By James Langton

(April 9 – 14:20 ET) – Clarica Life Insurance Co. is looking to bump up its directors’ pay, according to its latest proxy circular.

Clarica is seeking to up the annual remuneration for its board from the current aggregate limit of $800,000 to a maximum of $2 million. The firm says that the $800,000 limit was set back in 1998, at which time it was competitive. But the company now says it needs to more than double the limit to remain competitive with other major Canadian financial services companies.

“This change to the maximum annual remuneration for directors is being recommended to give the board the flexibility it needs to be able to devote the significant amounts of extra time that may be required to effectively respond to new financial services legislation, ongoing industry consolidation and other trends in an increasingly competitive and rapidly changing marketplace. In addition, the time already required from directors is approaching the existing budget ceiling.”

In addition to the directors’ pay hike, Clarica also faces a shareholder proposal from renowned bank annual meeting gadfly, Bob Verdun. Verdun proposes that the firm engage an outside auditing firm whose only duty for Clarica would be the preparation of the audited financial statements, and that any organization closely associated with the auditors would be prohibited from providing any services to Clarica.

Management recommends against the proposal, saying its audit committee ensures independence and that it wants to use its auditors for non-audit services. “Shareholder interests are best served by allowing Clarica to have unrestricted access to a wide range of advisors. This allows Clarica to retain the best advisors for the particular circumstances.”