Say-on-Pay in the Canadian Mid-Market Shows Steady Growth and Strong Votes

Say-on-pay voting has become a common governance and risk-mitigation mechanism globally in executive compensation, and is mandatory for public companies in several jurisdictions, including the United States. Say-on-pay provides shareholders with the opportunity to vote on whether they approve of a company’s executive compensation practices. Depending on the jurisdiction, the vote may be binding (i.e. requiring the company to follow the outcome) or non-binding (i.e. advisory).

Although not mandatory in Canada, advisory say-on-pay votes are widely used by publicly listed Canadian companies and are considered a governance best practice.

This article presents our analysis of the 2025 say-on-pay landscape in the Canadian mid-market and how it has evolved since 2020, focusing on 200 Toronto Stock Exchange (“TSX”)-listed companies currently ranked approximately 100 to 300 by market capitalization. Please see our 2023 say-on-pay article here and our 2019 article here.

Prevalence

In 2025, 120 companies held say-on-pay votes, representing 60% of the 200 companies analyzed. This reflects a 38% increase from 2020, when 87 companies (44%) held say-on-pay votes, demonstrating the growing adoption of say-on-pay within the Canadian mid-market. However, the rate of adoption has slowed, declining from roughly 10% year-over-year between 2020 and 2022 to about 2% to 5% annually in more recent years.

The prevalence of say-on-pay also varies by sector. It is most common in sectors such as utilities, energy, and materials, with approximately two-thirds holding votes in 2025, while the finance sector lags behind at only 30%.

The rising prevalence of say-on-pay voting likely reflects:

• Its positive reception among shareholders;

• Its alignment with recommendations from proxy advisory firms such as Institutional Shareholder Services (“ISS”) and Glass Lewis, as well as governance advocacy organizations including the Canadian Coalition for Good Governance (“CCGG”); and

• Increasing expectations from institutional investors.

If this trend continues, say-on-pay adoption may soon approach the usage levels of clawback policies, another widely recognized governance best practice in Canada. Clawback policies allow organizations to recover some or all incentive compensation that was awarded or realized based on inaccurate information, typically resulting from financial restatements or executive misconduct. In 2025, 75% of companies analyzed disclosed having a clawback policy in place.

Voting Results

CGP analyzed the 2025 say-on-pay voting results for the 120 Canadian mid-market companies that held votes. Consistent with prior years, most companies continued to receive strong shareholder support, with the percentage of “For” votes typically falling between 90% and 100%.

One company failed its say-on-pay vote in 2025 (i.e., received less than 50% support), marking its third consecutive failure since 2023, which may be closely linked to its historically poor total shareholder return. On the other hand, one company received only 32% support in its 2024 say-on-pay vote, then saw a remarkable turnaround to 92% support in 2025. This shift may be due to share price performance, which fell nearly 20% in the year before the 2024 vote but rose roughly 40% over the following year.

An additional five companies received low support (between 50% and 75% of “for” votes). Anecdotally, 4 of the 6 companies with voting results below 75% in 2025 are mining companies.

The incidence of failed or low-support outcomes remains relatively consistent with historical levels, as illustrated in the table below, which summarizes the percentage of the 200 companies experiencing failures or low support from 2020 to 2025.

Median and average vote results have also remained stable over the past five years, with medians ranging from approximately 95% to 96% and averages from roughly 91% to 93%.

New adopters of say-on-pay typically receive strong support in their first year. Each year since 2020, the average support across new adopters has been at least 90%, with median support of 95% or higher.

Looking ahead, Canadian companies should continue to monitor evolving governance standards and investor expectations on executive compensation. Boards can use the following checklist as a starting point when evaluating and refreshing their compensation programs to ensure strong say-on-pay support going forward:

1. Compare compensation to company performance: Ensure that compensation packages are weighted towards variable, performance-based pay (e.g. PSUs represent ≥50% of LTI and use clear, well-understood financial and operating metrics) and highly correlated with total shareholder return

2. Conduct ISS / Glass Lewis modeling: Run pay-for-performance screens and address any potential “High Concern” issues before filing

3. Remove structural red flags and strengthen risk controls: Eliminate single-trigger change in control provisions, tax gross-ups, and outsized severance arrangements, and incorporate malus/clawback provisions, negative TSR caps, and windfall guardrails

4. Define engagement thresholds: Set clear triggers for outreach (e.g. <90% “For” votes) and plan engagement accordingly, including publishing a clear responsiveness table if support falls below the threshold

5. Communicate clearly to shareholders: Communicate material design changes and underlying rationale to top shareholders before the proxy is filed, and provide measurable milestones, clear timeframes, and evidence of reduced ongoing LTI for any special incentive grants (if applicable)

6. Calibrate the peer group: Align peers by size, industry, and complexity, and disclose the rationale for peer selection, providing significant justification for the inclusion of any companies from different geographies with higher levels of compensation (e.g. U.S.-based companies)

7. Clarify performance target-setting: Explicitly state formalized targets and explain how they are set, including payout curves, ranges, and caps; use discretion sparingly (i.e. only when there is strong rationale) to calculate or adjust incentive awards

Above all, clear disclosure and a well-thought out compensation narrative will remain essential to earning and maintaining strong say-on-pay outcomes.