance goals or similar conditions for NEOs if the disclosure would “seriously prejudice the interests of the company”.

3. New-Risk Management Disclosure

The amendments require issuers to disclose whether or not the board of directors, or the compensation committee of an issuer, considered the implications of the risks associated with the issuer’s compensation policies and practices and, if so, to disclose: the extent and nature of the board of directors’ or committee’s role in the risk oversight of the issuer’s compensation policies and practices; any practices the issuer used to identify and mitigate compensation policies and practices that could encourage a NEO or individual at a principal business unit or division of the issuer to take inappropriate or excessive risks; and any identified risks arising from the issuer’s compensation policies and practices that are reasonably likely to have a material adverse effect on the issuer.

4. Disclosure of Discretion Used and Future Changes to Compensation Policy

Under the amendments, issuers are required to disclose whether the board can exercise discretion, either to award compensation absent attainment of the relevant performance goal or condition, or to reduce or increase the size of any award or payout. Issuers must also disclose if they exercised such discretion and whether it applied to one or more NEOs.

5. Benchmarking

The amendments provide that if the issuer used bench-marking in determining compensation or any element of compensation, the benchmark group is to be included in the compensation discussion and analysis as well as an explanation of why the benchmark group was selected and selection criteria are considered by the issuer to be relevant. The CSA has not amended the Form to require issuers who do not benchmark to explain the rationale for not using any benchmark peer group.

6. New Compensation Committee Disclosure

The amendments require disclosure of any policies and practices adopted by the board of an issuer to determine compensation for the issuer’s directors and executive officers.

If the issuer has established a compensation committee, the amendments require the issuer to disclose or describe: the name of each committee member and whether they are independent; whether one or more of the committee members has any direct experience that is relevant to his or her responsibilities in executive compensation; the skills and experience that enable the committee to make decisions on the suitability of the issuer’s compensation policies and practices; and the responsibilities, powers and operation of the committee.

7. Disclosure of Compensation Advisors’ Services and Fees

The amendments expand the disclosure required regarding compensation consultants and advisors retained by the issuer to assist the board or compensation committee in determining compensation for the directors or executive officers.

8. Disclosure of Valuation of Equity-Based Awards

The amendments require issuers to disclose the methodology used to calculate grant date fair values of equity-based awards, including key assumptions and estimates used for each calculation, and why the issuer chose that methodology, regardless of whether there are any differences between the method used for the purposes of the SCT and for financial reporting.

9. New-Disclosure of Market Value of Vested Share-Based Awards

The amendments add a new column to the Outstanding Awards Incentive Plan Award table to disclose for each NEO the aggregate market or payout value of vested share-based awards that have not yet been paid out or distributed.

10. Section 6.1 – Termination and Change of Control Benefits

New commentary to Section 6.1 of the Form states that an issuer may disclose estimated incremental payments, payables and benefits that are triggered by, or result from, a scenario described in Section 6.1(1), in a tabular format. Section 6.1(1) requires disclosure of certain payments and entitlements upon termination, resignation, retirement or change in control for each contract, agreement, plan or arrangement that provides for payments to an NEO.

11. Summary Compensation Table

The amendments provide that issuers can no longer add columns to the SCT. Issuers may choose to add new tables, columns to tables other than the SCT, or other information if necessary to meet the stated objectives of the Form if, to a reasonable person, the table or other information does not detract from the prescribed information in the SCT.

12. Definition of Named Executive Officers – Clarification for Subsidiary Employees

The definition of NEO at Section 1.2 of the Form is amended to clarify that the definition of NEO includes the three most highly compensated executive officers (in addition to the CEO and CFO) of the company, including any of its subsidiaries. The policy intention of the amendments in this regard appears to be that an employee of a subsidiary will be an executive officer of the issuer only if such employee performs a policy making role for the issuer.

If you have questions about the new Form 51-102F6, contact any member of Clark Wilson’s Corporate Finance & Securities Law Group.