CORCORAN: THE CASE FOR PAYING BOMBARDIER EXECS.

ONE CAN MOCK BOMBARDIER FOR ITS STATE AID, BUT NOT FOR GETTING COMPENSATION RIGHT.

The politicization of compensation, whether for executives or doctors or bureaucrats, has clearly not peaked. How much money people are paid relative to some benchmark set by public perception has become more important than what people do and why they are paid to do it.

The sensational developments around Bombardier Inc.’s executive compensation, including CEO André Bellemare making the media rounds Monday to apologize for his $9.5 million 2016 compensation package, amplify the fact that compensation has become a public obsession that has no relevance to the underlying business of determining compensation.

Whether Bellemare and his top executive colleagues at Bombardier deserve their $32 million in total remuneration — up from $22 million the year before — is now beside the point. Whatever one might think of the billiondollar bailouts and government loans and what appears to be Quebec Inc. cronyism, there is good reason to believe the aerospace company’s executive payouts are warranted.

Anybody else around who can do the job? If they can, how much would they want to be paid?

But nobody much cares about how compensation levels are set or why. The focus is on whether the money paid to high earners is morally fair or equitable, or whether it meets some standard established by ideological metrics that are outside the world of compensation.

Certain branches of the medical profession are routinely singled out for being overcompensated. The National Post’s Tom Blackwell reported Monday on an Alberta Medical Association internal report that claimed the “inequity” in doctor compensation is leading to a “breakdown in collegiality.” Radiologists and others make a lot more than family doctors. “Inequity negatively impacts social cohesion,” said the report. What’s social cohesion? Must be a medical term.

In Ontario last week, the annual release of the province’s sunshine list of bureaucrats and executives who earned more than $100,000 prompted new calls for action. The sunshine list is one of the province’s most useless disclosure documents, an envy-based ideologicallydriven report that serves only to increase salaries as employees demand equalizing compensation. The big discovery this year is that too few of the $100,000+ club are women, demonstrating the need to fill the gender sunshine gap.

Back to Bombardier, where the political flap was driven by the popular belief that the company’s receipt of government aid should prohibit executives from receiving market level compensation increases and performance bonuses. How can a company that received state funds and laid off thousands of workers justify paying top executives millions of dollars?

Bad politics. Premier Philippe Couillard, in Trump mode, sent out a tweet on Sunday to the effect that he had called Bombardier’s CEO to express his concerns on behalf of all Quebecers who are upset with Bellemare’s millions. Is this the same Philippe Couillard who reacted to a column by McGill’s Andrew Potter and helped promote his removal from one of his university jobs?

Bellemare took the hint, and has apparently agreed to pull back on the timing of some of his compensation. But why? Bellemare would appear to be doing his job, and his compensation is apparently based on future performance. Bombardier’s board of directors sets executive compensation, and according to Jean Monty, head of the board’s human resources committee, company bonuses and share incentives offered to Bellemare and others are in line with industry practice.

In a note posted on Bombardier’s website, Monty — former head of BCE — explained the news reports are incomplete. He said more than half of the $32 billion total paid to the six top executives is “conditional on the company delivering improved performance for at least the next three years.” As for the increase over the previous year, Monty noted that the six executives either joined the company or assumed new jobs during 2015.

The political issue certainly exists. The company is seen by many as a corporate ward of the state in Canada, and as such it is assumed as a political matter that its executives should not be paid according to market conditions.

Prime Minister Trudeau tried to make that point last week. When he was asked about Bombardier’s executive payouts, he said: “We respect the free market and the choices that companies will make.”

Not a great word choice. If the prime minister truly respected the free market his government would not have participated in Bombardier’s bailouts. What he should have said is that the government supports Bombardier with loans and investments, but the company continues to operate as a shareholder-controlled corporation that has the right and the obligation to compensate its executives on a market basis.

What Trudeau and Bombardier’s critics should know — must know — is that if the company is to succeed it needs to pay its executives properly. To do otherwise, to underpay and even punish executives, would be counterproductive and destructive — for the company, for shareholders, for employees and for the governments with money at stake.