Following the release of the notice of its annual general meeting in May and its annual disclosure of executive remuneration there were public protests outside the Bombardier headquarters in Quebec against the pay rises. In the Canadian parliament the Conservative leader of the Opposition, Rona Ambrose criticised the prime minister Justin Trudeau for giving the company money when it was increasing executive pay and laying off staff.
“Isn’t the prime minister embarrassed? How is this helping the middle class?” Ambrose asked.
The executive chairman of Bombardier, Pierre Beaudoin, responded quickly to the criticism saying that he had asked for his 2016 pay to be scaled back to 2015 levels.
Beaudoin said: “After listening to the recent public debate about the compensation of senior executives at Bombardier, I have asked the board of directors to reset my 2016 compensation, reducing it to the 2015 level. Bombardier is a proud Canadian company, with a storied history that began in Quebec and has spread around the world as our business has expanded. The trust and confidence of our people and our governments are extremely important to the company, and to me. It is clear that this situation has become a distraction to the important work done by our employees and senior management to return this great company to growth.”
Meanwhile the chair of Bombardier’s human resources and compensation committee, Jean Monty issued a defence of the company’s remuneration policy and the media reporting of its company announcements.
He stated: ” For our senior executives, the vast majority – 75% – of their compensation is not guaranteed. Rather, it is based on achieving specific short and long term targets; about 22% for short term goals and 53% for achieving long-term objectives.
“One specific example, which has not been reported in the media, is that more than half of the $32 million in senior executive compensation listed in our 2017 proxy circular is conditioned on the company delivering improved performance for at least the next three years. If the company does not perform; if it does not increase its share price and create value for our shareholders, this money will never be paid.”
However, after days of criticism Alain Bellemare, Bombardier’s chief executive requested that the Bombardier board of directors defer the payment of more than half of the total planned 2016 compensation for six named executive officers until 2020.
He said: “Over the past seventy-five years, our fellow citizens have always been by our side. It is because of this deep relationship that we are sensitive to the public reaction to our executive compensation practices.
To address these concerns, I’ve asked our board of Directors to defer the payment of more than 50% of the total planned 2016 executive compensation for our six named executive officers to 2020. This compensation will only be payable if we achieve our performance objectives; delivering value to all our shareholders, including the people of Québec and Canada.
This action further demonstrates the long-term commitment of the senior executive team to the successful transformation of Bombardier.”
The company is currently pushing through a turnaround plan to improve performance which is designed to be completed by 2020. In the company’s 2016 financial report Bellamare said that its results that year showed that Bombardier was making progress however, this restructuring has resulted in thousands of job losses.