One day event including two meals and networking opportunity for compensation & benefits professionals in the GTA, held near Pearson Airport in Toronto.

1. Getting payback from pay by Toronto Training and HR February 2011

2. Contents 3-4 Introduction to Toronto Training and HR 5-6 In the beginning 7-8 Drill A 9-20 What should we be paying…? 21-26 Case studies A-C 27-28 Pay strategy 29-39 Executive pay 40-42 Changing incentive schemes for senior executives 43-44 Drill B 45-46 Graduate salaries 47-48 Expatriates; year-end planning 49-50 Performance-related pay 51-53 Variable pay 54-56 Effective and fair bonus schemes 57-59 What does the future hold? 60-65 Case studies D-F 66-67 Conclusion and questions Page 2

3. Page 3 Introduction

6. Improving employee engagement & morale

8. Page 6 In the beginning… Extrinsic and intrinsic rewards Objectives Direct v indirect reward

9. Page 7 Drill A

10. Page 8 Drill A

11. Page 9 What should we be paying…design professionals?

12. Page 10 What should we be paying…design professionals? FIFTIETH PERCENTILE Solo Designer $52,000 Owner/Partner/Principal $95,000 Creative/design director $91,000 Art director $70,000 Senior designer $61,500 Designer $45,000 Entry-level designer $36,000 Print production manager $60,000 Web designer $55,000 Copywriter $60,000

13. Page 11 What should we be paying…EHS professionals?

14. Page 12 What should we be paying…EHS professionals? Overall $100,000 President or higher $150,000 Vice president $147,500 Director $120,000 Manager $92,000 Engineer $92,000 Specialist $79,250 Coordinator $74,000

15. Page 13 What should we be paying…Project Managers?

16. Page 14 What should we be paying…Project Managers? Resources (Agriculture, Mining, etc.) $120,000 Consulting $116,000 Pharmaceuticals $110,000 Engineering $106,000 Aerospace $105,000 Government $104,832 Food and beverage $102,000 Utility $102,000 IT $100,422

17. Page 15 What should we be paying…experienced IT experts?

18. Page 16 What should we be paying…experienced IT experts? Chief Technology Officer $111,750 - $174,250 Information Technology Manager $88,250 - $127,000 Developer/Programmer Analyst $57,750 – $102,250 Lead Applications Developer $85,000 – $117,500 Software Engineer $73,500 – $112,000 Systems Administrator $53,250 – $83,000 Database Manager $90,000 – $122,500 Senior Web Developer $58,000 – $94,250 Network Engineer $71,000 – $101,750 Project Manager/Senior Consultant $81,500 – $117,000 Systems Security Administrator $81,500 – $112,500

19. Page 17 What should we be paying…healthcare professionals involved in operating theatres?

20. Page 18 What should we be paying…healthcare professionals involved in operating theatres? Overall $73,310 Surgical services director/manager $86,543 OR director/manager $80,657 Clinical director/coordinator $89,800 OR supervisor $71,667 OR business/financial manager $83,708 OR materials manager/coordinator $55,667 Surgical instruments manager $52,667 Other $65,667

21. Page 19 What should we be paying…healthcare professionals involved in infection control & prevention?

22. Page 20 What should we be paying…healthcare professionals involved in infection control & prevention? Microbiologist $57,500 Infection Preventionist $68,381 Infection Control Practitioner $65,203 Infection Control Nurse $57,151 IC Manager $79,031 IC Director $78,714 IC Coordinator $67,575 Epidemiologist $80,833 Educator $67,500

23. Page 21 Case study A

24. Page 22 Case study A

25. Page 23 Case study B

26. Page 24 Case study B

27. Page 25 Case study C

28. Page 26 Case study C

29. Page 27 Pay strategy

30. Page 28 Pay strategy THREE BASIC FACTORS Compensation Perks Happy & healthy working environment

31. Page 29 Executive pay

32. Page 30 Executive pay 1 of 10 FLAWS IN CURRENT PACKAGES The nature of awards and excessive leveraging. Lack of discipline in setting targets and assessing performance. Failure of incentive plans to match timing of payments with risk realization. Failure to integrate risk into incentive plans.

33. Page 31 Executive pay 2 of 10 FINANCIAL STABILITY FORUM PRINCIPLES The board must actively oversee the compensation system’s design and operation. The board must monitor and review the compensation system to ensure it operates as intended. Employees engaged in financial and risk control must be independent, have appropriate authority and be compensated in a manner that is independent of the business areas they oversee and commensurate with their key role in the firm.

34. Page 32 Executive pay 3 of 10 FINANCIAL STABILITY FORUM PRINCIPLES Compensation must be adjusted for all types of risk. Compensation outcomes must be symmetric with risk outcomes. Compensation pay-out schedules must be sensitive to the time horizon of risks-mix of cash, equity and other forms of compensation must be consistent with risk alignment.

35. Page 33 Executive pay 4 of 10 FINANCIAL STABILITY FORUM PRINCIPLES Supervisory review of compensation practices must be rigorous and sustained, and deficiencies must be addressed promptly with supervisory action. Firms must disclose clear, comprehensive and timely information about their compensation practices to facilitate constructive engagement by all stakeholders.

36. Page 34 Executive pay 5 of 10 DRAWBACKS WITH CLAWBACKS A clawback does not encourage prudent performance. It punishes after the fact, which, perversely, can increase business risk by deterring disclosure, a situation that might result in the application of the clawback. Expanding the clawback to deal with excessive risk taking is difficult because the focus needs to be on risk-taking behaviour rather than on an occasional poor result.

