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Annual Report 2015

corporategovernance

Annual Report 2015

KAREN AND WILFRED, CHILLIWACK

Building a home and financing our business, it’s everything we’ve worked for.

“

Annual Report 2015

2015 has been a year of significant change for all of us at Prospera. I believe change is good, both for people and organizations. It reminds us that anything is possible, keeps us moving forward and gives us the opportunity to stretch and grow as we adjust to the ever evolving world around us.

Early in the year, we made the decision not to move forward with a proposed merger with Westminster Savings and then in May, our long-time President & CEO Bruce Howell retired. This presented us with the chance to infuse new energy into the Prospera team as we continue on our journey to build a better credit union; one that remains dynamic, responsive and financially sustainable for our members and our employees as well as the communities we serve.

In September, we welcomed new President & CEO, Shawn Good. One of Shawn’s very first priorities was to visit every branch and department within Prospera to meet with every member of the Prospera team. He also wanted to meet with as many members as possible and after hearing their stories of how Prospera has helped them, he affirmed that we must do all that we can to ensure that everyone in

our communities has the same opportunity to achieve financial well-being.

Our members have been helping us spread the word about Prospera by sharing personal stories that demonstrate how we’ve helped them reach their financial goals. Members like Lynette, who shared that she was able to pay down more debt in five months with Prospera than she had been able to in the previous three years, thanks to the help she received with budgeting and a straightforward financial plan. Or Frank, who told us how Prospera was there for him during one of the toughest times in his life, saying, “If I didn’t have them in my corner it would have been a lot harder.”

Change compels us to consider the future and gives us an appreciation for the past.

In November, we said goodbye to a man who was a part of our credit union for decades and inspired us all—the inimitable Ron Sweeney, or

Prospera Annual Report 2015 | 3

corporate governance

CHAIR’S MESSAGE


Annual Report 2015

Mr. Credit Union as we affectionately called him. Keeping our communities strong is a core value for us and Ron’s spirit will live on through the Ron Sweeney Community Champion Award (given to a Prospera staff member who exemplifies his love of community and volunteering) and the Ron Sweeney Rising Star Award (given to an exceptional high school student who has made an impact in their community through volunteerism).

Change challenges us to embrace our circumstances.

We are in a time of tremendous economic and social change and there is no question that as an industry financial challenges are still with us. Despite that, 2015 was a year of solid financial performance for Prospera as you can see from our financials. Looking forward, we must continue to manage tight margins, build strong capital and maintain liquidity to meet your needs, but we will continue to build sustainable growth with a focus on quality over quantity and we will do this by staying true to our core co-operative value of people before profits. That core value is at the heart of the new enterprise-wide strategic plan that will be implemented this year.

Change is inevitable.

How we respond to change is what defines our success. We wake up every morning thinking about what we can do to help our members reach their financial goals and how we can help make our communities better for everyone; because of that, I know no matter what challenges we face, together we’re going to make a difference.


Stacey CrawfordChair of the Board


Annual Report 2015

WE certainly live in unprecedented times with low interest margins, new and increased competition and turbulent markets. In this macro environment it is refreshing to have clarity of purpose and guiding values that keep us focused on making a difference for our members. I’m very excited to have joined Prospera and you, our members, on this journey. During the past twelve months we made considerable progress. Here are some highlights:

Following the decision early in the year not to move forward with the proposed merger with Westminster Savings, the Prospera team renewed its focus on ensuring the credit union is responsive to member needs and financially sustainable for members, employees and our communities. Thus began the process to develop a new five-year strategic plan for Prospera.

In April, after leading the credit union for eight years as Prospera’s President & CEO, Bruce Howell announced his retirement. Bruce joined Prospera at a critical time in our history, when we needed to grow capital and adjust our

operating model. Bruce’s leadership righted the organization, positioned it for growth and left it as one of the largest credit unions in British Columbia. It was under his watchful eye that the credit union developed its holistic member-centric approach known as The Prospera Way. In 2015, the executive team continued to expand that approach into a strategy that would encompass all three lines of business (personal banking, wealth and business banking) and align our approach throughout the entire organization.

