MONTREAL – Bombardier’s senior executives saw their compensation rise by nearly 50 per cent last year at a time when it laid off thousands of workers, sought government aid and saw the first CSeries passenger jet take flight.
Total compensation for the Montreal-based company’s top five executives and board chairman Pierre Beaudoin was US$32.6 million in 2016, up from US$21.9 million the year before, according to a proxy circular ahead of its May 11 annual meeting.
CEO Alain Bellemare received US$9.5 million, up from US$6.4 million in 2015, including US$5.2 million in share and option-based awards and a US$1 million salary. His annual bonus almost doubled to US$2.36 million.
Beaudoin’s compensation increased to US$5.25 million from US$3.85 million a year earlier.
The chief financial officer and heads of business and commercial aircraft each received more than US$4 million, while the head of the railway division’s compensation increased 93 per cent to US$4.7 million. All of the men were hired at various times in 2015 as part of a corporate renewal Bellemare put in place after he started in February of that year.
In the regulatory filing, Bombardier attributed the higher compensation to a number of factors, including achieving profit and cash flow targets, securing CSeries orders and completing the first flight of the Global 7000 business jet.
Bellemare was also credited with achieving earnings at the high end of the company’s guidance, exceeding profit margin targets in all business segments and making significant progress on achieving the company’s plan to revive its fortunes.
Company spokesman Simon Letendre added that a large portion of the compensation is not guaranteed.
“For instance, 85 per cent of the compensation of the president and CEO is at risk and 28 per cent is comprised of stock options whose value depends on the appreciation of the Bombardier stock, something that would of course benefit all shareholders,” he wrote in an email.
The details come as a court battle between Ontario transportation agency Metrolinx and Bombardier continues over the delivery of light rail vehicles for the Eglinton Crosstown line in Toronto.
Bombardier is fighting to prevent the provincial agency from terminating its $770-million contract for 182 vehicles.
Metrolinx claims the Quebec-based plane and train manufacturer repeatedly failed to deliver a prototype vehicle on time for the scheduled 2021 opening of the $5.3-billion line.
The company is also seeking an injunction to prevent the provincial transit agency from ending the contract.
Bombardier is in the midst of a five-year turnaround plan that has involved mass layoffs as it tries to regain its financial footing. It is eliminating 14,500 jobs around the world by the end of next year.
Shares of Bombardier (TSX:BBD.B) last year increased 61 per cent to $2.16 on the Toronto Stock Exchange. They gained three cents at $2.11 in Wednesday afternoon trading.
The company cut its loss to US$981 million last year, down from US$5.34 billion in 2015 despite lower revenues.
The federal government announced in February a $372.5-million loan for the CSeries and Global 7000 programs to be repaid over 15 years.
Last year, Bombardier received a US$1-billion investment for the CSeries program from the Quebec government in exchange for a 49.5 per cent stake. The company also sold a 30 per cent stake in its railway division to pension fund manager Caisse de depot for US$1.5 billion.
Bombardier also revealed Wednesday that former Quebec premier Daniel Johnson and ex-Bell and Nortel CEO Jean Monty are stepping down from its board of directors. They will be replaced by Camso CEO Pierre Marcouiller and Antony Tyler, former CEO of Cathay Pacific Airways and the International Air Transport Association.
With files from Global News