Jacques Nadeau Le Devoir
The ex-boss of Bombardier, Alain Bellemare. One of the main agencies of the board to the shareholders recommended to vote against the approach of the company in remuneration matters.
The severance pay awarded to the ex-boss of Bombardier Alain Bellemare, who could reach 17.5 million $CA go wrong in one of the main agencies of the board to the shareholders, recommending to them to vote against the approach of the company in remuneration matters.
In the report it has just published, Glass Lewis believes that the practices of the manufacturer of planes and trains on the matter raised “serious questions” when one takes into account its financial performance under the guidance of one who has been ruled out last march in favour of Eric Martel, former president and chief executive officer of Hydro-Québec.
A first version of the document was to the compensation policy, but an update has been made to the following decisions have been taken by the company at the end of its fiscal year ended December 31.
If Glass Lewis supports the 13 candidates seeking a seat on the board of directors at the annual meeting of the 18 June, otherwise to the place of the advisory resolution non-binding for the company in terms of compensation of its executive officers.
“We question the substantial compensation awarded to the former president, one can read. Mr. Bellemare remains eligible to receive a payment of [$4.9 million] have been established in the weeks prior to [the end of his term]. “
On Wednesday, Bombardier had not commented on the contents of the report.
Under its arrangement with the company, Mr. Bellemare will be entitled to a severance payment of approximately 10 million, while the value of its awards over shares is of around 2.7 million. It will also have the right to a special payment of $ 4.9 million if the sale of Bombardier Transportation Alstom is a reality.
“Nevertheless, the juxtaposition of low yields, under the leadership of Mr. Bellemare with this premium separation causes a discomfort “, one can read in the document.
Last year, Bombardier posted a net loss of 1.61 billion US $on revenue of 15.8 billion US$, down 3 %, in a year marked by, among others, persistent problems of enforcement within its rail division, which must in principle pass in the bosom of Alstom in the coming year.
In order to alleviate the heavy debt — more than 9 billion US $ — that drags Bombardier for several years now, Mr. Bellemare has made multiple sales of assets to refocus the business to the aircraft business.
In its circular sent to its shareholders in view of his appointment, the company revealed that the board had given the green light to a special payment in cash to “a wide range of key employees at various levels” if the sale of Bombardier Transportation Alstom to materialize — a decision that calls into question Glass Lewis.
“We are very sceptical of the place of benefits payable during a transaction, argues the firm, stressing that these non-recurring payments that often exceed the threshold of a million dollars. Shareholders should carefully consider these premiums and their justification. “
In spite of the many concerns that Glass Lewis, the recommendations contained in the report face a major obstacle, since the family Beaudoin-Bombardier control 50.9% of the voting rights, whereas it only holds a fraction of the total shares outstanding.
Glass Lewis, however, has not criticized the pay overall — which takes into account base salary, bonuses and other benefits, such as the options on shares granted to Éric Martel, which amounted to approximately 7.2 million this year.
His treatment provides for a base salary of approximately 1.2 million, of which, however, will be reduced given that the latter has waived its remuneration for the activities of Bombardier were neutral due to the pandemic of COVID-19.
In an email, the company is said to be in “disagreement” with the evaluation of Glass Lewis, noting that the severance pay of her former boss was “consistent with the practice of several other public corporations, canadian and us”.
“In respect of the payment related to the transaction with Alstom, it must be remembered that it is a condition to the closing of the transaction,” wrote the spokesperson Olivier Marcil. It is therefore neither paid nor guaranteed. The former president has been at the heart of negotiations, and that this amount represents what it would have been entitled if his contract had not been terminated. “
To see the video
