PROPOSED EXECUTIVE COMPENSATION PROGRAM FOR SUPERIOR NORTH CATHOLIC DISTRICT SCHOOL BOARD
- Cover Letter
- Background Information
- Key Considerations
- Key Development Steps
- Executive Compensation Philosophy
- Executive Accountability & Complexity Matrix
- Proposed Comparator Organizations
- Proposed Executive Compensation Framework
- Executive Pay Envelope and Proposed Maximum Rate of Increase
1. Cover Letter
Dear Community Member,
In 2014, the Government of Ontario began the process of developing public sector compensation frameworks to ensure a transparent and consistent approach to executive compensation. The Broader Public Sector Executive Compensation Act of 2014 (“BPSECA” or “the Act”), introduced by the Ontario Government, applies to all Ontario public sector designated employers, including universities, colleges, hospitals, and school boards. This includes the Superior North Catholic District School Board.
In compliance with the Act, Ontario Regulation 304/16 – Executive Compensation Framework, and Ontario
Regulation 187/17 (“the Regulations”), all 72 Ontario public sector school boards collaboratively developed a comprehensive proposed Executive Compensation Program to support executive compensation management across the Province. This work was completed in consultation with Mercer (Canada) Limited, an independent consulting firm that specializes in executive compensation. The proposed Executive Compensation Program sets out a rational compensation approach for executive positions across all school boards, including those in our Board. The school boards are committed to meeting the intent and goals of the Ministry of Education and Treasury Board Secretariat to ensure responsible and transparent executive compensation management in the Ontario broader public sector.
In the education sector, a competitive, fair, and responsible Executive Compensation Program is vital for attracting and retaining the talented, innovative leadership required to ensure continued progress in student achievement and success. Our proposed Executive Compensation Program balances the need to manage compensation costs and the need to attract and retain the executive talent we seek.
Key sections in our proposed Executive Compensation Program include:
- Executive Compensation Philosophy
- Executive Accountability & Complexity Matrix
- Proposed Comparator Organizations
- Proposed Executive Compensation Framework
- Executive Pay Envelope and Proposed Maximum Rate of Increase
As part of the Government Regulations, all Ontario broader public sector employers are required to conduct a 30-day public consultation on their proposed Executive Compensation Program. Following consultation and review of the input, the final Executive Compensation Program will be posted. If you have feedback on the Program please email Hugh McCorry at email@example.com. We will be accepting public input until 30 days from the date this program is posted on our website. All feedback is appreciated and will be kept on record.
Chair of the Board
2. Background Information
The 72 Ontario school boards of the four publicly funded education systems worked through a Steering
Committee to develop a Province-wide sector-based proposed Executive Compensation Program for Directors of Education, Associate Directors, Supervisory Officers, and other executive positions, as per the Act and the Government Regulations.
The Steering Committee was comprised of leadership from the following groups:
- Association des conseils scolaires des écoles publiques de l’Ontario (“ACEPO”)
- Association des gestionnaires de franco-ontarienne (“AGEFO”),
- Association franco ontarienne des conseils scolaires catholiques (“AFOCSC”),
- Conseil ontarien des directrices et des directeurs de l’éducation de langue française (“CODELF”)
- Council of Ontario Directors of Education (“CODE”)
- English Catholic Council of Directors of Education (“ECCODE”)
- Ontario Catholic School Trustees’ Association (“OCSTA”)
- Ontario Catholic Supervisory Officers Association (“OCSOA”)
- Ontario Public School Boards’ Association (“OPSBA”)
- Ontario Public Supervisory Officers Association (“OPSOA”)
- Public Council of Ontario Directors of Education (“PCODE”)
The school boards across the province and our Board, the Superior North Catholic District School Board, are committed to supporting and ensuring the goals of the Act are met, including:
- Standardization - providing a consistent, evidence-based approach to setting compensation, based on research and consultation;
- Balance - managing compensation costs while allowing the school boards to attract and retain the talent necessary to deliver high-quality public services; and,
- Transparency - enhancing the transparency of executive compensation decisions through public consultation and posting.
