Bombardier defends pay structure after public outcry over executive pay increases

Bombardier defends executive pay raises

MONTREAL — Bombardier was doing damage control Saturday in the face of an uproar over a hefty increase in compensation to senior management, but the company’s explanations didn’t satisfy all its critics.

Bombardier issued an open letter explaining the company’s compensation policies and called it “inappropriate” to compare the 2016 compensation to that of the previous year.

Bombardier must compete with firms globally to recruit and retain talent, said the letter from Jean Monty, the head of Bombardier’s human resources and compensation committee. It also contended that 75 per cent of compensation for most senior Bombardier executives is based on meeting performance targets and is not guaranteed.

“I am confident that our compensation practices are sound,” Monty wrote. 

“They reflect the global nature of the business and our need to attract and retain the very best Canadian and global talents.”

The company is facing a backlash after awarding a nearly 50 per cent pay increase to six top executives in 2016 compared to the previous year while receiving hundreds of millions of dollars in taxpayer subsidies.

Compensation for the Montreal-based manufacturer’s top five executives and board chairman Pierre Beaudoin was US$32.6 million in 2016, up from US$21.9 million the year before.

Monty’s letter said pay comparisons between 2016 and 2015 are misleading because some of the executives started with Bombardier only part way through 2015 — for example Alain Bellemare was appointed President and CEO in February, 2015.

Beaudoin though, issued a statement late Friday saying he asked the board of directors to reduce his compensation for last year to 2015 levels. Hours earlier two Quebec cabinet ministers said Bombardier should reflect on the compensation it provided to its senior executives.

Beaudoin said he took the step because public trust is important to Bombardier and he was also concerned the issue has become a distraction from the work employees at Bombardier are doing.

However Beaudoin’s voluntary pay cut, which Bombardier said will amount to roughly US$1.4 million, was labelled by some critics as an insufficient measure that didn’t address the issues behind the hikes.

“Mr. Beaudoin is member of a billionaire family that controls the company. So no, a sacrifice of a million dollars doesn’t change anything,” said Aaron Wudrick, the director of the Canadian Taxpayers Federation, in an email.

Renaud Gagne of Unifor, which represents almost 1,000 Bombardier workers, agreed that Beaudoin’s decision to renounce the raise didn’t mean much.

“Executive salaries were already exaggerated (in 2015), especially compared to that of the average worker,” he said.

“They should be more respectful of the situation seeing as they’re asking for public money.”

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.

A spokesman for the International Association of Machinists and Aerospace Workers, which represents some 4,500 Bombardier workers, called Beaudoin’s decision “a step in the right direction.”

David Chartrand said the bonuses could be seen as disrespectful to workers, especially since Bombardier is eliminating 14,500 jobs around the world by the end of next year.

“They say that they need us to tighten our belts and need sacrifices from the employees, it’s a little disrespectful to ask that from the employees when they give themselves these kinds of bonuses,” he said.

The Canadian Press

Just Posted

VIDEO: Rubbing shoulders with country stars a dream for aspiring young Langley singer

One day soon, maybe, 10-year-old Mackenzie Hurtubise will sing at the Basics for Babies fundraiser.

Giants back in Langley hoping to continue winning streak

The G-Men defeated Royals in Victoria Saturday, the second triumph of the week over the same team.

PHOTOS: Langley City parents given relief from holiday chaos

A Timms Community Centre event Saturday offered a variety of activities for young children.

Langley’s assistant lacrosse captain tallies up five goals in Calgary loss

Stealth fell to Roughnecks, but hoping for comeback on Dec. 29 in New England.

LETTER: Not too late to protect the character of Brookswood

With election year coming, a letter writer suggests council be held accountable for re-development.

VIDEO: Recovering addict shares art and story to motivate others

A Langley City man spends time each day painting in McBurney Plaza.

Update: RCMP arrest domestic assault suspect west of Kamloops.

The RCMP Emergency Response Team made the arrest at around 4:30 p.m.

Owl found dead after eating rat poison leaves B.C. woman concerned

After finding the owl on her Surrey property, Christine Trozzo says the poison is a concern for kids

Change to CPP death benefit panned as insufficient to cover funeral costs

Funeral Services Association of Canada lobbied governments to raise the value to $3,580

B.C. woman brain injured in crash as a baby gets $1.1 million in damages

Trial heard the woman was 16 months old, being carried by her mother when they were both hit

Family Christmas fun at Aldergrove’s Loft Country farm

The Loft Country children’s horse camp in Aldergrove is celebrating Christmas in a new way this year

Court denies WestJet’s bid to toss out discrimination lawsuit of former worker

Mandalena Lewis is suing WestJet over allegations of gender-based discrimination

VIDEO: 3 months later, rescued sea lion released back into ocean

The young animal was found in Campbell River three months ago

Sagmoen neighbours recall alleged hammer attack

Woman was screaming outside Maple Ridge townhouse in 2013

Most Read