CPPIB, AL­BERTA FUND ADD TO HEAT ON BOM­BARDIER.

National Post (Latest Edition) - - FRONT PAGE - Scott Deveau and Fred­eric Tomesco

Canada Pen­sion Plan In­vest­ment Board and Al­berta In­vest­ment Man­age­ment Corp. have be­come the lat­est to come out against the re­elec­tion of Bom­bardier Inc.’ s ex­ec­u­tive chair­man Pierre Beau­doin and the com­pany’s ex­ec­u­tive com­pen­sa­tion pack­age.

CPPIB, The coun­try’s largest pen­sion fund man­ager said on its web­site Wed­nes­day it would with­hold its vote for Beau­doin and two other di­rec­tors as well as the pay pack­age. Share­hold­ers are to vote on the plan at the an­nual meet­ing on Thurs­day.

AIMCo said it will with­hold its vote f r om f i ve non- in­de­pen­dent di­rec­tors ex­clud­ing CEO Alain Belle­mare and mem­bers of the com­pen­sa­tion com­mit­tee.

It will also vote against the so- called com­pen­sa­tion res­o­lu­tion “due to a sig­nif­i­cant dis­con­nect be­tween pay and per­for­mance,” said spokesman Denes Nemeth.

“Our as­sess­ment of re­cent events con­firms the need for in­de­pen­dent board lead­er­ship,” On­tario Teach­ers said in a state­ment Tues­day. “We typ­i­cally do not sup­port boards in­stalling an in­di­vid­ual in the role of ex­ec­u­tive chair.”

Teach­ers said it was vot­ing against the ex­ec­u­tive com­pen­sa­tion pack­age be­cause the com­pany failed to ad­e­quately ex­plain the link­age be­tween its tar­gets and pay. “The re­sult­ing link­age be­tween pay and per­for­mance is not suf­fi­ciently jus­ti­fied,” Teach­ers said.

BCIMC not only with­held its vote for Beau­doin but eight other di­rec­tors as well, in­clud­ing Pierre’s fa­ther Lau­rent Beau­doin, for var­i­ous rea­sons in­clud­ing a lack of in­de­pen­dence, at­ten­dance at meet­ings or other is­sues, it said on its web­site.

It also voted against the ex­ec­u­tive pay pack­age, say­ing it be­lieved there was lit­tle cor­re­la­tion be­tween pay and per­for­mance. BCIMC owned roughly seven mil­lion shares in the com­pany as of March 31, 2016, the most re­cent hold­ings it has re­ported.

The funds join the Caisse de dépôt et place­ment du Québec and Sol­i­dar­ity Fund QFL, which also with­drew sup­port for Beau­doin and the com­pen­sa­tion plan.

“The big pen­sion funds are all pil­ing on,” said Karl Moore, an as­so­ciate pro­fes­sor at McGill Univer­sity’s busi­ness school. “That’s put- ting enor­mous pres­sure on the board. It speaks loudly of their de­sire for change.”

“Gov­er­nance and t he fam­ily is what this is about,” said David Ty­er­man, an an­a­lyst at Cor­mark Se­cu­ri­ties. “A lot of pub­lic money is in­volved, a lot of it has been raised un­der chal­leng­ing cir­cum­stances. In­vestors aren’t very happy about the du­al­class struc­ture.”

The pay pro­posal fu­elled out­rage af­ter Bom­bardier in­creased ex­ec­u­tive pay al­most 50 per cent de­spite re­ceiv­ing tax­payer aid and announcing plans to cut more than 14,000 jobs. The Mon­tre­al­based maker of planes and trains later re­duced Beau­doin’s pay and de­layed some re­mu­ner­a­tion for lead­ers, in­clud­ing CEO Alain Belle­mare.

While ex­press­ing “full sup­port and con­fi­dence” in Belle­mare and his team as they at­tempt to turn the com­pany around, the Caisse in a let­ter to Bom­bardier on Mon­day said bet­ter gov­er­nance is re­quired to make the plan suc­cess­ful.

The Bom­bardier and Beau­doin fam­i­lies con­trol the com­pany by virtue of own­ing a ma­jor­ity of the Class A mul­ti­ple- vot­ing shares. Each Class A share car­ries 10 votes, com­pared with one each for the Class B stock. That’s likely to give the fam­i­lies the last word even if out­side share­hold­ers re­ject the com­pen­sa­tion plan and with­hold sup­port from Beau­doin.

The vote will be held as Belle­mare pushes a turna r o und pl a n af­ter t he CSeries j et­liner pro­gram cham­pi­oned by Beau­doin en­tered ser­vice more than two years late and $2-bil­lion over bud­get.

Beau­doin, in a nine- year ten­ure as ei­ther CEO or chair­man, earned about $53 mil­lion, ac­cord­ing to data com­piled by Bloomberg. Bom­bardier’s widely traded Class B shares tum­bled 75 per cent in the pe­riod.

ERNEST DOROSZUK / POST­MEDIA NEWS FILES

Ma­jor pen­sion funds are op­pos­ing the re- elec­tion of Pierre Beau­doin as ex­ec­u­tive chair at Bom­bardier Inc.

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