JULY 2017
24
INHOUSE
A
controversial salary and bonus
plan for executives at Bombardier
ultimately received the blessing
of its shareholders this spring,
but it followed protests and
negative publicity that any company would hope
to avoid.
Individual and institutional shareholders criti-
cized the initial plan that would boost executive
compensation by nearly 50 per cent, following
significant employee layoffs last fall and the need
to obtain more than $370 million in loans from
the federal government.
In the end, most of the bonuses will not be paid
until 2020 and are tied to company performance.
As well, Pierre Beaudoin, a member of the
company's founding family, announced he would
step down as executive chairman of Bombardier.
The shareholder vote, the so-called "Say
on Pay" provision that many publicly traded
companies in Canada have adopted, is only
an advisory measure. However, the fallout for
Bombardier is one of the most high-profile
recent examples of the need for companies to
formulate executive compensation packages that
are not only reasonable but that can be properly
explained and justified to shareholders.
High-stakes
compensation
The goal these days
is to avoid the 'risk
of pay for failure'
BY SHANNON KARI
