James Langton

(April 6 – 16:50 ET) – Industrial-Alliance Life Insurance Co. is packing golden parachutes and proposing a stock option plan in its new proxy circular.

The firm’s new proxy reveals that Industrial-Alliance adopted an indemnification policy last June, guaranteeing its executives pay-outs if the firm is taken over in the rush to consolidate the insurance industry. The policy specifies indemnities to be granted to certain eligible executives if they lose their jobs within 24 months of a takeover.

Executives will be eligible to receive a lump-sum payment equal to 24 months of base salary, all amounts to be paid under the firm’s proposed new stock option plan, a lump-sum payment equal to twice the average bonuses for the previous three years, employment benefits for up to 24 months, all vacation days earned but not taken, and credited service of up to 24 months for purposes of the supplementary retirement plan.

The firm is also asking shareholders to ratify a stock option plan for directors, members of management and full-time employees. Under the proposed plan, a total of 2,630,652 common shares – approximately 7% of the outstanding shares – would be available for issue.

As at March 5, options to purchase a total of 495,600 shares were outstanding under the plan. President and CEO Yvon Charest, will receive options to purchase 60,000 shares.

The circular says the board considers that options are important: to provide the Company with a share-related mechanism to attract, retain and motivate staff, foster the company’s growth and development and to link management’s remuneration to the value of the company1s shares.