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Crescent Point Energy Corp. is overhauling its approach to executive compensation as a result of a less-than-desirable outcome of a “say on pay” vote, as the movement increasingly changes the way companies in the oilpatch reward their top managers.

At the same time, the company revealed that it has already cut its CEO’s 2014 pay package by 30 per cent.

Crescent Point shareholders will get a chance to vote at the company’s annual general meeting, scheduled for May 7, on what the company is calling its new “long-term incentive plan.” The plan would tie management’s pay to the company’s three-year past performance rather than expected outcomes forecasted three years out.

In a letter to shareholders, Crescent Point director Hugh Gillard writes that the company’s new incentive plan “intentionally differs from most peer plans in that it is a three-year look-back plan as opposed to a three-year look-forward plan.

At Crescent Point’s annual meeting last year, shareholders demonstrated their dissatisfaction with the board’s current approach to executive compensation, with just 57 per cent voting in favour of it. A November 2014 report from Osler, Hoskin & Harcourt LLP noted the average approval level for executive compensation programs in Canada was 91.36 per cent last year.

Crescent Point’s willingness to redesign its compensation plan as a result of the shareholder vote on executive pay makes it the latest major oil company to do so, since Canadian Natural Resources Ltd., responding to its own shareholders’ discontent in 2013. Elsewhere in the oilpatch, Cenovus Energy Inc., AltaGas Ltd., Canadian Oil Sands Ltd., ARC Resources Ltd., and Penn West Petroleum are among several companies that have introduced the prerogative to have a say on pay.

More and more Canadian companies are offering their shareholders the right to vote on management compensation — although the growth rate has slowed. The Osler report shows that between 2011 and 2012, the number of companies involved rose from 64 to 100, then to 128 by 2013. By October 2014, 147 companies were allowing “say on pay” votes, according to the report.

“I think Canadian shareholders and investors are becoming more conscious and aware of executive compensation because the gap is continuing to widen [between executive pay and frontline staff salaries],” said Chris McNelly, CEO of the Human Resources Institute of Alberta.

Crescent Point said in its information circular that it sought input from its 25 largest shareholders before drawing up the new results-based compensation plan. If shareholders vote in favour, the new system will take effect this year.

As it encourages its shareholders to vote in favour of the plan, Crescent Point’s circular notes that president and CEO Scott Saxberg agreed to a 30 per cent pay cut in 2014, when he received $9 million, compared to $12 million the year before.

“A vote against our revised executive compensation would not only require additional time on behalf of the company to create a new plan, but it also presents an added risk of causing employee unease and distraction, and, ultimately, to our ability to focus on our business objectives,” the circular states.

Crescent Point did not respond to a request for comment on Monday.

@ Financial Post
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