As a rule, the amount of executive compensation should not be a matter of public policy, but ought to be decided by the shareholders and directors of a corporation. But when public policy is already involved, in such a way as to provide arguably oligopolistic, or even monopolistic, profits, there may be a public interest in setting some criteria.
Federal legislation requires Canadian ownership of cable television distributors, as well as of broadcasting companies. Many countries do likewise for broadcasters, in the belief that they will either favour their own country's culture, or can be prevailed upon to do so, but it is unusual to do this with cable and satellite providers.
Jim Shaw, the CEO of Shaw Communications Inc. - both a cable and a broadcasting company, as well as a supplier of forms of telecommunication - retired at the age of 53 in November. The board of directors awarded him a pension of $495,833 a month, or $5.95-million a year. The company's most recent shareholder proxy circular disclosed, in a footnote, that he had previously been eligible for an annual pension of $5.27-million, which would have become $5.8-million if Mr. Shaw had continued as CEO until he turned 65. The circular did not explain the change. The amount is unusually high for someone who is retiring in middle age - even higher than the pension for his father, who founded the company.
Moreover, the pension payments will come out of annual cash flow - a point of continuing interest to the shareholders. But public policy may be less concerned with internal governance than with the external effects of a protected position on customers: higher prices resulting from imperfect competition.
Canada should consider removing nationalistic ownership restrictions; there are more direct ways to encourage Canadian culture. Failing that, specially protected industries such as broadcasting should be held to a higher standard of corporate governance - at the very least to greater explanation of extraordinary compensation, and not just tucked away in a footnote.