The strategy is called The integrated Prospera Way and it is a blueprint for how we build mutually beneficial relationships with our members and at the same time develop the tools and resources to truly make a difference for both existing and future members. At the heart of our strategy is the belief that everyone deserves financial wellness and the best way to get it is to have a plan, so that’s something we offer free to every member. Working together on your plan helps us get to really know you and understand what you want so we can provide the support you need to achieve your financial goals—so your success fuels our success and vice versa.

On September 10, I joined Prospera Credit Union as President and CEO. What convinced me that this is where I should be is simple. I believe Prospera is uniquely positioned to make a real difference for our communities because we’re large enough to have influence


“ The secret of change is to focus all your energy not on fighting the old, but on building the new.”

— Dan Millman, The Way of the Peaceful Warrior

PRESIDENT & CEO’S MESSAGE


Annual Report 2015

in the credit union system in Canada, we have the financial strength and scale to make innovative advances, we are well positioned to work collaboratively with other credit unions, and we’re also local enough to know our communities well, to truly care about the people we serve and make a meaningful difference.

I strongly believe that credit unions can’t thrive without member growth and in the past decade many credit unions here in BC and across Canada have seen a decline in their numbers as their membership ages. Prospera traces its origins to a time in our province when there was a very real need that wasn’t being addressed—access to credit for the working class. Times have certainly changed. Today we don’t have the same barriers to credit but instead there is a new crisis on our doorstep; how to handle money, both debt and savings.

According to a recent survey, 40 per cent of Canadians have no retirement savings at all. Sadly, at a time when there are more people approaching retirement than ever before in our history, this includes those aged 55-64 with 40 per cent of that age group saying they have nothing set aside! What’s more, over half of Canadians admit to not knowing how much they should save for retirement, yet many have never asked for help or advice. Debt is also a big concern for many people, with 36 per cent of working Canadians feeling “overwhelmed” by their level of debt.

We don’t want these statistics to be true of people in our communities, that’s why building awareness of Prospera in our markets became an important priority this year. We’re helping our members achieve financial wellness and with the launch of our “Don’t just bank. Prosper.” awareness campaign in September, they’ve been sharing their stories and helping us tell the Prospera story.

Financially, Prospera delivered an exceptional year, well ahead of plan and we invested over $600,000 into our communities and

partnerships. These are strong results given the economic head-winds of 2015, and I’m impressed with the commitment of our staff, leadership, and Board to achieving success in the pursuit of serving members and communities. I would like to thank you, our members, for your support and loyalty to your credit union—together we are building a different way for the next generation of members to bank.

Another important member of Prospera’s executive team retired this year. From his start in 2002 as Vice President, Credit, to his role as Senior Vice President, Risk, Marv Neufeld’s leadership in the areas of facilities management, procurement, investigations and loss prevention, governance, credit and enterprise risk has been a valuable asset to Prospera throughout the past 14 years. We wish him all the best in his retirement.

I’m excited for the future as we leverage the strong foundation of today; high employee engagement, deep member loyalty, financial sustainability and a commitment to making a difference for our members. This is about much more than just financial transactions, this is about your financial wellness. We will make it easy for you to do business with Prospera and we are committed to helping you address your needs, set your goals and realize your dreams.

With courage,

Shawn L. GoodPresident & Chief Executive Officer


Annual Report 2015

Prospera Credit Union’s Board of Directors and Management are committed to acting responsibly, ethically and with the highest standards of integrity to ensure that Prospera’s activities are continually structured and delivered in a manner that allows us to meet the needs of our members.

To achieve this, sound corporate governance business practices and policies have been adopted by the Board and cascaded throughout all levels of the organization. The Board of Directors strives to ensure that its governance is of the highest standard, while at the same time practical and transparent to Prospera members.

