Compensation
The Compensation and Governance Committee is responsible for determining the compensation of all senior officers of Matrikon and reviewing the adequacy of director compensation to ensure that it realistically reflects the responsibilities and risks involved in being an effective director.
Director Compensation
As at November 6, 2009, Matrikon has 7 directors, including 6
independent directors and one executive director. Matrikon
defines independent directors according to the definition
contained in Multilateral Instrument 52-110 Section 1.4.
The Corporate Governance and Compensation Committee is
responsible for reviewing the adequacy and form of
compensation of the directors and chair of the Board to ensure
compensation realistically reflects the responsibilities and risks
involved in being an effective director.
Director compensation is made up of two main elements: (1)
director/chair retainer and meeting fees and (2) restricted share
units (RSUs) and are paid only to directors who are not
employees of or consultants to Matrikon.
Retainers and Fees
Effective January 1, 2006, director compensation was structured as follows:
- Annual director retainer: $12,500 per year
- Board meeting retainer: $12,500 per year
- Board chair retainer: $60,000 per year (in addition to the annual director retainer and meeting fee)
- Lead director retainer: $15,000 per year (in addition to the annual director retainer and meeting fee)
- Annual audit committee chair retainer: $12,500 per year (in addition to the annual director retainer and meeting fee)
- Annual compensation and governance committee chair retainer: $10,000 per year (in addition to the annual director retainer and meeting fee)
The Board established a Special Committee during the year to
support certain ongoing initiatives. The committee chair
received a fee of $35,000 and the members of the committee
received a fee of $20,000 in addition to the annual retainer and
meeting fee.
Directors who do not reside in Canada are paid the annual director retainer and annual board meeting fees in equivalent US dollars.
Matrikon also reimburses directors for related travel and out-of-pocket expenses
Total compensation (including expense reimbursements) paid
to all directors during the fiscal year ended August 31, 2009 was
$367,500 (2008: $244,911).
Non-Employee Director Compensation
| Director |
Annual Director Retainer |
Board Meeting Retainer |
Committee Chair Retainer |
Other Retainer2 |
Total3 |
| Hugh Bolton |
$12,500 |
$12,500 |
$- |
$80,000 |
$105,000 |
| Kent Jespersen |
$12,500 |
$12,500 |
$10,000 |
$35,000 |
$70,000 |
| Robert Moore1 |
$12,500 |
$12,500 |
$- |
$20,000 |
$45,000 |
| Michael Percy |
$12,500 |
$12,500 |
$- |
$20,000 |
$45,000 |
| Janice Rennie |
$12,500 |
$12,500 |
$12,500 |
$20,000 |
$57,500 |
| Eric Rosenfeld1 |
$12,500 |
$12,500 |
$- |
$20,000 |
$45,000 |
| Nizar Somji |
$- |
$- |
$- |
$- |
$- |
Notes:
1 Mr. Rosenfeld & Dr. Moore are paid in equivalent US dollars
2 Other retainer includes Special Committee fees
3 No share- or option-based awards were granted to directors in FY2009
Directors’ Shareholdings Requirements
To ensure that director interests are aligned with shareholders’
interests, Matrikon's directors are required to own the dollar-value
equivalent of three (3) times their annual director retainer
in shares after a period of three years on the board. As of
November 6, 2009, all directors owned the equivalent of at least
three (3) times their annual director retainer in Matrikon shares
based on share value at time of purchase.
Shareholdings of Independent Directors as at November 6, 2009
| |
Number |
Value1 |
| Common Shares |
5,585,852 |
$15,361,093 |
| Options |
100,000 |
$Nil |
| Unvested RSUs |
124,500 |
$342,375 |
Notes:
1 Based on closing price of Matrikon shares on November 6, 2009 and taking into
account only options that are currently exercisable and in-the-money
Director Stock Options
Matrikon’s Stock Option plan was discontinued in fiscal 2006.
Under the previous stock option plan, newly appointed or
elected directors received a grant of 50,000 options to purchase
shares. Directors also received annual grants of 10,000 options.
These stock options were only available to non-executive
directors.
The exercise price for options was set at the closing market
price of Matrikon's common shares on the day they were
granted, unless a trading blackout was in effect at the time. In
this case, the exercise price was set at the closing market price
of Matrikon’s common shares on the day following the lifting of
the trading blackout.
RSU Plan
In 2006, Matrikon replaced its Stock Option Plan with a
Restricted Share Unit (RSU) plan. Under the RSU plan, Directors
receive RSUs at approximately the equivalent value to the
options they would have been granted annually under the
Stock Option plan. The RSUs vest over a period of three years.
Once vested, the RSUs convert to Matrikon common shares.
Independent Director Equity Ownership Summary
| |
As at 6-Nov-09 |
As at 5-Nov-08 |
Net Change |
Market Value1
(6-Nov-09)
|
| Director |
Common Shares |
RSUs/
Options3 |
Common Shares |
RSUs/
Options4 |
Common Shares |
Options |
Total |
| Hugh Bolton |
102,947 |
40,000 |
77,746 |
44,500 |
+25,201 |
-24,400 |
$338,104 |
| Kent Jespersen |
87,8772 |
40,000 |
72,6762 |
44,500 |
+15,201 |
-24,400 |
$296,662 |
| Robert Moore |
142,600 |
40,000 |
122,899 |
34,500 |
+19,701 |
-14,500 |
$447,150 |
| Michael Percy |
38,269 |
40,000 |
33,068 |
24,500 |
+5,201 |
-4,500 |
$160,240 |
| Janice Rennie |
55,390 |
40,000 |
30,189 |
74,500 |
+25,201 |
-54,500 |
$207,323 |
| Eric Rosenfeld |
5,158,769 |
24,500 |
3,911,268 |
9,000 |
+1,247,501 |
-4,500 |
$14,241,615 |
Notes:
1Based on closing price of Matrikon shares on November 6, 2009. Market value is the value of common shares held, the in-the-money value of options and the value of unvested RSUs.