The proposed Executive Compensation Program developed for all Ontario school boards is intended to be transparent, evidence-based, and meets the requirements of the Act and the Government Regulation.
At the Superior North Catholic District School Board, the proposed Executive Compensation Program applies to the following designated executives:
|Designated Executive||Executive Class|
|Director of Education||Director of Education|
|3 Superintendents||Supervisory Officer|
3. Key Considerations
The school boards considered the following in the development of the proposed Province-wide Executive Compensation Program, including the proposed Executive Compensation Philosophy and the proposed Executive Compensation Framework:
- The need for common, rational compensation tools and executive management compensation principles that provide consistency / fairness in executive compensation and guidance for individual school boards to make reasonable compensation management decisions
- The need to reduce the current compensation compression that exists between executives and Principals, as salaries negotiated through collective agreements continued to increase during the executive compensation freeze, making it difficult to attract individuals to take on executive level accountabilities
- The need to keep pace with the evolving Ontario market and remain competitive:
- During the public sector executive compensation freeze, Canadian salaries typically increased by 2% - 3% annually and pay structures or grids typically increased by 1% - 2% annually, as per Mercer’s Compensation Planning Surveys
- Based on information from Mercer, over the past five years, salaries in Ontario have also increased by approximately 2% - 3% annually
- Over the past five years, there has been over a 5% change in the consumer price index and an annual inflation rate of greater than 1.3%
- Executive compensation at the Board has been frozen since 2010
- All other employee groups in the province have received increases (most recently, an increase of 11%), except for executives
- The need for external comparisons with the market to attract and retain high quality executive talent; in particular, the Board faces challenges recruiting experienced and qualified executives due to the vast geography covered by the Board’s jurisdiction, the resulting need for systemness and effective leadership, and the high number of opportunities that executives have elsewhere. Executives are also required to participate in continuous training and networking to address the difficulty faced in recruiting and sustaining personnel in all areas. The Board’s Superintendents have fewer other incentives compared to other boards (such as car allowance, gym membership, bonuses, etc.). The Board is facing high attrition from executives due to perceived unfairness and inequity. Further, the Superintendent role must be viewed as competitive in order to bring individuals to the Board and encourage aspiring leaders (i.e. Principals).
- The need for internal equity (including between executives, between Superintendents and Principals – some of whom are being paid almost the same as Superintendents with far less responsibility – and between the Director and with Regional Directors) and a common Framework across the 72 Ontario school boards; in particular, between the Superior North Catholic District School Board, the Superior-Greenstone District School Board, and other Level One school boards
- The Board covers a large geographic area, which creates a high level of complexity in dealing with multiple different townships, municipalities, and community groups
- The need to apply standards of accountability and complexity when determining the appropriate level of each school board, using a Province-wide Accountability & Complexity Matrix with a set of Core and Non-Core factors (see section 6: Executive Accountability & Complexity Matrix)
- The need for a balanced approach between affordability and attraction / retention needs
- The need for individual school boards to have the flexibility and accountability to determine the placement of their specific executives within the base salary range
- The Director of Education at the Superior North Catholic District School Board has an extensive portfolio, which includes responsibilities often held by Superintendents or System Principals at other boards
- Superintendents also have extensive portfolios, without the benefit of a curriculum department or system principals to assist; therefore, Superintendents are responsible for planning, delivering, and facilitating Professional Learning Sessions for educators
- The Board’s executives are required to travel extensively throughout the region, especially during winter months, to support schools, staff, student achievement and learning, visibility, and systemness, including attending meetings
- The Board has attempted to hire a third Superintendent to lessen the workload, but the above challenges regarding recruitment have made this difficult
4. Key Development Steps
Based on the identified key considerations and using common compensation design principles, the Steering Committee, working together with Mercer consultants, developed the Province-wide sectoral proposed Executive Compensation Program.
