Chief executive officers at 23 of Alberta's agencies, boards and commissions are getting pay cuts, in some cases losing hundreds of thousands of dollars, as the government moves to eliminate bonuses and bring salaries in line with the public service.

The new pay levels will take effect in two years for people currently in those positions, or upon renewal for nine CEOs whose contracts are set to expire before March 2019. 

Perks such as golf course memberships and housing allowances are being eliminated. Severance pay will be capped at a maximum of 12 months.

Bonuses will also be eliminated for executives and staff below the CEO level. The Alberta public service stopped paying bonuses in 2009.

The measures, announced Friday by Finance Minister Joe Ceci, will affect about 270 people and are expected to save the government nearly $16 million a year.

At a news conference, Ceci blamed the previous Progressive Conservative government for not taking action.

"Things got out of whack as a result of the previous government not taking time and attention to follow up the auditor general's recommendations that were made twice, starting as long ago as 2008,"  he said.

Under the new framework, Guy Kerr, CEO of the Workers' Compensation Board, will earn $396,720 instead of $896,206.

Jim Ellis, CEO of the Alberta Energy Regulator, will see his salary drop from $721,680 to $396,720.

Other high earners facing significant pay cuts include the CEOs of the Alberta Petroleum Marketing Commission, the Alberta Utilities Commission and the Balancing Pool.

Ceci said he held a conference call with the affected boards Friday morning. 

"The reaction, I would characterize, was respectful, understanding and appreciative," he said. 

Seven pay bands

Five organizations will not be subject to the pay bands but will be required to send the finance minister details of their executive compensation plans each year.

Alberta Health Services is unique in Canada, and the government could not find a similar organization to use as a benchmark.

The Alberta Management Investment Corporation (AIMCo), Alberta Treasury Branch, and the Alberta Teachers' Retirement Fund compete with the private sector for executives so the government decided their CEO salaries should meet industry standards.

The Alberta Electric System Operator is overseeing the province's switch to a capacity electricity market. The CEO salary will be frozen but not changed during the transition period to maintain the current leadership. 

The government looked at salaries in the Alberta public service and from similar agencies across the country to come up with seven pay bands.

Future contracts will be reviewed by the new Public Agency Secretariat to ensure they are in line with the new rules.

The combined total cost of perks for the CEOs was about $30,000.

The new regulation comes into effect on March 16. The two-year transition period for incumbents is a legal requirement.

The government is reviewing all agencies, boards and commissions. The first phase of the review resulted in 26 agencies, boards and commissions being amalgamated or dissolved last year.

Work on the second phase of the three-part review is underway.