Canadian Pacific Railway (TSX:CP) is cutting back on perks for its top executives and changing the way they’re paid in response to shareholder frustration over C-suite compensation.
In a regulatory filing, the Calgary-based company says it will place greater emphasis on safety and operating income to incentivize executives.
CP says operating ratio, an efficiency measure, will have less bearing on executive compensation going forward.
The measure improved for five straight years under Hunter Harrison, who recently departed as CEO, though some have raised concerns about CP’s approach to safety on his watch.
The issue of executive compensation came to a head during the company’s annual meeting last year, when shareholders rejected CP’s efficiency-based rewards system in a non-binding vote.
The company says it will rein in perks, including personal use of its corporate jet, for new CEO Keith Creel.
CP also reported in the same filing that Harrison earned $18.8 million in total compensation last year, down from $20.2 million in 2015.
Harrison’s compensation included $719,000 for unlimited personal use of the company jet.
Creel, who earned $8.9 million as president and chief operating officer last year, will have his use of the jet restricted to business commuting and family visits within North America, CP said.
“We believe that the changes are appropriate for CP at this stage of its evolution and that executive compensation is now more closely aligned with the long-term interests of CP shareholders,” said chairman Andrew Reardon in a letter to shareholders.