Review of City of Toronto Guiding Principles for Executive Compensation Policies at City Agencies and Corporations

While the City is not the employer of agency and corporation executives, it supports agencies and corporations to set executive compensation in a transparent, rational, accountable and fair manner, taking into account the responsible use of taxpayer and ratepayer funds. Strategic compensation ensures senior executives are attracted and retained in the increasingly competitive labour market. An independent external review of executive compensation at City agencies and corporations found that their policies were developed using some or all the components of the City's framework, and that most organizations' current policies and practices are consistent with those utilized in the public, broader public, and not-for-profit sectors, and in some cases, the private sector. The review also found key elements of the 2014 Guiding Principles to be sound, prudent, and reasonable but suggested changes in specific areas to better reflect current leading market practice and labour market conditions. The Guiding Principles have been updated to provide flexibility for agencies and corporations while ensuring alignment to market indicators. The amendments include limited use of private sector comparators and incentive pay in accordance with predetermined criteria and within market norms. Utilizing the methodologies outlined in the updated Guiding Principles will result in caps to City agency and corporation executive compensation commensurate with their benchmarks.

3. City Council direct the Boards of Directors of City agencies and corporations listed in Schedule B of Attachment 1 of this report to provide their organizations' Board-approved adopted or amended executive compensation policy to the City Manager by Q1 2024. 4. City Council provide this report to the Boards of Directors of those City agencies and corporations that were not in scope for this review, except for the Seniors Housing Corporation to which the Guiding Principles apply, for their review, reference and use as those Boards deem appropriate. 5. City Council consider the condition set by City Council in Item 2021 EX34.31 (July 19, 2022) as satisfied and permit Toronto Hydro on a go forward basis to amend its current compensation policies, or amend the base or incentive compensation provisions of its existing employment contracts with Toronto Hydro senior executives or to hire any new permanent senior executives.