DIRECTOR COMPENSATION COMPENSATION GOVERNANCE
The GCR Committee is responsible for reviewing director compensation and recommending to the Board the amount and structure of director compensation. Our director compensation program is designed to attract and retain qualified individuals to act as directors of CWB, and to compensate these individuals appropriately for their time and effort in overseeing the effective governance, management and operation of CWB. It is also designed to align with shareholder interests and to reflect market terms and best practices.
Mr. Fowler does not receive any fees for acting as a director because he is compensated in his role as President and CEO of CWB. Other than Mr. Fowler, directors are not eligible to participate in the ESPP, PSU Plan, RSU Plan, or SIP.
The GCR Committee has the authority to retain consultants, including a compensation consultant or advisor, as the committee may determine necessary or advisable to carry out its responsibilities.
The GCR Committee reviews director compensation on an annual basis to confirm that director compensation meets the objectives set out above. The GCR Committee benchmarks our director compensation levels against two market data references: the comparator peer group used to evaluate executive compensation described on page 39; and the Largest Canadian Banks. The Largest Canadian Banks are considered a relevant peer group for our director compensation, as these financial institutions all utilize a similar regulatory and risk approach for capital and risk management. We have been operating in a comparable risk framework for several years. As a result, the time and effort to exercise effective director oversight of a complex financial institution in a heavily-regulated environment has increased significantly. Director compensation will generally be positioned as a consistent percentage of the median director compensation value at the Largest Canadian Banks, taking differences in company size and breadth of business lines into account. The GCR Committee also considers the risks, responsibilities, workload, time commitment, and the skills required of the Board in light of the evolving complexity of our business and increased regulatory oversight and scrutiny. In 2022, management, with assistance from Meridian, reviewed benchmark compensation data related to director compensation, and potential changes to the compensation program for directors. Based on the benchmarking process described above, the Board approved certain changes to director compensation and the GCR Committee approved changes to director equity requirements, with changes effective May 1, 2023, as outlined below. We believe that these changes reflect the increased responsibilities, workload, and ti me commitment required of CWB’s directors, given the increased complexity of CWB’s operations. There had been no increase to the annual director retainers since 2019. RETAINERS AND FEES The Board believes in a simple, transparent, and easy to administer director compensation structure. We compensate directors on an annual flat fee basis to cover all aspects of their workload and responsibilities as directors of CWB. Directors provide services outside of Board meetings, including engaging with management, regulators, investors, external advisors, and other third parties (such as proxy advisory firms). They also review significant volumes of materials and are required to be available to advise management, engage with shareholders, and consider corporate opportunities. The flat fee structure reflects these ongoing responsibilities. Meeting attendance fees apply for the LAP because the workload and number of meetings may vary significantly from year to year. Directors are reimbursed for travel and other expenses when they attend meetings or conduct business on behalf of CWB Financial Group. All directors are expected to serve on two committees (including one of either the Audit or Risk Committees) as part of their Board service and in exchange for their Board retainer. Any director serving on both the Audit and Risk Committees (other than the Chair of the Board) currently receives an additional $16,500 cash retainer in recognition of the significant workloads associated with each of those committees. Director compensation is paid after each quarter in arrears. The table below sets out our current director compensation structure, as well as the old compensation structure in effect prior to May 1, 2023.
DIRECTOR COMPENSATION COMPONENTS
May 1, 2023 Onwards ($)
Prior to May 1, 2023 ($)
Director Retainer (Annual)
Chair of the Board
365,000
350,000
Director
190,000
175,000
Committee Chair Retainers (Annual)
Audit Committee, Risk Committee
40,000
35,000
HR Committee
30,000
25,000
GCR Committee
30,000
20,000
LAP
11,000
10,000
Committee Member Retainers (Annual)
Audit Committee, Risk Committee
None
None
HR Committee
None
None
GCR Committee
None
None
Additional Retainer for director serving on both Audit and Risk Committees
16,500
15,000
Meeting Attendance Fee (per meeting)
LAP
1,650
1,500
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