The Board’s governance responsibilities include, but are not limited to:

• Managing the Board’s affairs including recruitment, development, evaluation, Board composition and committee structure;

• Approving and monitoring the strategic plan, annual business plan and budgets;

• Selection, evaluation, development and succession planning of the President and Chief Executive Officer (CEO);

• Establishing standards of ethical business conduct and obtaining assurances that they are being adhered to;

• Ensuring compliance with applicable laws, regulations and guidelines;

• Approving and implementing a risk governance framework; and,

• Ensuring accountability and transparency mechanisms are appropriate and effective.

The Board’s governance model has been developed over time and is a blending of practices that are deemed to be most appropriate for Prospera. These practices include the following principles, which have been adopted by the Board:

• The Board governs and Management manages. The Board’s role is to ensure that Prospera has the appropriate management in place. Day to day management is the responsibility of the CEO, who reports to the Board of Directors.

• The Chair and the CEO are the official spokespersons for the Credit Union and a decision made by the Board is a decision that is publicly supported by all Directors.

• Only the Board can make decisions that are binding on the organization; however, the Board may elect to delegate these responsibilities to its standing and ad hoc committees.

• The Board has committed to transparency in its overall governance of Prospera.

• The Board’s Governance Manual which outlines philosophies, structures and methods by which the Credit Union is governed is reviewed biennially and amendments are reviewed and approved by the Board.



As specified in the Credit Union’s Rules, Prospera’s Board of Directors is comprised of nine shareholding members, each elected by the membership for a three-year term. As a whole, the Board is accountable for the stewardship and oversight of the management of the Credit Union. Although the Directors may have special expertise and points of view, they do not represent a particular constituency.

Collectively, the Board has over 100 years of Director experience specific to Prospera Credit Union and its predecessors (Fraser Valley and Edelweiss Credit Unions). Individual Director tenure ranges from just under one year to 28 years.

Annual Report 2015



https://www.prospera.ca/AboutUs/CorporateInformation/CreditUnionRules/

Annual Report 2015

He has an extensive background as a community volunteer that includes past and current board governance with the Kinsmen Club of Mission, the Mission Regional Chamber of Commerce, Community Futures Development Corporation and the Rotary Club of Mission Midday. He also has a background in real estate and commercial lending.

Stacey is an avid supporter of the philosophy that local decision making and local development are the most effective means for communities to shape their future.

EDUCATIONAL PURSUITS IN 2015:• Canadian Conference for Credit Union Leaders• International Economic Development Council - Economic Development Marketing and Attraction • Webinar - Social Enterprise and Enterprising Non-Profits• Webinar - Innovation Metrics: Measuring Innovation for Tangible Performance

Stacey Crawford M.A. Board Chair Director Since 2012

Stacey holds a diploma in Business Management and a Master of Arts in Leadership and Training. Currently the Economic Development Officer for the District of Mission, Stacey is responsible for managing the economic, tourism and film development portfolios of the municipality.

“ Prospera cares and they know the community. They gave me my first car loan when I had very little credit history. I realized they were basing the decision on my character. They cared and believed in me when others didn’t and, as a result, I have been with Prospera for the past 25 years.



Annual Report 2015

Eric’s community involvement includes serving as the Chair of the Association of Professional Engineers and Geoscientists BC Mentoring Committee, helping to mentor engineers as they work towards their professional designation and he has recently become a volunteer with the Junior Achievement program. He is a graduate of the Vancouver Leadership Program which involved participation in a year-long community project for KindActs Network Association of BC and in 2010, he was nominated for the BC Hydro Business Mentor Award.

Eric is a strategic thinker with strong business acumen who enjoys building valued working relationships in a team environment and developing innovative solutions based on a set of core values. Over the course of the past year, Eric earned his ICD.D designation through the Institute of Corporate Directors Education Program.

EDUCATIONAL PURSUITS IN 2015:• Graduated the Institute of Corporate Directors Program

Eric NadinICD.D (Institute of Corporate Directors) Vice Chair Director Since 2011

Eric has over 30 years of business experience as a professional engineer, business manager and leader. After spending a number of years in construction for BC Hydro, he recently retired from the organization as the Operations Training Program & Strategy Manager.

