MONTREAL – A public uproar over a hefty increase in compensation to senior executives at Bombardier prompted the company’s chairman to ask his board of directors late Friday to scale back his pay to 2015 levels.
The flap over a nearly 50 per cent increase in compensation to Pierre Beaudoin and five top executives was becoming a distraction to the work done by employees at the transportation giant, the chairman said in a brief statement.
“I take this step to put the focus back on what matters — the transformation of Bombardier into the most competitive plane and train manufacturer in the world,” the Bombardier chairman said in the statement.
A Bombardier spokesman said the reduction in Beaudoin’s compensation would amount to US$1.4 million. He would not comment on whether the company’s senior executives would follow Beaudoin’s example and agree to reduce their compensation.
The statement came hours after a number of Quebec cabinet ministers called for Bombardier to review its compensation policy in light of the fact it is getting hundreds of millions of dollars in taxpayer subsidies.
Total compensation for the Montreal-based manufacturer’s top five executives and Beaudoin was US$32.6 million in 2016, up from US$21.9 million the year before.
The Quebec government gave Bombardier (TSX:BBD.B) roughly US$1 billion in 2016 while the federal government recently announced a $372.5-million loan package for the firm’s CSeries and Global 7000 aircraft programs.
Provincial Economy Minister Dominique Anglade said earlier Friday that the decision to award hefty executive pay increases outraged Quebecers.
“The decision that (Bombardier) took shocked the population — and with reason,” she said in calling for Bombardier to reconsider the pay increases.
The province’s finance minister Carlos Leitao added his voice to the call for Bombardier to change course on its executive pay policy.
Beaudoin’s statement acknowledged the public outcry.
“The trust and confidence of our people and our governments are extremely important to the company, and to me,” the statement said.
In its regulatory filing, Bombardier attributed the higher compensation to a number of factors, including achieving profit and cash flow targets, securing CSeries orders and completing the first flight of the Global 7000 business jet.
However, Claude Beland, former head of the Desjardins Group as well as a shareholder rights association, told The Canadian Press in an interview that Bombardier’s executive compensation is “excessive” and “indecent.”
He called on Bombardier shareholders to show up to the company’s annual meeting on May 11 and oppose the executive pay decision in person.