Potashcorp, Agrium execs got big pre-merger raises

The former chief executives of Potash Corp. of Saskatchewan Inc. and Agrium Inc. both received significant raises during the year leading up to their companies’ merger, which formed Nutrien Ltd. on Jan. 1.

Jochen Tilk, who ran PotashCorp and now serves as the combined company’s executive chairman, earned US$7.1 million last year, substantially more than the US$3.9 million he was compensated in 2016, corporate filings show.

Nutrien CEO Chuck Magro, who helmed Agrium before the merger, got US$9.7 million last year, up from the US$8.7 million he earned the year before, according to the filings.

In both cases, total compensation includes a base salary — US$1.2 million for Magro, US$924,534 for Tilk — plus option- and sharebased awards, as well as annual incentives based on performance.

In a letter to shareholders, the chair of Nutrien’s human resources and compensation committee said both companies realized a combined senior leadership team would influence the merger’s success.

“We recognized that we needed to successfully retain critical talent in order to achieve deal synergies, and that the loss of key talent could be detrimental,” Keith Martell said in the publicly-available letter.

“We believe we have taken a balanced approach to manage the human resource risk that is naturally inherent in a significant transaction … between two long-standing and successful Canadian companies,” he added.

Major corporations use elaborate formulae to determine executive compensation; executive pay is based on a wide range of factors, including comparable salaries at other firms and short- and longterm incentives.

While both Magro and Tilk will take home the same base salary next year, the former Agrium head’s target compensation climbed 12 per cent while the former Potashcorp executive can expect a four per cent raise.

In both cases, the corporate filings state, increases reflect the executives’ new roles in a larger organization.

Nutrien spokesman Will Tigley, in an emailed statement, noted neither executive’s base salary will increase next year, and said the company’s board recently approved a new group of companies against which to compare salaries.

“Adjustments to Chuck and Jochen’s incentive compensation were made to align with the midpoint of our Nutrien peer group and ensure they remained competitive,” Tigley said.

Nutrien’s other top executives also received raises last year.

Former Potashcorp Chief Financial Officer Wayne Brownlee’s compensation climbed to US$2.7 million from US$1.7 million, while Agrium’s former CFO, Steve Douglas, earned US$3.4 million, up from US$2.6 million in 2016.

Michael Frank, who joined Agrium just before the merger and now serves as Nutrien’s president of retail, was paid a US$225,000 salary in 2017, but with options and incentives, was compensated US$10.5 million.

Last month, Nutrien reported losing US$1 million on sales totalling US$3.7 billion in its first quarter of existence.

Canada’s highest-earning chief executives took home an average of $9.5 million in 2015, almost 200 times the average industrial wage, according to a year-old report by the Canadian Centre for Policy Alternatives.

We needed to successfully retain critical talent in order to achieve deal synergies.