2 Includes 3,100 common shares held by associates
or affiliates
3Includes 20,000 RSUs for all directors, with the exception of Mr. Rosenfeld, who has 24,500 RSUs.
4Includes 4,500 RSUs, except for Mr. Rosenfeld. Mr. Rosenfeld had 9,000 RSUs.
Officer Compensation
The Compensation and Governance Committee, composed of
three independent directors, reviews and approves Matrikon's
compensation program for executive officers.
Compensation of executive officers for 2009 was comprised of
three elements, with some variation depending on area of
responsibility and individual objectives:
- Base salary (35-50% of total compensation)
- Short-term incentives in the form of cash bonuses (35-50% of total compensation, except for the CEO where the target is 40-65%)
- Long-term incentive in the form of RSUs (15-25% of total compensation)
Compensation for the chief executive officer, the chief financial officer, and the next three most highly compensated executive officers
(named executive officers or NEOs) is summarized in the following table:
| |
|
|
|
Non-equity incentive plan compensation |
|
|
| |
Fiscal Year |
Salary |
Share-based awards 1, 7 |
Annual incentive |
Long-term incentive |
All other compensation |
Total Compensation |
Nizar Somji 2
President & CEO |
2009 |
300,000 |
11,444 |
100,000 |
NIL |
NIL |
411,444 |
| 2008 |
300,000 |
20,786 |
700,0003 |
NIL |
NIL |
1,020,786 |
| 2007 |
147,500 |
12,555 |
107,322 |
NIL |
NIL |
267,377 |
Jonathan Chia4
Chief Financial Officer |
2009 |
125,000 |
21,921 |
35,000 |
NIL |
2,4008 |
184,321 |
| 2008 |
95,000 |
8,836 |
35,000 |
NIL |
NIL |
138,836 |
| 2007 |
74,231 |
3,438 |
NIL |
NIL |
NIL |
77,669 |
Ian Brown5
Vice President, Europe, Middle East, Africa |
2009 |
275,489 |
NIL |
44,430 |
62,9316 |
2,4008 |
479,661 |
| 2008 |
174,534 |
NIL |
187,668 |
49,9806 |
NIL |
412,182 |
| 2007 |
186,706 |
NIL |
89,482 |
25,6396 |
4,4569 |
306,283 |
Sean Leonard
Vice President, OPC |
2009 |
120,000 |
41,902 |
116,755 |
NIL |
2,2008 |
280,857 |
| 2008 |
120,000 |
51,429 |
91,236 |
NIL |
NIL |
211,236 |
| 2007 |
79,167 |
20,625 |
60,001 |
NIL |
3,5849 |
139,168 |
Mike Brown
Vice President, North America Solutions |
2009 |
170,000 |
46,609 |
35,000 |
NIL |
2,4008 |
254,009 |
| 2008 |
150,000 |
68,572 |
75,04 |
NIL |
NIL |
293,576 |
| 2007 |
150,000 |
27,500 |
9,489 |
NIL |
NIL |
186,989 |
Notes:
1Share-based awards represent vested RSUs. RSUs are valued based on the closing price of MTK on the TSX on the date of vesting.
2Nizar was president & CEO until July 17, 2005, after which he remained CEO until December 10, 2005 when he became chair of the board. On February 12, 2007, he resigned as chair of the
board and became interim CFO. On June 5, 2007, he became president & CEO.
3Nizar’s bonus for 2008 was restated to reflect actual amounts paid out.
4Jon was promoted to chief financial officer on July 8, 2008. Prior to that, he was senior manager of Finance
5Ian is paid in British pounds. The amounts shown above are converted based on the monthly average exchange rate for salary and the exchange rate at the time of payment for all other
compensation.
6Ian’s long term compensation includes $62,931 (2008 - $49,980, 2007 - $25,639) for a contribution to a personal pension fund. This contribution is the equivalent of 40,000 RSUs based on the
grant price and vesting according to the schedule described in note 7.
7RSUs vest over a period of three years, with 25% of the grant vesting in year 1; 33% vesting in year 2 and 42% vesting in year 3. Nizar’s RSUs were granted while he was a director, thus they
follow the director RSU schedule, vesting equally over three years.
8Other Compensation in 2009 is for matched amounts under the Matrikon Employee Share Purchase Plan, which is available to all employees.
9Other Compensation is for common shares received under Matrikon’s Employee Stock Ownership Program (ESOP) valued using the closing price on the date the shares are issued. This program
was available to all employees and was discontinued in fiscal 2007. Ian received 1,341 and Sean received 1,073 shares.
Click here to read the Management Information Circular for additional information.
Please note: Information contained in the Investor section of Matrikon's web site was
accurate at the time of posting, but may have been superseded by subsequent disclosures.