The development process involved the following steps:
- Formation of a Steering Committee with representatives across each of the types of school boards (e.g., Public, Catholic, English, French)
- Collection of organization, job, and compensation information from Directors of Education, Associate Directors, Supervisory Officers, and other executives through the use of an Excel / online questionnaire
- Development of a consensus-based Executive Accountability & Complexity Matrix, taking into consideration analysis on the data collected
- Development of a consensus-based proposed Executive Compensation Philosophy through experiences from the Steering Committee as well as past recruitment practices
- Development of a consensus-based proposed Executive Compensation Framework, using common compensation design practices and constructs
5. Executive Compensation Philosophy
Executive Talent Needs
The school boards require highly skilled and highly principled leaders to lead the organization in providing, promoting and enhancing publicly funded education. Student achievement and success is a critical public service and requires innovative leadership to further advance the current public education system, taking into consideration technology advances that can assist with student learning. In their leadership capacity, executives are required to work and communicate with a variety of unique community groups, Government, and other stakeholders, understanding and taking into consideration the school board’s population diversity when making decisions (i.e., spoken languages, socio-economics, and differing abilities of students, parents, and other community members).
Directors of Education and Academic Supervisory Officers are typically recruited from the education sector (often within the school boards). Recently, there has been difficulty attracting and retaining executive talent at the school boards, due to the compensation compression resulting from executive compensation freezes and increasing Principal and Teacher salaries through collective bargaining. There have also been challenges attracting and retaining Business Supervisory Officers and other executives, who often have increased opportunity for alternative employment. These executive jobs are typically recruited from a variety of broader public sector organizations, as well as private sector organizations.
Further, the key considerations outlined above also inform the Board’s executive compensation philosophy. In particular, the executives at the Superior North Catholic District School Board have increased responsibility due to the large and remote geographic area that the Board covers, the number of municipalities and regions the Board serves, and the numerous community partners with which the Board works. The large geographic scope requires high-quality executive leadership and ongoing training to improve recruitment efforts. It also requires executives to travel extensively throughout the region. This further hampers recruitment and retention efforts, and must be considered when determining executive compensation going forward. The Board must also address the compression that exists between executives and Principals, the perceived inequities that result from the seven-year compensation freeze, and the fact that Board executives do not receive many forms of compensation that other board executives do. Finally, the executives at the Board have extensive portfolios, and the complex nature of their roles must be reflected in their compensation.
The school boards provide maximum compensation for executives up to the 50th percentile of the selected external comparator organizations, as per the Government Regulations. Compensation for school board executives consists of base salaries, pensions, and benefits. Each component of compensation plays an important role in the attraction, retention, reward, and recognition of the executives needed to carry out the school board’s mission.
Base Salaries: Base salaries provide regular compensation to executives for their contributions to the organization. The proposed Provincial Program outlines a base salary range for school board executives. Individual base salaries may vary across executives considering their tenure, experience, relative accountabilities, and relative scope within the organization and across school boards.
Pension and Benefits: Consistent with the Government Regulations, our school board provides similar pension and benefits arrangements to those provided to non-executive managers in our board. Additional coverage or elements are only provided to executives if there is a critical business need and / or it is needed for the effective performance of the executive’s job.
6. Executive Accountability & Complexity Matrix
An Accountability & Complexity Matrix was developed to systematically group the school boards into seven levels. This Matrix uses a set of five Core and two Non-Core factors to rate, rank, and review each school board based on accountabilities, size, and other complexity criteria.
The table below presents the five Core factors:
|Core Factors||Level 1||Level 2||Level 3||Level 4||Level 5||Level 6||Level 7|
|Dimensions||P1 < P20||P20 < P40||P40 < P60||P60 < P80||P80 < P99||P99 +||P99 ++|
|Projected Operating Budget
|$1 - $60||$61 - $140||$141 - $230||$231 - $380||$381 - $1,500||$1,501 -$2,500||$2,501 +|
|Number of Schools||1- 20||21 - 35||36 - 50||51 - 85||86 - 200||201 - 400||401 +|
|Projected Enrolment||1 - 4,700||4,701 - 9,700||9,701 - 17,900||17,901 - 33,900||33,901- 99,550||99,551 - 200,000||200,001+|
|Number of Full-Time
|1 - 290||291 - 660||661 - 1,180||1,181 - 2,220||2,221 - 7070||7,071 - 10,000||10,001 +|
|Number of Superintendents||1 - 2||3 - 4||5 - 6||7 – 9||10 - 20||21 - 25||26 +|
The table below presents the two Non-Core factors that may have been used to modify the school board level.
