Canadian HR Reporter

PM40065782 RO9496 May 18, 2015 Barrick Gold chairman of the board John Thornton speaks during the company's annual general meeting for shareholders in Toronto, April 28. Barrick shareholders voted to reject the gold miner's controversial executive compensation plan and the company responded by saying it would revamp its executive pay policies. INSIDE INTRODUCING... OUR HR AWARDS We're celebrating the best of the best — nominations are now open Addicted to drugs Hospital found to discriminate against nurse with addiction page 5 Follow the leader Leadership is important — but so is followership page 10 Getting a grip 5 CEOs offer insights on succession planning page 15 page 22 Credit: Mark Blinch (Reuters) Emplo y ment Law Today Canad a ian www.employmentlawtoday.com www.EmploymentLawToday.com Expert opinions from the best employment lawyers in Canada CELT1504-2015 ad.indd 1 2015-01-09 11:07 AM Executive comp debate gains momentum Will Seattle CEO's self-imposed pay cut add fuel to the fi re around C-suite salaries? BY LIZ BERNIER CONTROVERSY over execu- tive compensation is nothing new, but it's an issue that's been grab- bing headlines over recent weeks. CIBC shareholders voted against a generous pay package for out- going executives last month in a non-binding say on pay vote. And Barrick Gold said it is "re-examin- ing" its approach to executive pay after 75 per cent of investors voted against its executive comp plan. Putting a new spin on the issue was Dan Price, founder and CEO of Seattle-based Gravity Pay- ments, who slashed his own salary from just under US$1 million per year to US$70,000 — while raising the minimum salary for his 120 employees to US$70,000. Before the reallocation, the av- erage salary for employees was about US$48,000, according to Forbes. e raises will be phased in over a period of three years. " ere's greater inequality today than there's been since the great recession," Price told the Huffi ng- ton Post. "I'd been thinking about this stuff and just thought, 'It's time. I can't go another day with- out doing something about this.'" ere will be some sacrifi ces, said Price. "But, once the compa- ny's profi t is back to the US$2.2- million level, my pay will go back. So that's good motivation." e impact on employees will undoubtedly be positive — but it may not last as long as we might imagine, said Bob Levasseur, se- nior consultant and principal at McDowall Associates in Toronto. "One of the things that has astonished me the most about compensation is... people forget very quickly about compensation. ere are so many other factors that make your workplace one that you want to stay at," he said. "A change in compensation usually has a very short-term ef- fect. You still come into the same place; if your boss irritates you, your boss will continue to irritate you." Depending on how the raises are structured, there's also the potential risk of stirring tensions and resentments among employ- ees, said Rick Schubert, associate partner, executive compensation, at Aon Hewitt in Toronto. "Let's assume that everybody currently is being paid roughly ac- cording to market. So somebody making $75,000 would have skills and experience that somebody making $35,000 wouldn't. Put yourself in the position of the em- ployee making $75,000." And in a large organization, bumping employee pay to levels much higher than market value invalidates much of the work HR does, said Levasseur. "First of all, you have an HR department that has spent a lot of time, expense and whose PRIVATE > pg. 8 Hidden camera put to the test Monitoring of principal's offi ce raises privacy concerns BY SARAH DOBSON THE CAMERA was hidden in a clock, discovered by a janitor. It had been in the school principal's offi ce for months because he was suspected of writing a book during work hours, according to media reports — which is why the To- ronto District School Board found itself in the hot seat recently, facing allegations of "invasion of privacy." e situation raises, yet again, questions around covert surveil- lance in the workplace and the legalities involved. To be fair, there's no straightfor- ward answer, according to Lyndsay Wasser, a lawyer at McMillan in Toronto, adding there's a compli- cated framework involved, espe- cially in Ontario. For one thing, there's public sec- tor legislation that would apply to a school board, and it has a pretty broad exemption for employment records. e act does not apply to "records collected, maintained, prepared or used by or on behalf of an institution in relation to meet- ings, consultations, discussions or communications about employ- ment-related matters in which the institution has interest," she said. "So the students and the parents who might have been in the offi ce, if they were caught on tape, might have a MFIPPA (Municipal Free- dom of Information and Protec- tion of Privacy Act) complaint but whether the principal does or not is a diff erent story because of this broad exception." Then there's the Canadian Charter of Rights and Freedoms, and there's defi nitely case law that says it can apply, said Wasser. "So was this a breach of the IS > pg. 14 HR helps drive change at HBC Merger with Saks prompts overhaul of systems, processes BY SARAH DOBSON THE Hudson's Bay Company has a storied history in Canada, stretch- ing back to the 1600s. e chain has seen more than a few changes over the years, most recently with NRDC Equity Partners acquiring HBC in 2008 and HBC then ac- quiring Saks in 2013. As a result, HBC is both a really old and a really new company, ac- cording to Stephen Cerrone, ex- ecutive vice-president of HR and CHRO at HBC in New York. Not surprisingly, these upheav- als have led to a transformation for HR that's driven from a new business strategy around HBC and Saks merging, said Cerrone, who spoke on the matter at a Re- tail Council of Canada conference in Mississauga, Ont., in April and later in an interview with Cana- dian HR Reporter. Leadership Focusing the business began with the leadership team. Of 11 people reporting to the CEO, 10 were new to their roles. One-half were promoted internally and one-half were hired externally. "From an HR perspective, putting these people in these roles (meant) massive development TALENT > pg. 6

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