Bombardier did ‘bad job’ communicating pay increases: CEO Bellemare
Underestimated the anger that would ensue over pay hikes as thousands of employees received pink slips.
MONTREAL — 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 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 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 – until 2020. The compensation would be paid as long as certain objectives are met.
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% 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.”
Quebec Economic Minister Dominique Anglade, whose government gave Bombardier US$1 billion, 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.
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.