|Geographic Complexity||Takes into consideration the size of the board (i.e. square kilometres), but more so the complexities that typically arise from having to manage a broad set of differences/complications across a geography. This also relates to interacting with multiple municipalities, townships, or community groups, as well as the potential requirement to effectively interact with stakeholders in multiple languages or with significant cultural differences.|
|Community Partnerships||Takes into consideration the typical nature of the relationships and associations with First Nations bands or other community partners within a board’s geography/mandate; and the added diversity and complexities that can be associated with multiple First Nations’ and/or community partnerships.|
Based on the Accountability and Complexity Matrix, our Board is a Level One.
7. Proposed Comparator Organizations
The Government Regulations stipulate that a minimum of eight comparators must be used in the Comparative Analysis and development of the Executive Compensation Framework. In addition, all comparator organizations must be comparable with respect to three or more of the following factors:
A. The scope of responsibilities of the organization's executives
B. The type of operations the organization engages in
C. The industries within which the organization competes for executives
D. The size of the organization
E. The location of the organization
Comparable positions generally include those that are similar with respect to essential competencies (knowledge, skills, and abilities), relative complexity, and the level of accountability associated with the position. The Director of Education executive class is compared to the head of an organization (e.g., President or Chief Executive Officer) and the Supervisory Officer executive class is compared to the Vice President level at comparator organizations.
A set of proposed comparator organizations was developed taking into consideration the factors outlined above, the markets that the school boards compete for executive talent, and the size and complexity of the school boards in each level. There are nine comparators for each school board level and a total of 41 comparators, with an approximate 78% weighting on education-focused organizations. While of the factors outlined above are important, size is a key consideration when doing compensation comparisons and was used in the selection of all comparators. The table below outlines the comparator organizations in our level. In addition to these comparators, the school boards conducted a series of internal analyses and the current compensation levels and practices at all 72 school boards were considered in the development of the proposed Framework. Each school board was compared to every other school board through the Executive Accountability & Complexity Matrix.
|Market Segment||Level One Comparators (N=9)|
|Education (N=7)||Algoma University, Canadore College, Northern College, Rainy River District School Board, Education Quality & Accountability Office, Ontario Arts Council, Science North,|
|Broader Public Sector (N=2)||City of Orillia, Ontario Government Executive|
8. Proposed Executive Compensation Framework
The proposed Executive Compensation Framework sets the base salary ranges for each of the school board’s designated executives and was developed using common compensation management principles as well as the proposed external comparators identified in section 7, Potential Comparator Organizations.
The base salary range maximums are less than the 50th percentile compensation cap. As per the Government Regulations,the compensation cap was calculated using the maximum total cash compensation provided to comparable positions at the proposed external comparator organizations. The base salary range minimums were developed using a relatively common percentage range spread from the minimum to the maximum of the range. The base salary ranges for the Directors of Education are slightly larger as it is considered a “career range”, the top position within the school board where an executive may stay within the position for many years. The executive ranges increase across the seven levels as there is increasing job variability.
While the Act and Government Regulations do not specifically require the development of ranges, base salary ranges were developed, so executives can be differentiated and paid appropriately, considering internal equity and consistency, as well as other individual characteristics, such as tenure, experience, and their relative accountabilities. Therefore, executives may be paid at different levels within the range based on these criteria.
