Coast Capital Continues to Withhold Information Explaining The Circumstances Under Which The Board of Directors Earn Their Remuneration.

This is what we asked about the circumstances associated with meeting fees paid to the Board of Directors:

(a) How often did Directors phone the meeting and collect $1020.00 for “attending”?

(b) How often did Directors collect more than one meeting fee a day?

2011 meeting fees are $40,000 to $70,000+ per Director but Coast Capital refuses to answer. However, in an email they wrote:

We have responded to numerous information requests in an open and transparent manner with detailed explanations and relevant links to our website.”

Why is Coast Capital refusing to answer two simple questions?  Is it possible that “phone attendance” or “multiple meetings in one” day is so prevalent that the Board is embarrassed to release the data?

This is members’ money and we believe members are entitled to explanations.  Phone “attendance” or collecting more than one meeting fee a day is opportunistic.  Both of those practices are not allowed by the vast majority of Boards other than in very unusual circumstances.

Do you think members are entitled to have the questions answered?

Coast Capital Savings Credit Union Directors – Are they Elected or Appointed?

On March 21st Coast Capital Savings will mail out an election package.  When members open the mailing it will be the first information we receive concerning the candidates, including their names.   Voting begins the very next day, March 22nd.  This is an innovative way to hold an election – unknown candidates, no issues and no campaign.  Would you like to ask the candidates their thoughts on current Director Remuneration?  I would like that opportunity.

How can members make an intelligent choice between the candidates when we have no information?  The election package will identify the Nominating Committee’s “recommended candidates”.  The “recommended candidates” ALWAYS win because members have no basis to cast their vote otherwise.  So in effect, the candidates are appointed to the Board through the Nominating Committees recommendation.

The process is flawed and we need to fix this. What do you think?

Board of Directors – The Right Skill Set Might Be Missing

At Coast Capital Savings, over 90% of member’s money is invested in real estate loans. This can be risky so it is important to have experts that understand this industry on the board. Current Board members lack any significant real estate expertise.  We don’t know who the candidates will be for the upcoming election on March 21st but hopefully this issue will be addressed.

How the board candidates for the upcoming election are chosen, and how the skill set of those candidates are evaluated is important. It is your money and your credit union. Have a say on who is on your board at the AGM in April. For an interesting article regarding the selection of Board members at the Greater Victoria Harbour Authority, click on this link.

How does Director Pay compare to Executive Pay at Coast Capital?

Good question.  We don’t know because the disclosure of Executive Pay is minimal so no real comparison can be made.  The Board does not see Executive Pay disclosure as a priority.  At the 2008 AGM the Chairman of the Board in responding to a member question about greater disclosure of executive compensation said “we are working on it – expect something next year”.

In November 2012, in response to a suggestion for greater transparency, we received this response from Coast Capital:

“Regarding executive compensation, we believe that our current level of disclosure appropriately balances the interests of the members in transparency with the privacy interests of our employees.  Our current practices exceed what is required by the laws applicable to us.  We comply with International Financial Reporting Standards and disclose the aggregate compensation of our executives in our financial statements.   We have also voluntarily disclosed our executive compensation philosophy in our annual report.  Further while the Board continues to consider enhanced compensation transparency, British Columbia’s privacy legislation remains an obstacle to the disclosure of individual executive compensation.

Both director and executive compensation is established through the use of independent consultants who use appropriate market-based comparators in making recommendations to the Board. The Board is accountable to members for its decision-making through the director election process.” (my emphasis)

In other words, the Board is meeting the minimum requirements of the laws and reporting standards applicable to Coast Capital.  We believe a cooperative should be leading in good governance practices; not waiting to be forced to disclose information that commons sense says should be available to the owners who happen to be the members.

According to the BC Privacy Commissioner’s office there is no privacy breach if the compensation of the, say, top three executives is disclosed as one total amount. That is not an ideal solution but telling members how much they are paying, in total, to the top three executives, would be a big improvement.  Coast Capital says no, we won’t do that – go get the law changed and we will comply. 

The ideal solution is for the executives to waive their privacy on this matter so the level of disclosure complies with the minimum required of public companies.

Regulators around the world are pushing very hard on the disclosure issue – why are we lagging?

Our Special Resolution on Director Pay is going to a Vote

Pay for the board of Directors at Coast Capital has skyrocketed by as much as 500% in 5 years since 2007 when Members lost control over their pay increases. This is wrong and you can help fix it! Our special resolution for returning control of Board of Director pay back to the members is going to a vote! The voting period will take place from March 22 to April 16, 2013 and the results will be announced at our AGM on April 30.

A special resolution booklet with voting information will be mailed to all eligible voting members on March 21. Paper ballots will be sent to all eligible voting members and will also be available in our branches. Online banking members will have the option to cast their ballot through the Coast Capital Savings website.

Next Steps: Together we can fix this!

Pay for the board of Directors at Coast Capital has skyrocketed by as much as 500% in 5 years since 2007 when Members lost control over their pay increases. This is wrong and you can help fix it if you are a Member of Coast Capital Savings Credit Union.

We believe that we now have enough signed petitions thanks to you all to force a vote on restoring Member control to Board of Director pay increases. We expect our resolution will be tabled for a vote as part of this years AGM in a couple of months time. Look for our resolution in the mail and be sure to vote to restore Member Control over Board of Director pay!

Please tell your friends to vote on this upcoming resolution as well. And tell them about our Facebook page at facebook.com/CoastCapitalCompensationWatch, and of course tell them to visit our website www.CoastCapitalCompensationWatch.com

It’s your money! Every dollar paid for Board remuneration is a dollar not available for member services or employee costs.