“A financial organization of dedicated employees that has demonstrated on many occasions that it cares about the financial well-being of my entire family, from grandchildren to grandparents.



Annual Report 2015

Angela holds designations as a Chartered Professional Accountant as well as a Certified Financial Planner. She currently operates a public practice accounting firm that focuses on the financial, tax and accounting needs of individuals and small business corporations.

Angela believes strongly in loyalty to members, commitment to communities, strong governance, enterprise risk management and the value of the co-operative principles on which a credit union is built.

Other Board Appointments: Board Chair, Stabilization Central Credit Union Director, Central 1 Credit Union Director, British Columbia Co-operative Association Director, Agape Street Ministry Director, Sancta Maria House Association

EDUCATIONAL PURSUITS IN 2015:• Institute of Corporate Directors (ICD) - Board Culture & Dynamics· ICD - Corporate Governance & the Rise of Shareholder Activism· Management’s Discussion and Analysis - Guidance on Preparation and Disclosure· ICD - Board’s Role in Strategy· Central 1 Conference · Canadian Conference for Credit Union Leaders· FICOM Industry Conference· ICD Webinar - Leadership Ability at Work · CPA Webinars on Accounting Related Trends· Women in Leadership Forum · Embracing for Estate & Tax Planning· Trusts for Estate & Tax Planning· Borden Ladner Gervais - Cyber Risk Survival for Executives · Elements of Effective Risk Management - Central 1 Credit Union· ICD - Risk Oversight for Directors

Angela KaiserB. Comm, CPA, CGA, CFP, ICD.D (Institute of Corporate Directors)

Director Since 2001

Angela’s educational background and experience, skills and passion are just some of the attributes that enable her to provide valuable input to the Board.

Banking is usually about transactions. With three generations of my family now having purchased their first home with Prospera, banking is about relationships and making dreams come true. Prospera has helped build our financial future as individuals, businesses and investors at every stage of our lives.“



It’s not often that your financial advisor suggests you spend some of your hard earned savings, but that’s exactly what ours did for us. And when we decided to get the larger sailboat we’d been dreaming about, our advisor and her team worked hard to make it happen. Now that is truly putting people before profit, and we are very grateful.

Annual Report 2015

Karen has an impressive background in journalism and has served on many Boards in the community. Her community contributions include being elected to the Mission School Board of Trustees and Mission City Council. Currently, Karen is the Manager of Governance and Resource Development for Mission Community Services Society, one of the largest not for profit agencies in Mission.

Karen is a strong believer in the power of co-operatives and works diligently to promote that business model in the community.

EDUCATIONAL PURSUITS IN 2015:• Canadian Conference for Credit Union Leaders• Elements of Effective Risk Management - Central 1 Credit Union

Karen LaingICD.D (Institute of Corporate Directors)

Director Since 1991

Throughout her 25 year tenure as a Director, Karen has served on every Committee of the Board, including the role of Chair from 2007–2010. She is currently Chair of the Investment and Lending Committee.

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Annual Report 2015

Discover Wines VQA Wine Stores in 2003, where one store held the number one position in the province for sales of BC wines for thirteen years.

Tracy has been honoured with many local and national business awards and gives back to the community by mentoring women starting new businesses and guest lecturing at UBC Okanagan and Okanagan University College. She has served on a variety of boards and has been invited to participate in government and economic development round table discussions.

In 2014, Tracy was elected to Kelowna City Council and is also a Director of the Regional District of the Central Okanagan.

Tracy Gray Director Since 2010

Tracy’s strengths include operations, human resources, sales, marketing and government relations. Throughout her career, she has held various upper management and business consulting positions and founded

Prospera’s friendly staff always make my son feel welcome and important when making his deposits and being offered a little treat is a lovely personable touch.“



Annual Report 2015

As Corporate Secretary and Chief Governance Officer of Prospera for 23 years, Pauline has a comprehensive understanding of the Financial Institutions Act and regulatory requirements. During this time, Pauline developed strong leadership, communication and people skills.

