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UPDATE 1-Bombardier should consider public anger over pay raises - minister

Published 2017-03-30, 05:55 p/m
© Reuters.  UPDATE 1-Bombardier should consider public anger over pay raises - minister
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(Adds comment from company shareholder in last paragraph)

By Allison Lampert and Kevin Dougherty

MONTREAL/QUEBEC CITY, March 30 (Reuters) - Bombardier Inc BBDb.TO should reflect on pay raises of up to 50 percent for its senior executives in light of a public backlash over company layoffs of thousands of employees, Quebec's economy minister said on Thursday.

Total compensation for the Canadian plane and train maker's top five executives and board chairman rose to $32.7 million in 2016, up from $21.9 million a year earlier, according to a proxy circular published on Wednesday ahead of Bombardier's May 11 annual meeting.

In 2016, Bombardier announced two rounds of layoffs totaling 14,500 people over two years at sites around the world. Bombardier has said it will still hire for certain programs.

"If I was Bombardier, I would reflect on the message they are getting from the public," Economy Minister Dominique Anglade said in provincial parliament, as angry Quebecers took to social media and popular talk shows on Thursday to denounce the raises.

In an email, Bombardier spokesman Simon Letendre said the higher compensation reflects management's success in hitting the company's 2016 targets. He said a large proportion of executive remuneration is tied to performance or to share price appreciation.

Canadian Prime Minister Justin Trudeau, pressed to comment on the issue at a news conference in Brampton, Ontario, said, "We respect the free market and choices companies will make, but we also have a responsibility to ensure the investments we make with taxpayers' dollars are leading to good jobs and growth." He did not elaborate.

Bombardier's chief executive officer, Alain Bellemare, who launched a five-year turnaround plan, earned almost $9.5 million last year, up from $6.4 million in 2015.

Bombardier, which was forced to consider bankruptcy in 2015 after facing a cash crunch while developing two new planes, received a $1 billion investment from Quebec that year in its CSeries jets. In February, it got C$372.5 million in loans from Canada's federal government. did a good job last year," said Michel Nadeau, executive director of the Institute for Governance of Private and Public Organizations. "But I think they should wait (for raises) until the company is doing better."

Nadeau said the 36 percent raise secured by Bombardier's executive chairman and former CEO, Pierre Beaudoin, to $5.2 million was out of line with Canadian industry norms. Beaudoin is a member of Bombardier's founding family that controls the company.

"I think the shareholders have the right to know why he is being paid $5 million," Nadeau said.

Canada's second largest pension fund, Caisse de depot et placement du Quebec, has invested $1.5 billion for a 30 percent stake in Bombardier's rail division. A Caisse spokesman said the fund considers "the importance of a strong link between performance and compensation" in all its investments, including Bombardier.

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