Montreal: Bombardier Inc. Executive Chairman Pierre Beaudoin offered to forfeit a pay increase for 2016, responding to a firestorm of criticism that prompted Quebec’s finance minister to call for Canada’s biggest aerospace company to review its compensation practices.
“After listening to the recent public debate about the compensation of senior executives at Bombardier, I have asked the board of directors to reset my 2016 compensation, reducing it to the 2015 level,” Beaudoin said in a statement late Friday. “It is clear that this situation has become a distraction to the important work done by our employees and senior management to return this great company to growth.”
Executive payouts at Bombardier have generated public anger as the maker of planes and trains boosted compensation almost 50 percent after receiving taxpayer aid and announcing plans to cut more than 14,000 jobs. Quebec has invested $1 billion in Bombardier’s C Series jetliner program, which entered service more than two years late and billions of dollars over budget.
Beaudoin, whose family controls the Montreal-based company via a majority of the multiple voting shares, made $5.3 million last year -- a 37 percent increase from his $3.8 million in 2015. He was part of a group of six senior Bombardier executives whose combined compensation jumped in 2016 to about $32.7 million. Simon Letendre, a Bombardier spokesman, declined to comment Saturday when asked via email whether any other executives would follow Beaudoin’s lead. “People are shocked, and I’m shocked” at the payouts, Quebec Finance Minister Carlos Leitao told the TVA television network in an interview Friday. “I’m urging the board to rethink the compensation policy. I’m inviting them to review all this even before the next board meeting.”
Jean Monty, who heads Bombardier’s compensation committee, defended the company’s practices as “sound” and “fully and appropriately aligned with value creation.” They “reflect the global nature of the business and our need to attract and retain the very best Canadian and global talents,” he said.
More than half of the executive pay for 2016 “is conditioned on the company delivering improved performance for at least the next three years,” Monty said in a letter posted to Bombardier’s website Saturday. If the company doesn’t perform and the stock price doesn’t increase, “this money will never be paid.”
Three-quarters of the compensation of Bombardier’s senior executives isn’t guaranteed, Monty added. Rather, he said, the payout is based on achieving specific targets -- about 22 percent for short-term goals and 53 percent for long-term objectives.