Pauline volunteered on the Board for The Centre for Child Development (The Centre) and the Child Development Foundation of BC. She was ultimately hired as a consultant to assist the CEO in revising governance policies and the strategic planning process for the Board.

Prior to joining The Centre, Pauline spent six years on the Board of the United Way of the Fraser Valley, serving as President for two of those years. Pauline supports the Mental Health Society and is a member of Communitas Supportive Care Society.

EDUCATIONAL PURSUITS IN 2015:• ICD - Boardroom Financial Essentials• Webinar - HR Capital Oversight• Webinar - Canadian Deposit Insurance Corporation 101• Webinar - Hike the Hill• Canadian Conference for Credit Union Leaders• Elements of Effective Risk Management - Central 1 Credit Union

Pauline HavelockDirector Since 2013

Pauline is passionate about the co-operative principles and the credit union movement and the philosophy of “People helping People.” She has over 35 years of experience in the financial industry.

We were not aware of the Disability Registered Savings Plan (DRSP), a government assisted program that enables people with disabilities to access a pension at retirement. Not only did our Prospera advisor recommend that we set one up, their entire team went the extra mile to help make it happen.“



Annual Report 2015

Sylvia’s extensive community experience on numerous boards and committees has provided a solid foundation of skills for the credit union role. These skills include budgeting and financial management, leadership and communication skills, sound decision making abilities and the capacity to contribute effectively as part of a team.

Sylvia served for 15 years on the District of Kent Municipal Council including six years as Mayor and recently served seven years as a Vice Chair Commissioner with the Agricultural Land Commission. In November 2014, she made the personal decision to re-involve herself and was successfully re-elected as a Councillor.

Past volunteer activities include serving on the fundraising committee for the new Emergency Room at the Chilliwack General Hospital, the Healthy Communities Committee for Kent/Harrison, founding member of the Kent Harrison Foundation, past President of the Harrison/Agassiz Rotary Club, Vice Chair of the RVRD Hospital Board and Director of the Fraser Basin Council.

Sylvia PrangerDirector Since 1996

Serving the membership in an active and accountable manner is Sylvia’s goal. This involvement has strengthened her resolve to ensure Prospera continues to be strong, vibrant and relevant to our staff and members.

“ I am proud to belong to a co-operative which continues to live out its values and commitment to community.



Annual Report 2015

the wholesale banker and trade association for credit unions in British Columbia and Ontario. He retired from Central 1 in 2011 as Chief Operating Officer and Chief Financial Officer, a position that he held for over 12 years.

Rowland has served on a number of credit union affiliated boards, the most recent being The Co-operators Insurance Group (2008-2012), where he served as Chair of the Audit Committee. He was also a member of the Conduct Review and the Democratic Structure Review Committees.

Early in his career, Rowland worked at Vancity and he understands the challenges of retail banking. He also has a solid understanding of the financial and regulatory challenges faced by credit unions today. He has managed many complex projects, including overseeing the merger of Ontario Central Credit Union with BC Central (now Central 1 Credit Union).

EDUCATIONAL PURSUITS IN 2015:• Completed Level A ‘Foundations of Governance’ of the Credit Union Director Achievement Program

Rowland KellyBA Econ/Comm, CPA, CGA

Director Since 2015

Rowland’s background is in finance and investment management and he has spent the majority of his career working within the credit union/co-operative sector. Most of his career was spent at Central 1 Credit Union,

“ I’ve been a Prospera member since 1988 and what really stands out for me is that whenever I’ve needed anything above and beyond, they’ve always come through.



Annual Report 2015

before merging the firm with Vohora & Co, CA in 2012. His profession has stood him in good stead in exercising his role as Director for Prospera Credit Union for the past 25 years.

Karl has served on all committees of the Board and acted as past Chair of the Investment & Lending Committee. He is currently Chair of the Audit Committee. From 1998 to 2007, Karl was privileged to serve as Board Chair during which time Fraser Valley Credit Union merged with Edelweiss Credit Union to form Prospera Credit Union.

