On March 15, 2018, the Ontario Securities Commission (OSC) and the Financial and Consumer Affairs Authority of Saskatchewan (FCAAS) released highly anticipated reasons for a combined decision relating to Aurora Cannabis Inc.’s (Aurora) unsolicited take-over bid to acquire CanniMed Therapeutics Inc. (CanniMed). The reasons followed a December 21, 2017 decision in which the OSC and FCAAS, among other things:

  • Permitted Aurora’s use of “hard” lock-up agreements with other CanniMed shareholders to build support for its bid (finding that the locked-up shareholders were not “acting jointly or in concert” with Aurora).
  • Cease traded a tactical shareholder rights plan (poison pill) implemented by the CanniMed board in the face of the Aurora bid.
  • Declined to grant Aurora exemptive relief from the 105-day minimum deposit period.
  • Declined to restrict Aurora’s ability to rely on the exemption from the general restriction on purchases by a bidder to purchase up to 5% of the target company’s shares during the currency of its bid.


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Annual meetings of shareholders of public companies often feature: attendance by a modest number of shareholders, and by the company’s external legal counsel, auditor, investor-relations firm, service providers and other assorted hangers-on; the casting of virtually all votes prior to the meeting by way of proxy; perfunctory reviews of the past fiscal year by the Chief Executive Officer and Chief Financial Officer; and one or two desultory questions from shareholders.  In short, annual meetings haven’t evolved in the last 30 years.  Excitement arises only if activist shareholders storm the meeting or if unionized employees speak, particularly if a strike is threatened or in progress.

It’s time for public companies to bring their annual meetings into the digital age and to use them as an effective means of communicating with a large number of shareholders and with the investment community in general.  A revamped annual meeting may even lead to reduced costs when compared to the traditional model of renting a conference room at a hotel and providing refreshments, as modest as they may be, for shareholders.  Canadian corporate law provides a framework which can be used to increase shareholder access to annual meetings and to maximize the impact of annual meetings.


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Shareholder Control over Executive Compensation under Bill 101

Bill 101, An Act to Amend the Business Corporations Act (Bill 101), proposes a number of updates to the Ontario Business Corporations Act (OBCA). Introduced as a private member’s bill in early March, Bill 101 aims to shift power to shareholders through amendments in areas such as shareholder meetings, shareholder proxies, as well as the election and diversity requirements of directors. Among Bill 101’s most ambitious changes is to provide shareholders with power over executive compensation. These executive compensation amendments build on a trend in which many public companies are voluntarily providing shareholders with a “say-on-pay”. Bill 101’s proposal in this area, however, goes much further by providing shareholders with the unprecedented ability to both propose and approve executive remuneration policies. The implications of this power raises important questions regarding the respective responsibilities and duties of directors and shareholders.

Shareholders’ Current Say-On-Pay

Most Canadian business statutes, including the OBCA and the Canada Business Corporations Act, explicitly provide directors with the authority to fix compensation for directors, officers and employees, subject only to the company’s articles, by-laws and any unanimous shareholder agreement. Today in Canada there are no corporate or securities laws that provide shareholders with the ability to approve, much less propose, executive compensation.

While not legally required to do so, a trend in recent years has seen many publicly listed Canadian companies voluntarily provide shareholders with a vote on executive compensation. These say-on-pay motions are advisory only, with the results not binding the directors’ decisions. Although non-binding, the say-on-pay process is seen as providing shareholders with value by encouraging directors to consider and clearly explain compensation policies to shareholders.

While the voluntary adoption of non-binding advisory votes is steadily increasing, Canada lags behind certain other jurisdictions in both mandating say-on-pay votes and in providing teeth to the votes through binding outcomes (see a recent Timely Disclosure post). For example, the United Kingdom and Australia have mandated periodic shareholder votes on executive compensation policies.


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Canada has proven to provide fertile ground for shareholders activism, in part due to a regulatory landscape that could be viewed as more shareholder friendly than some other jurisdictions. As a result, it is perhaps not surprising that activists have achieved significant success in Canada in recent years. It is apparent that shareholder activism is