Jacques Nadeau Le Devoir
It is the total compensation of $ 17.5 million paid to the outgoing president, Alain Bellemare, who hits the Caisse de dépôt.
The institutional shareholders Caisse de dépôt in the lead, are fighting back once again against the board of directors of Bombardier. Still a question of compensation deemed to be excessive for the senior executives offered investors a compound annual return of negative 14.2% between end 2014 and end 2019.
This time, for the Caisse, it is the total compensation of $ 17.5 million paid to the outgoing president, Alain Bellemare, who crushed. A remuneration consisting of a bonus of $ 4.9 million payable if the sale of Bombardier Transportation Alstom is carried out.
“The severance of the former chief executive officer, enhanced in particular by the grant of the incentive pay, special, is far beyond of what was expected in his contract at the time of his hiring in the wake of the amendment made on 28 February 2020. The same goes for the bonus incentive compensation and severance to certain other executive officers which are also accessible in case of resignation. These elements of compensation are considered excessive, ” wrote the Fund in justification for his vote against the remuneration policy that will be, however, adopted in the framework of the meeting of Thursday.
The Fonds de solidarité FTQ, owner of the nearly 3 million shares of Bombardier, also composed this group of institutional shareholders who express their opposition in an advisory vote, but non-binding. The quebec institution has against the regime of stock options to the executive officers.
“Alone, the plan of stock options to the officers included in the policy only [meets] the criteria to obtain the support of the Fund “, he wrote in an email.
The annual meeting of shareholders of 2017 had also been the theatre of an outcry of institutional investors. The six most senior executives have seen their compensation grow by some 50 % to 32.6 million US$, growth distorted by a set of period of hiring, but that had struck the collective imagination in a context of public support, massive efforts to save the CSeries program.
The severance of the former chief executive officer, enhanced in particular by the grant of the incentive pay, special, is far beyond of what was expected in his contract at the time of his hiring
— The Caisse de dépôt
The independence of the chair of the board of directors and its compensation were the main target. Pierre Beaudoin, then president of the board, had waived his increase under the pressure of public and payments to executive officers have been deferred.
“The recent decisions of the board of directors on the remuneration of the senior officers of the company are not up to the standards of governance and responsibility to stakeholders […] This is particularly true for the remuneration that the board intends to grant to the executive chairman of the board “, wrote then the Fund in a letter addressed to the senior vice-president, legal Affairs of Bombardier. The manager reiterated his support to Alain Bellemare, and wanted obviously he has a free hand to carry out its turnaround plan.
A recovery plan, which has in the end been a little generous to the shareholders. According to the calculations presented by Bombardier, including the dividend reinvested, the compound annual growth rate of the share was negative 14.2 % from December 31, 2014 and December 31, 2019.
By comparison, the S & P / TSX index of the Toronto stock Exchange has made 6,3 % annually in the meantime. The slide has continued since that time, the action falling around 50 cents against the 1.90 $ end of 2019, a decrease of 74 %. An action that will be removed next Monday the major indices of reference, such as the S & P / TSX composite and the TSX 60.
In January 2015, shortly before the arrival of Alain Bellemare, it was trading at 2.90 $, to reach a peak of 5.41 $ on July 14, 2018, at the end of a period of euphoria for six months.
It must be remembered that five years ago, faced with the dismal commercial failure, announced in the aerospace, Bombardier had come close to bankruptcy. This outcome was avoided thanks to the injection of US $1 billion for Quebec in the CSeries program, to that 1.5 billion of the Fund in BT Holdco.
Today, Bombardier is confined to the sector highly cyclical business aircraft. She drags a debt of over 9 billion US$, against $ 7.6 billion in 2014, based on market capitalization fell to $1.2 billion CDN.
She prays for the realization of the transaction of $ 8.2 billion US $announced with Alstom for the acquisition of Bombardier Transportation, owned 32.5% by the Caisse.