In 2002, Karl attended the London School of Business (UK) and obtained his Certified Credit Union Director (CDD) designation.

Karl is a strong, community-oriented person and a long-time resident of Abbotsford and Chilliwack. He has been very involved in volunteer capacities and has served for many years on the Board of Trustees of Emmanuel Free Reformed Church in Abbotsford as both Board Chair and Treasurer.

Karl NoordamCPA, CGA, CDD (Certified Credit Union Director)

Director Since 1988

As a Certified General Accountant, Karl operated his own accounting practice (Noordam & Co, CGA) for 30 years in Surrey

“As a 30 year member of Prospera (and previously Fraser Valley Credit Union) I will vouch for the fact that they have always had my back when it comes to my financial security.



Annual Report 2015

DIRECTOR COMPENSATION Prospera offers a level of remuneration that both reflects its co-operative heritage and satisfies the market reality in order to attract and retain Directors with the business experience and skills required to achieve the Credit Union’s strategic plan.

The Director Remuneration Policy is reviewed every three years by the Conduct Review and Governance Committee which may, from time to time, retain the services of an independent remuneration consultant.

Annual Compensation levels are as follows: Board Chair $27,000Vice Chair $16,500Committee Chairs $16,500 (Audit Chair receives an additional $1,000)All other Directors $13,500

In addition to the honorarium noted above, Directors receive a $500 per diem for attendance at Board meetings and a $300 per diem for Committee meeting attendance.

DIRECTOR EXPENSESDirectors are reimbursed for mileage, travel and business expenses incurred on Credit Union business. Directors are expected to provide receipts for all expenses and reimbursement is based on reasonable and accountable out of pocket expenses.

EDUCATIONIn accordance with the Credit Union Incorporation Act, all Directors are required to complete Level A of the Credit Union Director Achievement (CUDA) Program ‘Foundations of Governance.’

Additionally, Directors are required to engage in learning activities that will expand their knowledge and enhance their role as a Credit Union Director.

Ongoing professional development is supported by providing periodic special presentations in-house with subject matter experts at Board and Committee meetings. Presentations over the past year included: • Brand Development - Lux Insights • Cyber Security Awareness Training • Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) - Annual review and assessment

To further encourage active participation with individual continuous learning, Prospera provides funding up to $15,000 per Director for each three-year term. This allowance covers registration, travel, accommodation and meal costs for attendance at conferences and seminars, (costs associated with required and optional CUDA modules and participation in the ICD program are excluded from the $15,000 allowance).



Annual Report 2015

SUMMARY OF COMPENSATION AND EXPENSES FOR 2015‘Gross Remuneration’ includes annual honorariums as well as meeting and education session per diems. ‘Expenses & Education’ figures include mileage, conference and education session registration fees with related expenses (i.e. travel, accommodation and meals), data plan costs for a Prospera issued iPad for Board use as well as a nominal telecom allowance.

Director 2015 Gross Expenses & Total Remuneration Education

Stacey Crawford - Board Chair (8 months) $ 42,448 $ 7,150 $ 49,598Eric Nadin - Vice Chair (8 months) 32,492 16,102•• 48,594Angela Kaiser - Board Chair (4 months) 38,487 7,661 46,148Karen Laing - Vice Chair (4 months) 32,296 4,728 37,024Tracy Gray 23,269 7,356 30,625Pauline Havelock 28,073 3,489 31,562Karl Noordam 25,273 1,859 27,132Sylvia Pranger 26,535 2,768 29,303Rowland Kelly (Elected April 2015) 16,967 2,634 19,601Amyn Somani (Served until April 2015) 10,914 2,681 13,595

Total $ 276,754 $ 56,428 $ 333,182

••This amount includes $11,167, which is the 2015 portion of the registration fee for the ICD program.