The base salary ranges were developed taking into consideration the Principal salary grids (up to the end of the 2017/2018 school year). In order to reduce the compression and attract school board employees to executive positions, we strive to maintain approximately a 5% differential between the executive minimum and the maximum Principal salaries. As a result, the proposed Executive Compensation Framework may need to be revisited based on future collective bargaining or changes to collective agreements related to Teacher and Principal compensation.
The table below details the base salary range minimums and maximums for the Directors of Education, Associate Directors, and other executives (including Supervisory Officers).
Base salaries are presented in CAD $000’s
|School Board||Level 1||Level 2||Level 3||Level 4||Level 5||Level 6||Level 7|
|Directors||$166 - $198||$176 - $218||$192 - $237||$208 - $257||$224 - $277||$239 - $296||$255 - $316|
|Associate Directors||$158 - $166||$167 - $176||$183 - $192||$198 - $208||$213 - $224||$228 - $239||$243 - $255|
|Executives||$140 - $157||$140 - $166||$140 - $176||$140 - $185||$140 - $194||$140 - $204||$140 - $213|
The table below details the Director of Education, Associate Director, and Executive base salary ranges for Level 1 school boards, including our Board:
|Director of Education||$166 - $198|
|Associate Directors||$158 - $166|
|Executives||$140 - $157|
9. Executive Pay Envelope and Proposed Maximum Rate of Increase
The Government Regulations requires the calculation of a pay envelope (total of all actual base salaries paid to executives) and an annual maximum rate of increase. The table below outlines the pay envelope at the Superior North Catholic District School Board and the proposed maximum rate of increase.
|Envelope||Proposed Maximum Rate of Increase|
The table below details the rationale for the proposed maximum rate of increase relative to the factors outlined in the Government Regulations.
|Factor||Proposed Maximum Rate of Increase|
|The financial and compensation priorities of the Ontario Government||The Government has identified a need to take a balanced approach to managing public sector compensation, recognizing the need to maintain a stable, flexible and high-performing public-sector workforce that supports the government’s transformational priorities and at the same time ensuring that public services continue to remain affordable. For executives, the Government wants to ensure that broader public-sector organizations are able to attract and retain the necessary talent to deliver high-quality public services while managing public dollars responsibly. The Board must also address the compression that exists between executives and Principals, the perceived inequities that result from the seven-year compensation freeze, and the fact that its executives do not receive many forms of compensation that other board executives do. As well, the executives at the Board have extensive portfolios, and the complex nature of their roles must be reflected in their compensation.|
|Recent Executive Compensation Trends||The school boards closely considered both executive compensation trends within the broader public sector as well as the sectors from which the school boards attract executive talent. The following trends reflect the findings of Mercer’s most recent compensation planning study: -Canadian broader public sector average executive compensation increases are projected to be 2.6%; and, -Canadian services (non-financial) average executive compensation increases are projected to be 2.8%.|
|Comparison of Percentage of Operating Budget for Executive Salaries between our Board and its
|The school boards regularly review the appropriateness of their executive organizational structures and staffing and believe that they are appropriate given the complexity of the organization, and do not warrant an overall reduction in the annual maximum increase to the pay envelope.|
|The Effect on the Ability to Attract and Retain Talent||The school boards have difficulty attracting and retaining executive talent as Principal and Teacher salaries continued to increase, resulting in significant salary compression. The proposed maximum rate of increase must consider increases for represented jobs within the organization, as they are an important source for attracting talent to future executive positions. The proposed maximum rate of increase must provide the flexibility required to balance affordability with the need to avoid long-term pay compression, or inversion, between layers of management and between management and the bargaining units. Executives at the Superior North Catholic District School Board have increased responsibility due to the large and remote geographic area that the Board covers, the number of municipalities and regions the Board serves, and the numerous community partners with which the Board works. The large geographic scope requires high quality executive leadership and ongoing training to improve recruitment efforts. It also requires executives to travel extensively throughout the region. This further hampers recruitment and retention efforts, and must be considered when determining executive compensation going forward.|
|Any Significant Expansion that is Not a Result of Restructuring||Not applicable, beyond the large geographic scope applicable to the Superior North Catholic District School Board.|
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