Bombardier chair defends CEO’s $17M exit package

Shareholders told board respects firm’s contractual obligation to former head

MONTREAL—The chair of Bombardier Inc. is defending the multimillion-dollar compensation plan handed to former CEO Alain Bellemare.

Pierre Beaudoin, grandson of the Quebec giant’s founder, told shareholders at the company’s annual meeting Thursday that the board “respected the company’s contractual obligations” to the former chief executive.

“They were not atypical in regard to what other corporations are paying senior management,” he said.

The package Bellemare received when he stepped down in April could reach $17.5 million, including a minimum $10 million in severance and nearly $2.7 million in share awards. He will rake in an additional $4.9 million if the sale of Bombardier’s rail unit to France’s Alstom SA goes through following regulatory scrutiny.

Bellemare’s five-year tenure saw the plane-and-train maker struggle to manage a debt that now stands at more than $9 billion as the company sold off division after division, leaving it a pure-play producer of private jets — a high-end luxury product in the middle of a recession.

Quebec pension fund manager Caisse de dépôt et placement du Québec has criticized the compensation arrangement, calling it “excessive.”

At the virtual meeting Thursday, new CEO Eric Martel told investors that developments under his predecessor’s watch were “unacceptable.”

“Repeated program delays and technical challenges have tarnished our reputation for operational excellence,” Martel said. “We understand your disappointment, but I am convinced that we will rebuild this Quebec flagship.”

The board of directors also put forward a proposal on a nonbinding approach to executive compensation. The resolution was adopted following a vote, though the precise tally was not released immediately.

The Beaudoin-Bombardier family controls 50.9 per cent of voting rights while holding a small fraction of the nearly 2.4 billion outstanding shares.