Bombardier must respond to public outcry over executive pay increases: Anglade
MONTREAL — Bombardier needs to respond to the shock it created among citizens and elected officials regarding the dramatic increases in executive pay at the company, senior Quebec Liberal ministers said Friday.
The aerospace giant needs to review its compensation policy in light of the fact the company is receiving hundreds of millions of dollars in taxpayer subsidies yet awarded a nearly 50 per cent pay increase to six top executives in 2016, said Economy Minister Dominique Anglade.
“I am inviting the company to act in a way that reflects the actual situation and the understanding of the issue that was created,” she said.
Total compensation for the Montreal-based manufacturer’s top five executives and board chairman Pierre Beaudoin was US$32.6 million in 2016, up from US$21.9 million the year before.
The Quebec government gave Bombardier (TSX:BBD.B) roughly US$1 billion in 2016 while the federal government recently announced a $372.5-million loan package for the firm’s CSeries and Global 7000 aircraft programs.
Anglade said she is not questioning the merit of her government’s aid package, saying it was necessary to create jobs and help the plane maker with its CSeries program.
She said, however, “the decision that (Bombardier) took shocked the population — and with reason.”
Finance Minister Carlos Leitao also weighed in following a speech in Montreal on Friday, adding that he also “invites the board of directors to review its executive compensation policy.”
Bombardier did not immediately respond to a request seeking comment.
In its regulatory filing, Bombardier attributed the higher compensation to a number of factors, including achieving profit and cash flow targets, securing CSeries orders and completing the first flight of the Global 7000 business jet.
However, Claude Beland, former head of the Desjardins Group as well as a shareholder rights association, told The Canadian Press in an interview that Bombardier’s executive compensation is “excessive” and “indecent.”
He called on Bombardier shareholders to show up to the company’s annual meeting on May 11 and oppose the executive pay decision in person.