37. Page 35 Executive pay 6 of 10 DRAWBACKS WITH CLAWBACKS A clawback forces the company to recover funds from the employee, which is legally and practically difficult. Courts are unlikely to enforce clawbacks unless they are clear and unambiguous. Moreover, the company will need to incur legal and other costs to recover incentive amounts, and the employee may no longer have the funds to repay the amount. Dealing properly with taxation of a clawed-back bonus is complex.

38. Page 36 Executive pay 7 of 10 SYNCHRONIZING THE TIMING OF PAYMENT & RISK REALIZATION Payment of incentives based on results net of realized risks, with payment deferred until the associated risks have been realized. This provides for an integrated result and risk-based incentive. Payment of incentives based on results, with payment held in escrow until the end of the risk realization period. However, it can be complex to assess the effect and quantum risk and properly define the risk-realization period.

39. Page 37 Executive pay 8 of 10 SYNCHRONIZING THE TIMING OF PAYMENT & RISK REALIZATION Payment of incentives in the form of share-based compensation, with the shares held in escrow until the end of the risk-realization period. This allows share price to be a proxy for the real cost of realized risk, which can materially simplify the plan.

40. Page 38 Executive pay 9 of 10 RESPONSIBILITIES OF THE COMPENSATION COMMITTEE Establishing plan terms, set up and targets. Assessing expected pay-out levels. Monitoring performance against expectations and financial realities. Correcting errors. Having the courage to exercise discretion in both directions (increase payments when a plan does not generate a payment in deserved circumstances and decrease payments when the plan terms provide for overpayment).

41. Page 39 Executive pay 10 of 10 RESPONSIBILITIES OF THE COMPENSATION COMMITTEE Allowing discretion requires real trust between the board and the executives, because the flexibility must be in the plan, and with it comes the risk that the board may reduce compensation even when targets are met.

42. Page 40 Changing incentive schemes for senior executives

43. Page 41 Changing incentive schemes for senior executives 1 of 2 Introduce new financial measure(s) Introduce new non-financial measure(s) Introduce new relative measures Increase funding pools Decrease funding pools Add a maximum funding cap, if one does not exist Increase range of performance for corresponding pay-out levels Decrease range of performance for corresponding pay-out levels

44. Page 42 Changing incentive schemes for senior executives 2 of 2 Allow for increased discretion related to pay-outs Allow for decreased discretion related to pay-outs Increase threshold pay-out opportunity Decrease threshold pay-out opportunity Increase maximum pay-out opportunity Decrease maximum pay-out opportunity Provide for mandatory pay-out of all or portion of award in share/share units

45. Page 43 Drill B

46. Page 44 Drill B

47. Page 45 Graduate salaries

48. Page 46 Graduate salaries Educational Services $33,883 Retail/Wholesale Trade $41,805 Government (Federal) $46,874 Financial Services $49,218 Accounting Services $50,371 Consulting Services $55,148 Engineering Services $56,070 Banking (Investment) $60,806 Petroleum & Coal Products $67,630 Healthcare Services (For Profit) $73,728

49. Page 47 Expatriates; year-end planning

50. Page 48 Expatriates; year-end planning Determination of expatriate compensation contacts (stakeholders) Set deadlines Collection tools Determination of expatriate population Reporting

51. Page 49 Performance-related pay

52. Page 50 Performance-related pay FACTORS CONTRIBUTING TO AN EFFECTIVE PAY FOR PERFORMANCE CULTURELeadership support Processes for differentiating performance processes for delivering pay to high performers REASONS FOR HAVING AN INEFFECTIVE PAY FOR HAVING AN INEFFECTIVE PAY FOR PERFOMANCE CULTURE Limited compensation budget Inability for leaders and managers to deliver feedback Lack of leadership support

53. Page 51 Variable pay

54. Page 52 Variable pay 1 of 2 DRIVERS OF CHANGE Better alignment with business strategy Improve company or team performance Create better alignment or line of sight between corporate and individual performance Ensure market competitiveness Reinforce specific business priorities Improve individual performance Improve employee engagement

55. Page 53 Variable pay 2 of 2 DRIVERS OF CHANGE Ensure retention Better balance of fixed and variable costs Ease with which the program can be communicated and understood Satisfy external stakeholders demands (investors, media, community) Comply with regulations or governance requirements Reduce risk

56. Page 54 Effective and fair bonus schemes

57. Page 55 Effective and fair bonus schemes 1 of 2 Eligibility Plan philosophy Performance measures Line of sight Calculation Threshold

58. Page 56 Effective and fair bonus schemes 2 of 2 Payment calculation Percentage of salary Fixed amount To base bonus on a predetermined bonus pool formula Timing Dos Don’ts

59. Page 57 What does the future hold?

60. Page 58 What does the future hold? 1 of 2 The dampening impact on salaries caused by the 2009 economic crisis is subsiding. Most employers are expecting to be in a position to afford more aggressive salary increases than they have implemented in recent years; though not to the same levels as experienced before the economic downturn.

61. Page 59 What does the future hold? 2 of 2 Most employers are deciding it is important to reward employees with more substantial salary increases in 2011. There will be more salary increase dollars available in 2011 to reward and retain top performers. Assuming the economy continues to demonstrate recovery, given the upward momentum highlighted in the survey results so far, it is likely that actual salary increase budgets implemented in 2011 will exceed these preliminary levels.

62. Page 60 Case study D

63. Page 61 Case study D

64. Page 62 Case study E

65. Page 63 Case study E Canada’s top 100 CEOs

66. Page 64 Case study F

67. Page 65 Case study F

68. Page 66 Conclusion & Questions

69. Page 67 Conclusion Summary Questions