Ontario caps salary and performance pay for public sector executives

The government of Ontario has implemented a new framework for executive compensation in the broader public sector, including capping salary and performance-related payments for designated executives who work at hospitals, universities, colleges, schools boards and government agencies.

The framework regulation, which took effect on Sept. 6, 2016, caps salary and performance-related payments for designated executives at no more than the 50th percentile of appropriate comparators. It also prohibits signing bonuses, retention bonuses, cash housing allowances and pay in lieu of perquisites.

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Transparency is also part of the new framework, so employers will have to consult with the public when determining executive compensation programs and to post program details to their websites. Employers will also be required to submit reports attesting that the compensation for their designated executives complies with the framework. Failure to complete this process could lead to penalties.

“This balanced approach will ensure that broader public sector organizations are accountable for compensation decisions and are able to attract and retain the necessary talent to deliver high quality public services while managing public dollars responsibly,” said Liz Sandals, president of the Treasury Board.

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