(July 20, 2023) – In response to the pressing climate crisis, Councillor Dianne Saxe has successfully persuaded City Council to tie executive compensation to TransformTO, the City of Toronto’s ambitious and essential climate action plan. This important precedent may be the first of its kind in Canadian municipal government.
The amendment, endorsed by City Council on July 19, asks all City agencies and corporations to tie their Chief Executive Officers’ (CEOs) pay to their progress in implementing TransformTO.
City agencies and corporations have their own boards of directors, which evaluate the performance of their CEOs and independently set their pay. The city, as their shareholder, sets Guiding Principles for executive compensation, which it asks those boards to implement. Saxe’s amendment added the TransformTO link to the newly revised Principles. The Principles are not retroactive, but will apply to all new executives and newly created positions.
Examples like the Caisse de Depot have shown that giving CEOs personal “skin in the game” improves an organization’s climate performance. By making TransformTO (i.e. climate progress) part of CEO pay, goal setting and performance assessments, this amendment fosters a culture of sustainability and climate responsibility at the highest levels of leadership.
In celebrating the amendment, Councillor Saxe extended a thank you and an invitation. “Thanks to Toby Heaps and Corporate Knights for helping to establish the importance and effectiveness of linking CEO pay to specific environmental metrics. To councillors and mayors in other cities, I hope you will follow suit!”
City Council’s endorsement of the recommendations marks another significant step forward for the Ward 11 Councillor in the fight against climate change in Toronto. For more information, please refer to the City Council action item from July 19, 2023.