Bombardier has defended its remuneration policy after a plan to raise executive pay by almost half provoked howls of outrage in Canada last week.
On Friday (Mar. 31) the company’s executive chairman, Pierre Beaudoin, opted to forego the extra pay, but his announcement was quickly followed by a combative statement from Bombardier’s head of human resources, Jean Monty.
Monty argued that changes to executive pay were in line with what other companies of a similar size offered, and that most of the remuneration was not guaranteed, but linked to long- and short-term performance targets.
“If the company does not perform; if it does not increase its share price and create value for our shareholders, this money [$32 million in senior executive compensation] will never be paid,” he said.
Last night (Apr. 2), Bombardier chief executive Alain Bellemare went further and ordered that half of executive compensation decided for 2016 be deferred until 2020.
Bombardier hopes that this will be enough to calm public indignation about the pay rises for 2016, a year in which Bombardier received US$1 billion of taxpayer investment from the state of Quebec. This year the Canadian government is set to pump an extra US$282m into the company.
There is understandable anguish that a company forced to resort to such public largesse is still rewarding its top brass so handsomely, even if the extra compensation is peanuts, really, at less than 0.01% of Bombardier revenues.
The protesters outside Bombardier’s Montreal headquarters were also angry, however, that pay rises were tabled for the same year in which the company proposed 14,000 job losses.
“By any objective measure the Bombardier leadership team had an exceptional year in 2016,” said Monty in his defence of the remuneration policy.
That may be true with regard to Bombardier’s share price, which climbed almost 300%, but in other areas, notably aircraft pricing and taxpayer support, 2016 was exceptional for all the wrong reasons.