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Maverick candidate for MEC's board of directors wants storied co-op to increase transparency and disclose CEO pay

Sea to Sky members of Mountain Equipment Co-op can vote for board members until noon on Thursday, May 24.

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For many, Mountain Equipment Co-op (MEC) is seen as a grassroots and principled alternative to corporate big-box sports stores, with a $5 lifetime membership allowing you to shop at one of the co-ops 22 brick and mortar stores or online.

"Everyone who shops here is a member and an owner, and our business structure is designed around values, not profit," reads the co-op website.

But one North Vancouver man is giving voice to a contingent of frustrated and active MEC members that claim the retail organization has become increasingly corporate and undemocratic.

For those reasons, Steve Jones, a software executive, wants a seat on the MEC board of directors.

"My key reasons for running is that (MEC), as a member-owned organization, is not providing enough transparency to members," he explained.

Each year, members elect three director candidates to sit on the nine-member rotating board. Directors are elected annually for three-year terms, with the option of running for a second term.

This isn't the first time Jones tried to secure a place on the board. In 2015 and 2016, he was deemed ineligible to run because he didn't meet "minimum qualifying criteria," which at the time required candidates to have experience serving on a board, or on senior management "in an organization of comparable complexity to MEC, in terms of size, scale, and reach."

In the lead-up to the 2017 election, MEC revised its qualifying criteria, allowing more members, including Jones, to run. Jones did not win a position on the board, though he did get over 9,000 votes.

This year, 11 people are running for the three available positions. MEC members can vote online, with polls closing at noon on Thursday, May 24.

Of the 11 candidates, five have been selected as "recommended" candidates by the board of directors-something that Jones feels is undemocratic.

In a written statement to Pique, MEC's chief governance officer, Shona McGlashan, defended the organization's decision to recommend candidates, saying that it allows the board to indicate to "voting members which of the candidates it believes best exhibit the skills and experience, diverse backgrounds and perspectives, and alignment with MEC's values that are required to create a balanced board."

McGlashan also said the selection process "includes several checks and balances to ensure it's free of biases" and that recommending candidates is common procedure amongst large and complex co-ops and credit unions, including Vancity and Coast Capital.

But according to Jones, the issues run deeper than just the nomination process.

Unlike other co-ops or many publicly traded companies, MEC does not disclose CEO salary.

The co-op, rather, releases a "ratio of CEO pay to average employee compensation."

According to MEC, this figure is based on the average of regular wages, overtime, vacation pay and bonuses for all MEC employees-both hourly and salaried staff.

In 2017, the ratio was 15.8 to 1, wrote McGlashan. The 100 highest-paid CEOs in Canada were paid 209 times more than the average income.

For Jones, though, that kind of accounting just doesn't work. He wants the dollar figure to be disclosed.

"We are paying the CEO. He's working for us," explained Jones.

"We really should know how much we're paying him.

"To be honest, it may be a reasonable salary ... but as a shareholder, I'd like to know what it is. And more importantly, when it increases year over year, I'd like to know what criteria is used to determine that it should be increasing."

Jones also has concerns about the how the board of director's compensation is determined. Recommended compensation rates are put forward during MEC's annual general meetings (AGMs).

Held in Vancouver at MEC's headquarters, Jones said the meetings do not capture an accurate cross-section of the co-op's diverse membership, as a large number of the attendees are MEC employees from corporate headquarters who double as members.

According to Jones, that creates an inherent conflict of interest, as voting is done in an open format with voting cards and the board of directors is in attendance.

"You're not going to vote against your own board if you're an employee," he said, adding that he would like to see online voting instituted.

According to McGlashan, online viewing of the AGMs has historically been too low to justify the expense of setting up a secure online voting portal-just 13 people in 2017 and 20 people in 2016.

McGlashan added that to ensure members from outside Vancouver are not disenfranchised, significant resolutions are voted on during the board of directors' election. "This means that, regardless of where they live, members can vote online, by phone or by mail-in ballot on those matters," she said.

Another concern for Jones is that MEC-which boasted $465 million in sales for 2016-17 across its online and brick and mortar stores-has expanded away from its core mandate of serving the needs of backcountry enthusiasts.

Started in the 1970s by a group of Vancouver-area mountain climbers frustrated with the selection of outdoor gear at local retailers, MEC started off by catering to hardcore backcountry enthusiasts and quickly grew, establishing a "working board" that often pitched in at the stores and were involved in product design.

The co-op now offers a wide range of products, from touring boots, to standup paddleboards and stylish casual clothing.

"Sales don't necessarily correspond with the success of the organization," said Jones. "We could start selling automobiles, for example, and sales would go up, but that wouldn't ... (mean) the co-op is serving its purpose."

In her statement to Pique, McGlashan defended the organization's growth, framing it as a way to make outdoor activities more accessible to the masses.

"By broadening its product assortment, MEC is today better able to support more people to be active outdoors," she said.

"MEC is regarded as having the most comprehensive technical product assortment in Canada."

According to Jones, many members have reached out to him with frustrations about the direction of MEC-and he is only asking for reasonable requests.

"We're not some group of activists who are trying to take over the co-op or who hate all of these modern activities or expansion into new areas," he said. "We just think there should be a little bit more transparency and accountability."

To learn more about the other candidates and vote for the MEC's board of directors, visit elections.mec.ca/vote/.

Voting closes on Thursday, May 24 at noon and is open to anyone who joined the co-op before March 1 2018 and is 16 years of age or older.

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