Bombardier family mulls succession plan for board
COMPENSATION CHANGES PASS AS THIRD GENERATION SET FOR ‘MORE ACTIVE ROLE’
• Bombardier Inc.’ s controlling family has discussed governance and board succession in the wake of an executive pay uproar, with some family members wanting new blood for its representatives on the board, says the grandson of the company founder.
The plane and train maker set off protests, most recently near Bombardier’s Montreal headquarters on Sunday, after the board raised 2016 salaries of five executives and its chairman by up to 50 per cent just weeks after it received a federal loan.
Bombardier said Monday that its board of directors approved changes to the compensation offered to several of its top executives.
CEO Alain Bellemare had asked the board to delay payment of more than half of last year’s total planned compensation for six executive officers, including himself, by one year to 2020, provided the company meets certain objectives.
Executive chairman Pierre Beaudoin also asked the board to cut his 2016 compensation by US$ 1.4 million to equal the US$ 3.85 million he received in 2015.
In a regulatory filing ahead of the company’s May 11 annual meeting, the Montreal- based company said the proposals were accepted and approved by the board.
Meanwhile, Charles Bombardier, grandson of founder Joseph- Armand Bombardier who died in 1964, told Reuters the executive pay decision has moved to the forefront talk of who should represent the family on the board.
His father, J. R. Andre Bombardier, sits on the current board of directors.
Charles Bombardier spoke to Reuters by telephone from Montreal on Friday.
The family, which controls Bombardier through a dual voting structure, now has five of the 15 board seats, including one for Beaudoin, who is also a grandson of the founder.
“I think the third generation will play a more active role on the board since they are in their prime working years,” Charles Bombardier said in his first media interview following the pay uproar.
Charles Bombardier, 43, an industrial designer and an investor in startup companies left a company spinoff, Bombardier Recreational Products, in 2006 and does not currently hold any executive position in Bombardier or have a board seat. But his comments offer a rare insight into the thinking of the Bombardier-Beaudoin family, whose members maintain a low profile.
Bombardier, which considered bankruptcy protection in 2015, has been in the midst of a five- year turnaround. The company scored a major boost for its flagship CSeries jet in 2016 with the signing of key sales contracts and the plane’s smooth entry into service after years of development running over budget and behind schedule.
“The family took great risk by i nvesting in this ( CSeries) aircraft program and now it’s a technical success,” Charles Bombardier said. “This was a family decision and in the years to come, you will see it was an excellent one.”
He reiterated the family would never modify the dual- class share structure that gives them voting control, partly because it protects Bombardier from becoming a takeover target.
“The key is keeping control of the company and passing it on to the next generation while making sure that shareholder value is generated along the way,” he said.
A Bombardier spokesman declined to comment.
In the past, the family’s vision for the company has conflicted at times with external chief executives. One CEO left after two years at the helm.
Current CEO Alain Bellemare, who took the reins of Bombardier in 2015 and replaced Pierre Beaudoin, has the support of family members, Charles Bombardier said.
Charles Bombardier said Beaudoin deserved a higher salary in 2015 because he was assisting Bellemare in the transition to become CEO.
“The role of the chairman needs to be separated from the CEO and one year to make the transition is enough in my opinion,” he said, adding the executive chairman’s role should now focus on leading the board and Beaudoin’s salary should be benchmarked to industry norms.
In an email statement sent on Sunday, Beaudoin said he is “happy to have the continuing support of my entire family,” and reiterated family support for company management.