Osgoode Hall in Toronto, on Sept. 25, 2019.Colin N. Perkel/The Canadian Press
Diana Miles, the chief executive officer of the Law Society of Ontario, has left the regulatory body after a months-long probe into how her salary jumped by more than 50 per cent to nearly $1-million without the knowledge of the organization’s board.
The law society issued a brief news release Wednesday announcing that Ms. Miles was “no longer employed” by the organization and that Priya Bhatia, the organization’s executive director of professional development and competence, was stepping in as acting CEO.
“I thank Diana for her many years of service to the Law Society and welcome Priya into her new role,” treasurer Peter Wardle said in the statement.
According to an internal e-mail obtained by The Globe and Mail, Ms. Miles’s salary was boosted from $595,000 to $936,800 last June, without the board being told. Additionally, she was given a retroactive payment of $226,000 related to her pension. This confidential e-mail was written by law society bencher Ryan Alford last December – benchers are elected by members and act as directors on the law society’s board – and sent to his colleagues on the board.
Mr. Alford, a law professor at Lakehead University, said the law society’s bylaws are clear: Significant changes to the CEO’s compensation require board authorization. According to Mr. Alford, once the CEO learned that the circumstances around the raise were being investigated, she “made an offer to rescind the new contract and return to the terms of the previous contract,” provided certain conditions were met, including that the organization drop the review. It was a move Mr. Alford described as an attempt to “derail the investigation.” (Mr. Alford declined an interview request, and Ms. Miles could not be reached for comment.)
Two sources with knowledge of the events confirmed that the law society board was only informed of Ms. Miles’s dramatic raise at a meeting last November. The Globe is not identifying the sources because they are not authorized to discuss the matter publicly. The pay increase and the subsequent investigation were first reported by the Toronto Star in February.
At the November meeting, the benchers learned that former treasurer Jacqueline Horvat – who last summer was appointed to the Superior Court of Justice of Ontario – had commissioned a consultant report that examined Ms. Miles’s compensation. After the analysis determined that Ms. Miles was being paid below market rate, Ms. Horvat is alleged to have approved the raise.
Sources say the consultant report was flawed because it compared Ms. Miles’s compensation with executive compensation at large public companies with revenues of between $400-million and $1-billion a year. The law society, which regulates, licenses and disciplines the more than 57,000 lawyers and 10,000 licensed paralegals in Ontario, has annual revenues of around $100-million from mandatory member dues.
(In British Columbia, the chief executive officer and executive director of its law society is paid about $400,000 a year before a bonus, which can be as much as 10 per cent.)
After the raise came to light, Mr. Wardle, the current treasurer, asked a third party to review the consultant report, which raised serious questions about the analysis. The law society also hired former associate chief justice of Ontario Dennis O’Connor to conduct an independent review of both the remuneration and the process in which it was determined, which was to be completed at the end of February.
In a statement, Mr. Wardle said benchers met Tuesday night to consider Justice O’Connor’s findings.
“Following that meeting, we made some changes to our leadership,” he said. The law society will not share the O’Connor report, and the bencher meeting was held in camera. Mr. Wardle said that, going forward, the law society will be making improvements to its governance and will “enhance how treasurers and benchers are trained and oriented when they take up their positions.”
One source with knowledge of the events said benchers still have serious concerns about how this could have happened and why the board wasn’t informed earlier.
The Globe reached out to Justice Horvat for comment. Trevor Guy, a spokesperson with the Ontario Superior Court of Justice, said the justice will not be providing comment, as judges are bound by ethical guidelines that prevent them from “speaking publicly about a case which is before the court or that may come before the court.”
Ms. Miles had been with the law society for more than 23 years. In September, 2017, she was named acting CEO, and the position was made permanent the following March.