Annual Report 2015

BOARD AND COMMITTEE MEETING ATTENDANCE There were eight regularly scheduled Board meetings in 2015, for which there was 100% attendance. Due primarily to the CEO search process, the Board held several additional meetings (in person and via conference call) for which there was 96% attendance. Much of the Board’s groundwork takes place at the Committee level. Each spring following the Annual General Meeting, Committees are realigned and Directors are strategically rotated through different Committees to provide experience while preserving continuity and developing leadership. Director attendance at the 2015 Board and Committees meetings was as follows:

Director Board Meeting Committee Committee Attendance Assignments Attendance

Stacey Crawford 15/15 1/1Board Chair (May – December) 2/2 2/2 3/3 3/3 7/7

Eric Nadin 15/15 4/4Board Vice Chair (May – December) 1/1 7/7 1/1 3/3

Tracy Gray 14/15 1/1 4/4 3/3

Pauline Havelock 15/15 1/1 2/2 3/3 3/3

Angela Kaiser 15/15 4/4Board Chair (January – April) 3/3 2/2 7/7 1/1 2/2

Rowland Kelly (April – December) 9/9 3/3 3/3

Karen Laing 15/15 4/4Board Vice Chair (January – April) 2/2 7/7 4/4 2/2

Karl Noordam 13/15 3/3 1/1 1/1

Sylvia Pranger 15/15 1/1 1/1 2/2 1/1 3/3

Amyn Somani (January – April) 6/6 1/1

Audit (January – May)

Member Community Relations, Chair (January – May)

Strategic Sub-Committee (January – May)

Human Resources (June – December)

Conduct Review & Governance (June – December)

CEO Search (May – September)

Human Resources, Chair (January – May)

Audit (January – May)

CEO Search, Chair (May – September)

Nominations & Elections, Chair ( June – December)

Member Community Relations (June – December)

Nominations & Elections (January – May)

Investment & Lending (January – December)

Member Community Relations (June – December)

Nominations & Elections (January – May)

Member Community Relations (January – May)

Member Community Relations, Chair (June – December)

Conduct Review & Governance (June – December)

Human Resources (January – May)

Human Resources, Chair (June – December)

Strategic Sub-Committee, Chair (January – May)


Conduct Review & Governance (January – May)

Audit Committee (June – December)

Human Resources (June – December)

Investments & Lending (June – December)

Human Resources (January – May)

Strategic Sub-Committee (January – May)


Investment & Lending, Chair (January – December)

Audit (June – December)

Audit, Chair (January – December)

Investment & Lending (January – May)

Nominations & Elections (June – December)

Nominations & Elections, Chair (January – May)

Nominations & Elections (June – December)

Member Community Relations (January – May)

Conduct Review & Governance (January – May)

Conduct Review & Governance, Chair (June – December)

Conduct Review & Governance, Chair (January – May)



Annual Report 2015

CEO COMPENSATION DISCLOSUREOur Compensation PhilosophyProspera’s Compensation Philosophy applies equally to all employees. We are committed to provide and openly communicate total compensation programs that are competitive, flexible and aligned with our business goals. We balance our cash compensation with the ability to pay for our desired compensation position, taking into account other total compensation programs that may be higher than our target market strategy.

Our rewards system has several principles in mind, most notably:• To align employees with Prospera’s mission, vision, values and goals by incenting and rewarding

employees for their contribution and impact on the organization’s achievements.• To align organizational, team and individual success to continually add value for our members.• To reinforce the behaviours and values that contribute to the achievement of our goals.• To ensure reward practices are consistent and applied fairly across employee groups.• To protect the health and welfare of our employees.

Our goal is to target the 50th percentile (also known as P50 or the Median; it is the value in which one-half of the observations included in the sample are above and one-half are below) for all of our programs. We review the external marketplace on a continuing basis through the use of published and custom surveys. We look for data which matches the appropriate organization size, and geographic and industry area in which we recruit.

Compensation ProgramsProspera reviews compensation programs for all employees with the Human Resources Committee of the Board on an annual basis. The Board of Directors is responsible for CEO compensation and for determining any specific elements for the CEO.

