Bombardier defends ex-CEO’s $17.5M severance
MONTREAL — The chairman of Bombardier Inc. has defended 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-andtrain 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 depot et placement 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 non-binding 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.
Several institutional investors including the Caisse recommended against voting for the compensation plan.
The Caisse, Bombardier’s second-biggest investor at 2.24 per cent, highlighted issues with severance pay and the non-recurring bonuses that will be granted to other executives if the Alstom sale is completed
“These elements of compensation are considered excessive,” it said.
Other institutional investors who opposed the proposal included the Quebec Labour Federation Solidarity Fund — the investment arm of the province’s largest labour group — the Canada Pension Plan Investment Board, California Public Service Pension Plan, California State Teachers’ Retirement System and Florida’s State Board of Administration.
Several of the institutional investors also opted not to support re-election of board members August Henningsen, Vikram Pandit and Douglas Oberhelman, as they sit on the board of human resources and compensation.