The British Columbia Investment Management Corp. said on April 4, 2019 it will vote against the proposed merger of Goldcorp Inc. and Newmont Mining Corp., highlighting its disapproval of a $US12 million retirement allowance for Goldcorp’s chair.

“The retirement allowance is almost triple the previously disclosed entitlement of US$4.5 million,” said the BCI in a press release. “This is inconsistent with the governance principle of pay-for-performance and sets a troubling precedent in the capital markets.”

As a long-term investor, the BCI highlighted the value it places on good corporate governance, noting compensation practices are a key component.

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 “BCI finds this decision to be fundamentally misaligned with the interests of shareholders who have experienced a significant destruction of almost 53 per cent in value since 2006,” said Daniel Garant, senior vice-president of public markets.

This is significant because it’s unusual for the BCI, and pension plans more generally, to publicly announce in advance how they intend to vote, says Kevin Thomas, executive director of the Shareholder Association for Research and Education. “That’s why we commend BCI for having done so because it is unusual for large pension plans to announce such a strong position publicly.”

That said, it’s becoming more common for pension funds to announce their voting plans, he adds, especially on controversial issues— for example, shareholder proposals around climate change.

“And I think that’s a really positive step because the vote is a powerful tool and if more people speak out about the issues that are of concern than I think boards will have to start to listen. They’ll know that their shareholders are going to be vocal and they’re going to be public.”

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Rosanna Landis Weaver, program manager for CEO Pay at U.S.-based As You Sow, agrees this announcement is a positive step. “What this does is it allows other shareholders to understand what BCI is doing and potentially follow their lead on this.”

Referring to the phrase “sunlight is the best disinfectant,” Weaver notes this applies when it comes to disclosure. “The more disclosure, the better, and I think it is helpful for other shareholders to understand how BCI is thinking.”