MONTREAL â€” Bombardier did “a bad job” explaining its decision to raise executive compensation, but the company has listened to the public and is now ready to turn the page, CEO Alain Bellemare says.
In an interview, Bellemare acknowledged that Bombardier (TSX:BBD.B) underestimated the anger that would erupt over the pay hikes, which were to come as it was issuing pink slips to thousands of employees while receiving federal and provincial assistance.
“It’s all on us at Bombardier,” he said. “The message here is we did listen, we paid attention, we care.”
Bellemare announced late Sunday that he has asked Bombardier’s board of directors to delay the payment of more than half of this year’s total planned compensation for six executive officers, including himself, by one year â€” until 2020. The compensation would be paid as long as certain objectives that haven’t changed are met by that time.
The remuneration is required to attract top talent to turn around the company’s fortunes, which in turn benefits employees and shareholders alike, he said.
Last week, the company issued a proxy circular showing that Bellemare and five others were in line for a nearly 50 per cent increase in compensation, most of which was to be granted in 2019. The disclosure stoked fierce outcry that lasted for days, including a weekend protest at Bombardier’s headquarters in Montreal.
Federal Economic Development Minister Navdeep Bains said Monday that like many Canadians, he was disappointed by the Bombardier executive pay raises, but it seems like the company is trying to address those concerns.
“Clearly there’s a recognition that they need to make changes, that they need to approach this differently,” Bains said, striking a different message from the one offered by the prime minister last week.
Asked how he can justify the $372.5-million federal loan for Bombardier’s CSeries and Global 7000 aircraft programs, Justin Trudeau said his government respects “the free market and the choices that companies will make.”
In Laval, Que., Premier Philippe Couillard said Monday he spoke with Bellemare about the controversy but stressed that it’s not a government’s role to manage companies.
“If the government sends a signal to the world that when you come here with a company, the government meddles in your business and manages your business, we won’t get very far in Quebec,” he said, adding that people forget how important it was for the province to invest US$1 billion in Bombardier last year.
“At the end of the day, if Quebecers don’t make money with CSeries, (the executives) won’t get their bonus.”
Provincial Economic Minister Dominique Anglade said the company didn’t realize the criticism that would ensue.
“It’s quite normal to see the reaction that we saw and I think the company heard the population,” Anglade said in Montreal.
Total compensation for Bombardier’s top five executives and board chairman Pierre Beaudoin was to be US$32.6 million in 2016, up from US$21.9 million the year before. With the change, Bellemare said he received US$4.2 million last year in salary and bonuses and will get US$5.2 million in 2020 if the company meets its performance targets.
Beaudoin said he would ask the board of directors to bring his 2016 compensation to US$1.4 million, in line with what he received the previous year.
â€” With files from Julien Arsenault.
Ross Marowits, The Canadian Press