Public sector CEOs’ salaries, perks to take cut
Top level roles at 23 agencies affected as province aims to save $16 million
Chief executives at Alberta’s agencies, boards and commissions will soon have to start paying for their own golf club memberships.
The government hopes to save $16 million by cutting salaries, abolishing bonuses and removing perks for top executives at 23 agencies, including the Workers’ Compensation Board, the Alberta Utilities Commission and the gaming and liquor commission.
Severance pay will be capped at 12 months and other benefits, such as pension plans and health benefits, will be brought in line with the existing model in the Alberta government.
“What we found is that, up until now, determining compensation has been a bit of a free-for-all,” Finance Minister Joe Ceci told a news conference Friday at the Alberta legislature.
The bloated salaries were flagged twice by the auditor general since 2008 and Ceci pilloried the previous government for not addressing the issue.
“We’re changing things. We’re making it so you have to have competencies to get into (these) positions. It’s not who you know anymore, it’s what you know,” said Ceci.
The government used a thirdparty company to review a database of more than 200 public sector salaries across Canada and create a framework for the province. The base salaries of 10 CEOs will see a reduction due to the new pay structure.
For example, Guy Kerr, CEO of the Workers’ Compensation Board, took home a base salary of $475,000 in 2015, but disclosed $896,206 in total compensation thanks to bonus pay and benefits. The new base salary for the WCB boss will be $396,720.
The perks, which included health and golf club memberships, amounted to about $30,000 for all the CEOs and will be completely banned.
The regulation banning bonus pay — which affects all forms of bonuses, such as variable pay, pay-at-risk and market modifiers — extends to 270 executives and management employees at the agencies.
A two-year notice period is required for CEOs under contract so, although the changes take effect March 16, many won’t take a hit to their bank account until much later. Nine CEOs have contracts expiring before the two-year period ends and will be subject to the new salary rules during a renegotiation.
Five agencies won’t fall under the new framework and will be required to provide compensation plans instead:
AIMCo, ATB Financial and the Teachers’ Pension Trust — the three financial organizations — have to compete with private sector counterparts.
Alberta Health Services doesn’t have an equivalent agency anywhere in Canada, so no compensation comparison could be made.
The Alberta Electric System Operator will have total compensation frozen and will be required to submit a pay plan because it will be a major part of the province’s switch to a capacity energy market. The government is trying to maintain “executive continuity” during the transition.
Ceci said after the switch to a capacity market is completed, “we’ll consider bringing AESO under this regulation.”
Similar regulations have been adopted in British Columbia, Ontario, Quebec, Nova Scotia and by the federal government.