Bombardier defers executive compensation plan after backlash
'I can understand why people were so angry,' CEO says in recommending deferment plan
Bombardier backed down on its plans to offer hefty bonuses to six members of its senior executive team, putting off half of their $32 million in bonuses until 2020 and only if the company meets certain financial targets.
The aircraft- and train-maker landed in hot water last week over its plan to give six members of its leadership team large bonuses — in most cases an increase of up to 50 per cent — in a year when the company spun its wheels. Last year, the Quebec government bailed out the company with $1 billion, and Ottawa followed up with another $372.5 million in federal funds as recently as February.
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Two Quebec cabinet ministers called for Bombardier to rethink the pay packages last week, and roughly 200 people gathered outside the company's Montreal headquarters on Sunday to voice their anger against Bombardier.
"If it's private money they can do what they want, but now it's public money," said Jessica Lacombe, a teacher who attended the protest. "It's our taxes, it's our money."
In response to the backlash, the company made a concession late Sunday evening and announced the new plan will be to delay — but not reduce — the payouts to executives, as long as the company hits certain performance targets.
"This deferred compensation will only be payable if the company achieves performance goals that position it for long-term success, in line with the company's strategic plan," the company said in a statement.
Need top talent
In an interview with CBC Radio's Daybreak show in Montreal, CEO Alain Bellemare acknowledged he "can understand why people were so angry," because the company didn't do a good job of communicating the reasons behind their compensation policies.
"We were doing this to attract top talent because we need that to put the company back on the right track," Bellemare said."
"It will be payable only — and only if — we deliver on our financial goals," he said.
One of those goals is to make Bombardier more than five times more valuable by then as it is today. "These objectives will be based on our strategic plan for 2020, which aims to transform Bombardier into a $25 billion company," spokesperson Simon Letendre told CBC News in a statement.
At the current share price, Bombardier is worth just over $4.6 billion.
With files from The Canadian Press