BC Ferries replaces executive bonuses with hold backs
Top brass at the ferry company will get raises equal to past bonuses first
BC Ferries is dropping its bonuses for its executives and senior managers, after pressure from the provincial government, but it does not mean the top brass at the company will get paid any less.
The company announced on Wednesday morning it will replace its controversial bonus program with a plan to hold back a portion of pay based on how well corporate targets are met.
But the execs are unlikely to see any loss in income because they will first get raises equal to their average annual bonus over the last four years.
The company says once the hold back plan is in place, those salaries will be frozen until 2016. The new rules will apply to all executives and senior managers.
All other lower level managers will also have their bonuses replaced with raises based on the average of past year bonuses, but will not be subject to a hold back passed on job performance.
Bonuses doubled despite falling ridership
In August, it was revealed thatBC Ferries had nearly doubled bonuses for some senior executives, despitefalling ridership andrising fares.
The company revealed its chief executive officer Michael Corrigan made $563,000 after bonuses and a salary boost of eight per cent.
Executive vice-president Glen Schwartz saw his "annual incentive" pay increase to $127,008, up from $64,298. And Robert Clark, executive vice-president and chief financial officer, saw his bonus jump to $133,711, up from $73,359.
The revelation prompted the province to order BC Ferries' board of directors to report back within one month with a plan to get such compensation under control. Three months later the plan has finally been delivered.
Board chair Donald Hayes defended the old bonus system, but said the changes were made at the request of the government.
“While the Board strongly believes that the bonus plan for executives and managers has driven significant results in all areas of the company’s performance, we have decided, at the request of the Minister of Transportation and Infrastructure, to replace the plan with a salary hold back plan tied to achievement of financial and business results, similar to crown corporations."
BC Ferries was set up as a Crown Corporation in 1960, but was reorganized into an independent, commercial organization in 2003.
It is governed by an independent Board of Directors appointed by the B.C. Ferry Authority, which holds the single issued voting share in the company.