Bank of Montreal | Disclosure of Executive Compensation Pay Metrics at Bank of Montreal

Status
AGM passed
AGM date
Previous AGM date
Proposal number
7
Resolution details
Company ticker
BMO:CN
Lead filer
Vancity Investment Management
Resolution ask
Report on or disclose
ESG theme
  • Governance
ESG sub-theme
  • Remuneration or pay
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Financials
Company HQ country
Canada
Resolved clause
Be it proposed that the Bank disclose, at reasonable cost and omitting proprietary information, enhanced information on the
internal pay metrics used when setting executive target compensation, and to clarify the influence of these metrics on executive
compensation. Internal pay metrics include ratio and percentile disclosures that illustrate how compensation compares between
executives and non-executive employees. This disclosure should address:
a. An explanation of specific internal pay metrics used.
b. A discussion of how these metrics inform compensation decisions for the CEO and senior executives.
Supporting statement
Over recent decades, executive pay has far outpaced that of
average workers. In 2023, for instance, CEO pay increased by 11.3%
among top U.S. companies, while median worker pay decreased by
9.3%1. These widening pay gaps pose risks to economic stability,
erode social cohesion, deepen gender and racial inequities, and
may decrease workforce satisfaction, ultimately impacting
productivity and retention2. As a large financial institution invested
across economic sectors and reliant on human capital, BMO’s
growth and ability to create shareholder value depends on
effectively managing these risks.
BMO’s focus on connecting corporate culture with employee
performance as an integral part of enterprise strategy shows the
company understands the value of investing in its people to
strengthen human capital. Studies show that social comparison
strongly influences behaviour, and employee satisfaction often
depends on a sense of fair compensation3. Shareholders require
increased disclosures on internal pay metrics to assess whether
BMO’s compensation structures support this strategy.
Given Purpose and strategic objectives, including fostering a
“Winning Culture driven by alignment, empowerment and
recognition” are key components of executive compensation,
shareholders seek further clarity on how BMO evaluates this
beyond employee surveys and workforce representation targets.
Expectations for transparency are growing, with initiatives like the
Taskforce for Inequality and Social-related Financial Disclosures
(TIFSD) working toward frameworks that may be adopted under
IFRS Sustainability Standards4.
By explaining the pay metrics used and their role in executive
compensation decisions, BMO can demonstrate to shareholders its
commitment to executing on strategic priorities and its
preparedness for emerging regulations. Although BMO discloses
that the Human Resources Committee considers the ratio of CEO
pay to other employees and Canadian median family income, it
does not specify additional factors or explain how these metrics
influence target compensation.
We ask the Board to report, at a minimum, on the following:
1. Internal Pay Equity Metrics: Describe all pay metrics or ratios
used to assess the pay relationship between executives and
employees.
2. Influence on Compensation Decisions: Explain how these
metrics affect CEO and executive pay-setting and performance
evaluations.
This disclosure is not intended to limit executive compensation but
to ensure shareholders have the information needed to assess
BMO’s management of material regulatory and financial risks.
Enhanced transparency will benefit both BMO and shareholders by
aligning executive compensation with the company’s long-term
organizational health.

DISCLAIMER: By including a shareholder resolution or management proposal in this database, neither the PRI nor the sponsor of the resolution or proposal is seeking authority to act as proxy for any shareholder; shareholders should vote their proxies in accordance with their own policies and requirements.

Any voting recommendations set forth in the descriptions of the resolutions and management proposals included in this database are made by the sponsors of those resolutions and proposals, and do not represent the views of the PRI.

Information on the shareholder resolutions, management proposals and votes in this database have been obtained from sources that are believed to be reliable, but the PRI does not represent that it is accurate, complete, or up-to-date, including information relating to resolutions and management proposals, other signatories’ vote pre-declarations (including voting rationales), or the current status of a resolution or proposal. You should consult companies’ proxy statements for complete information on all matters to be voted on at a meeting.