Bombardier puts brakes on executive pay hike

PUBLIC PROTESTS

FREDERIC TOMESCO MONTREAL •

will delay paying more than half of last year’s compensation for top executives, responding to protests after boosting payouts despite receiving government aid and planning mass job cuts.

“I understand the reaction of Quebeckers,” chief executive Alain Bellemare said on Ici Radio-Canada radio Monday morning. “I heard, I’m listening, and it’s important for us because we have close links with Quebeckers and we want to preserve them.”

Payments will be delayed by one year to 2020 for six of the highest-paid executives, the Montreal-based company said in a statement Sunday night. The deferred amounts will only be payable if Bombardier achieves its performance objectives.

Executive payouts at the company stoked public anger in its home province as the maker of planes and trains boosted 2016 compensation almost 50 per cent after benefiting from taxpayer aid and announcing plans to eliminate more than 14,000 jobs. Quebec last year invested $1 billion in Bombardier’s CSeries jetliner program, which entered service more than two years late and billions of dollars over budget.

Quebec Premier Philippe Couillard took to Twitter on Sunday night to say he was “satisfied” with Bombardier’s decision to defer compensation. Opposition leader Jean-François Lisée called the move “scandalous” and asked for the bonuses to be cancelled.

Bellemare said he received a call from Couillard on Sunday about the compensation, “which encouraged me to go faster. We’ve learned a big lesson here,” the CEO said on RDI television.

He defended the compensation plan, saying the leadership team ushered its new CSeries jetliner into service last year, won key orders for the plane from Delta Air Lines Inc. and Air Canada, supervised the first flight of the Global 7000 business jet and helped strengthen the company’s finances. About $16 million in total compensation will be postponed until 2020, he told Ici RadioCanada.

“If we perform, not only will the executives benefit, but Quebec will benefit, our employees will benefit, and we’ll be capable of continuing to create jobs here,” Bellemare said. Details of the plan will be filed this week as a supplement to Bombardier’s 2017 Management Proxy Circular.

The payments deferral is “important for the workers and the population of Quebec,” Couillard tweeted in French. About one-third of the jobs Bombardier is set to eliminate by 2018 are in Quebec. That means about 5,000 people in the province will be affected.

Hundreds of people gathered Sunday in front of the company’s downtown Montreal headquarters to demonstrate against the payouts.

Ninety-three per cent of respondents in a Leger Marketing online poll published Sunday by the Journal de Montreal said they disagreed with Bombardier’s decision to boost the compensation of senior executives. Eighty-four per cent also said Quebec should review its support for the company. Leger polled 501 Quebec residents Friday and Saturday, and results are considered to be accurate to within 4.4 percentage points, 19 times out of 20.