(Adds context, details from Caisse letter)
By Allison Lampert
MONTREAL, May 8 (Reuters) - Canada's second-largest pension fund, a key institutional shareholder in Bombardier Inc BBDb.TO , said it has withheld support for the re-election of the company's executive chairman Pierre Beaudoin at its annual general meeting this week.
Caisse de depot et placement du Quebec said in a letter published on Monday that the board of the Canadian plane and train maker should be headed by a fully independent director.
Beaudoin, a former chief executive, is a member of the company's founding family, which controls the company through its dual-class share structure. The Caisse's decision puts added pressure on the board, which came under fire this year for agreeing to pay raises of up to 50 percent for its senior executives at a time when the company is reducing its workforce and received more than $1 billion in government injections. pension fund, which owns almost 48 million shares in Bombardier, also voted against an advisory resolution on executive compensation.
While the Caisse praised a company decision to defer the payment of more than half of total planned 2016 compensation for its six named executive officers until 2020, the pension fund questioned the initial reasoning behind the hikes.
"In our view, the board's recent decisions regarding executive compensation fall short of the necessary standard of stewardship," wrote Kim Thomassin, executive vice president legal affairs and secretariat for the Caisse, in the letter dated May 8. "Our concern is that the initial decisions were made in the first place and what that reflects about the governance of the company. This is especially true for the compensation that the board plans to pay the executive chair."
A Bombardier spokesman could not be immediately reached for comment.