Prospera has defined salary structures and we have published salary ranges up to senior management levels. We have a flexible benefits program and a defined benefit pension plan that is offered to eligible part time employees and all full time employees. We have a Short Term Incentive plan that applies to all non-wealth management employees in the same way and has targeted eligibility levels that are scaled up based on position complexity, responsibility and market practices.

CEO Compensation Summary The CEO’s full compensation package is reviewed by the Board of Directors annually, based on a Central 1 executive compensation survey and the HayGroup’s industry survey for executive compensation in credit unions. Prospera targets the 50th percentile for base salary and total target cash in the comparator market.

For the fiscal year ending December 31, 2015, there were three incumbents who filled the position over the year: Former CEO from January 1 to April 30, Interim CEO from May 1 to September 9, and New CEO from September 10 to December 31, 2015. In aggregate the three CEOs earned the following compensation:

Description Amount

Base Salary $ 320,870

Variable Pay $ 172,570(*paid in 2016 for 2015 fiscal year performance)

Pension, benefits and perquisites Please see descriptions below



Annual Report 2015

CEO Short-Term IncentiveThe CEO’s Short Term Incentive (STI) is aligned with Prospera’s Variable Pay Plan that applies to most employees in the organization, with a target commensurate to the employee’s level of responsibility and influence. The STI is based on the achievement of both organizational goals and individual performance objectives and leadership competencies. The target for the CEO has been established at 40% of base salary. Fiscal year 2015 was a transitional year with a retiring CEO, an interim CEO and a new CEO hired late in Q3. Variable Pay for 2015 was handled on an exception basis for each incumbent, with individualized criteria for eligibility and payment. In fiscal year 2015, the CEOs received $172,570. While the STI was earned for performance in fiscal year 2015, actual payment is made in fiscal year 2016.

Benefits, Pension and PerquisitesThe group benefits provided to the CEO are consistent with those received by all other employee groups within Prospera. As part of the standard coverage, the CEO participates in the flexible benefit plan that provides plan credits to the participant in order to select a custom benefits package that is aligned with their life situation (e.g. single/married, dependent/spousal coverage) and which offers plan credits based on a defined formula.

The CEO is eligible for retirement benefits through the BC Credit Union Employees Pension Plan – 1.75% Division, as well as the Prospera Credit Union Supplemental Pension Plan (SERP). The SERP is a supplemental pension that mirrors the base plan and is in place for certain executive employees whose benefits are restricted by reason of limits on retirement benefits prescribed under the Income Tax Act.

Annually, both the employee and the employer are required to contribute to the 1.75% Pension Plan in an amount set by the Trustees of the Plan, in consideration of the recommendations from a qualified actuary regarding the total required level of contributions to ensure that the plan will be able to meet future obligations. Plan members are not required to contribute to the SERP.

The pension formula used for both plans to determine the annual pension is 1.75% of average earnings multiplied by years of service. The SERP for the Former CEO includes STI earnings in the calculations.

Pension Indexing – Pension earned prior to 2010 will be indexed automatically at 50% of the Consumer Price Index (CPI). Pension earned subsequent to 2009 will be indexed on an ad-hoc basis subject to consent by the Trustees of the Plan.

Additional benefits and perquisites are also provided to the CEO. These include a flexible perquisite account which can be used for a car allowance. The combined value of both is equivalent to 10% of base salary.

SeverenceThe New CEO has a severance agreement of up to 18 months base salary.



Annual Report 2015

PROSPERA SENIOR LEADERSHIP TEAM Senior Leadership Team bios are available on prospera.ca

Shawn L. GoodPresident & Chief Executive Officer

Michael Kerdachi Chief Financial Officer

Greg DyckChief Information Officer

Heather JohnsonSenior Vice President, People and Culture

Sundeep SandhuSenior Vice President, Marketing and Communications



https://www.prospera.ca/AboutUs/CorporateInformation/Executive/

corporate governance - prospera · 2016-04-04 · corporate governance annual report 2015 mr....

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