David Hahn, the controversial CEO of BC Ferries will step down at the end of the year, the ferry company announced on Tuesday morning.

Hahn announced his early retirement as part of a major cost containment program, saying he was stepping down voluntarily.

"I felt my job was done. I think I could have sat here easily for another 15 months and probably skated but that would have been a little out of personality, so it was the right time," he said.

"I'm quite happy with the decision and I think it's just an important step forward and a new set of eyes here couldn't hurt either."

Hahn said it wasn't an easy decision "but it will help facilitate a more constructive dialogue around future service levels and funding."

He said he was not pushed out of the job or pressured to leave.

"I want to be clear on one thing: It’s my choice to retire and it is on my terms that I’m leaving. I believe it to be in the best interests of the organization, otherwise I would have never considered it."

Compensation led to controversy

Hahn, 61, has been a lightning rod for controversy because of the $1 million compensation package he has been earning at a time when BC Ferries has been raising prices and cutting services.

BC Ferries executive remuneration amendment (2010)

The Authority must not approve an executive compensation plan for BCFS unless the plan [is]...:

- Consistent with the remuneration provided to individuals who, in organizations in Canada that are of a similar size and scope to BCFS, perform similar services or hold similar positions to that executive of BCFS.

- Not greater than the remuneration that provincial public sector employers in British Columbia provide to individuals who, in those organizations, perform similar services or hold similar positions to that executive of BCFS.

 

He also has a pension package worth $77,000 a year and a special supplemental benefit would have added another $237,000 annually for a total of about $314,000 every year if he had worked to age 62.

But in taking voluntary retirement one year before the end of his contract, Hahn is ineligible for any severance payments, according to BC Ferries board chairman Donald Hayes.

Hayes praised Hahn's eight years of service as head of the provinces ferry service.

"Under Mr. Hahn’s leadership, BC Ferries has been fundamentally transformed, resulting in improvements in all areas of the company’s business," said Hayes in a statement issued by the board. 

"Seven new ships have been brought into service on-time and on-budget, upgrades have been made at many of our major and minor terminals, and significant improvements have been made in the travel experience for our customers, said Hayes.

But NDP ferries critic Gary Coons said it's been a horrendous time for coastal communities that depend on the ferry service.

"When you look at what's happened with BC ferries over the last seven or eight years you know it's very clear that the decision  today shows how BC ferries has basically been run aground since the Liberals started treating them as a cruise ship experience instead of an integral part of our transportation network," said Coons.

Hayes said the successor to Hahn at the head of the publicly-owned corporation will be announced in November.

The new head will be paid according to new guidelines limiting the compensation of BC Ferries executives to the same levels as provincial public sector workers in similar positions, said Hayes.

Major cost cutting program rolled out

mi-bc-110825-bc-ferries-coastal-inspiration

BC Ferries Coastal Inspiration is one of the newest vessels used on the three major routes between Vancouver Island and the Mainland. (BC Ferries)

Along with his retirement Hahn also rolled out plans to cut costs at the provincially-owned ferry corporation to reduce the $20 million budget shortfall in the current fiscal year.

"Over the last month, I have conducted an extensive review of our operating and capital costs and the following is a list of cost saving actions to be undertaken," he said.

BC Ferries says the new cost cutting measures include:

  • Hiring freeze of all non essential positions.
  • Wage and salary freeze for next two years.
  • Select early retirements.
  • Reductions in executive compensation through elimination of the long term incentive plan.
  • Cancellation of discretionary expenses.
  • Reduced use of outside contractors and consultants.
  •  Elimination of many charitable and community donations.
  • Cancellation of Vancouver Canucks partnership.
  • Eighteen month delay in select capital expenditures.
  • Application to provincial government for cancellation of up to 400 round trips per annum (major routes only).