Bombardier Inc is to defer paying more than half of last year’s planned compensation for its six most highly paid executives until 2020 as the planemaker, whose recovery was relaunched by taxpayer funds, bows to widespread indignation in its home province of Quebec.
The deferred amounts will only be payable if Bombardier achieves its performance objectives, chief executive officer Alain Bellemare said in a statement issued on Sunday night.
Details would be provided in a supplement to Bombardier’s Management Proxy Circular, which is to be filed this week.
Photo: Reuters
Executive payouts at Quebec-based Bombardier have stoked public anger in its home province, as the maker of planes and trains boosted last year’s compensation almost 50 percent after receiving US$1 billion in taxpayer aid and announcing plans to cut more than 14,000 jobs.
Quebec Premier Philippe Couillard on Sunday night took to Twitter to say he is “satisfied” with Bombardier’s decision, while opposition leader Jean-Francois Lisee called the move “ scandalous” and asked for the bonuses to be canceled.
“Over the past 75 years, our fellow citizens have always been by our side,” Bellemare said in the statement. “It is because of this deep relationship that we are sensitive to the public reaction to our executive compensation practices.”
Quebec last year invested US$1 billion in Bombardier’s C Series jetliner program, which entered service more than two years late and billions of US dollars over budget.
The payments deferral is “ important for the workers and the population of Quebec,” Couillard tweeted in French.
Bombardier’s disclosure last week of the pay increases prompted Quebec Minister of Finance Carlos Leitao to express shock at the payouts.
He also urged the company’s board to rethink the compensation policy, a call that was echoed on Sunday by Quebec Government House Leader Jean-Marc Fournier.
Hundreds of people on Sunday gathered in front of the company’s downtown Montreal headquarters to demonstrate against the payouts, with some of them chanting: “Shame on Bombardier.”
While executive chairman Pierre Beaudoin on Friday to forfeit his pay gain, Bombardier had initially declined to comment on whether other senior managers — including Bellemare — would follow Beaudoin’s offer to give up the pay increase.
Ninety-three percent of respondents in a Leger Marketing online poll published on Sunday by the Journal de Montreal said they disagreed with Bombardier’s decision to boost the compensation of senior executives.
Eighty-four percent also said Quebec should review its support for the company.
Leger polled 501 Quebec residents on Friday and Saturday, and results are considered to be accurate to within 4.4 percentage points, 19 times out of 20.
Bombardier’s five-year turnaround plan aims to reach break-even cash-flow next year and US$25 billion of annual revenue by 2020.
It is being spearheaded by Bellemare, who was hired in February 2015 to replace Beaudoin as chief executive officer.
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