The salaries of senior executives again shown the finger at Bombardier

Les salaires des dirigeants de nouveau montrés du doigt chez Bombardier

Photo: Paul Chiasson, The canadian Press
A facility of Bombardier in Montreal

The remuneration of directors of Bombardier gave rise to a new wave of discontent on the part of institutional investors, including the Caisse de dépôt et placement du Québec (CDPQ) and Fonds de solidarité FTQ, as opposed to the approach of the company on this issue.

As it does each year, the company will hold an advisory vote is not binding from its shareholders, on the question of remuneration in the framework of its annual meeting of shareholders, which will take place on Thursday. The support is generally high, as shares with multiple voting rights allow the family Beaudoin-Bombardier control 50.9% of the voting rights, whereas it only holds a fraction of the approximately 2.4 billion shares outstanding.

The CDPQ, the Fonds de solidarité FTQ, the investment Board of the Canada pension Plan, the public service pension plan of the California fund, the teachers ‘ retirement in california, as well as any other institution in florida (Florida State Board of Administration) have, however, decided to do it like in 2017 and go with a sling. Together, they hold at least 64 million shares of categories A and B, as well as obligations, according to the latest information available.

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“The severance pay of the former [president and] ceo [Alain Bellemare] enhanced, in particular through the granting of incentive pay, special is far beyond of what was expected in his contract at the time of his hiring’, argued, inter alia, the Fund in its proxy. Rejected in march last, Mr. Bellemare will be able to receive up to $17.5 million AC in the context of the severance pay that he had negotiated. In addition to a sum equal to two years salary, he will be entitled to a special payment of $ 4.9 million if the sale of Bombardier Transportation, Alstom, announced last February, just before his departure, came to fruition.

In its criticism, the CDPQ has also pointed to the premiums of non-recurring that will be granted to other executives of the company in the event that the sale of the rail division is embodied as well as other terms and conditions for the severance benefits. “These elements of compensation are considered excessive,” said the manager of retirement plans, who did not want to make further comments.

In a report published at the end of may, Glass Lewis, one of the main agencies of the board to the shareholders, had strongly criticized the sums obtained by Mr. Bellemare recommending to oppose the remuneration policy of the company, which, in his opinion, raises ” serious questions “. It recommended, however, to support the re-election of all candidates for the board of directors.

In an email, a spokesman for Bombardier, Olivier Marcil, stressed that the company was in compliance with the opinion expressed “by some investors,” emphasizing that the remuneration policy had on average been supported to the tune of 97 % over the past three years. He recalled that the transaction of $ 8.2 billion US $announced with Alstom was ” strategic for the future of Bombardier “, who drags a heavy debt of over 9 billion US$.

“The responsibility of the board is to ensure that the transaction will be completed successfully and thus create value for all our shareholders, including the Fund (which holds more than 36 % of Bombardier Transportation), which will be one of the first recipients, it should be remembered,” wrote Mr. Marcil.

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