Bombardier management, directors on the hot seat at annual meeting
Several investors, fund managers won't support Beaudoin’s re-election as chair, and executive compensation plan.
DORVAL, Que. — Bombardier says Pierre Beaudoin is planning to remain chairman of the company’s board of directors but relinquish his executive role as of June 30.
The company expects that change to be formally approved by Bombardier’s board of directors following the annual general meeting (May 11).
Five of Canada’s largest pension fund managers, along with several large American institutional investors, have said they won’t support the re-election of Beaudoin, whose family controls the company through multiple-voting shares.
They will also oppose Bombardier’s executive compensation plan and some will withhold votes for several director nominees.
But Beaudoin said in a company statement he planned to continue working with the board as chairman.
He also said he supports the management team led by Alain Bellemare, who replaced him as president and CEO in early 2015.
“This change reflects the very successful transition of Bombardier’s executive leadership to Alain over the past two years,” Beaudoin said.
Bellemare said the company continues to “gain momentum as we execute our transformation plan and begin to unleash the full value of the Bombardier portfolio.”
Bombardier Inc. also revealed its first quarter revenue was down 9% from the same time last year, but its loss for the three-month period has been reduced to US$31 million.
Bombardier’s original plan was to award Beaudoin and its top five executives compensation hikes of nearly 50%. Beaudoin later renounced the increases while other executives postponed the compensation plan by a year until 2020 after the company faced an outpouring of anger that included protests outside the company’s Montreal headquarters.
That came after the company received assistance from the federal and Quebec governments totalling nearly US$2 billion over the past year.
The shareholders vote is only an advisory to Bombardier’s board. However, mounting opposition could pressure a reaction from the founding family, which owns 13% of outstanding shares but controls 53% of votes.
The Canada Pension Plan Investment Board, Caisse de depot, Ontario Teachers’ Pension Plan, British Columbia Investment Management Corp., Alberta Investment Management Corp. and the Quebec Federation of Labour’s Solidarity Fund have said they will oppose management of the family-controlled company.