As Alberta Health Services prepares to award bonuses to dozens of top executives this spring, the medical superboard is coming under pressure from the premier’s office and the official Opposition to hold the line on the controversial performance pay this year.
The health authority should consider curbing pay-at-risk for senior executives immediately, rather than waiting until the 2013-14 fiscal year to axe the extra compensation, Stefan Baranski, a spokesman for Premier Alison Redford, said Tuesday.
Asked whether the 2012-13 bonuses are acceptable, Baranski said: “I think that would run counter to the intent and the spirit of all the action government has taken and certainly the expectations we’ve laid out across the broader public sector.”
But AHS board chairman Stephen Lockwood said Tuesday it would be “unreasonable” to change compensation contracts for senior leaders after more than 90 per cent of the fiscal year has already passed.
“These people have already done the work and it would be wrong from many perspectives to not compensate them as per their terms of employment,” Lockwood said in a statement to the Herald.
“We’ve already said that pay at risk is eliminated moving forward, but we are honouring our commitment for work that has already been completed.”
Specific figures for this year’s pay-at-risk for executives will be contained in AHS’s audited financial statements, due to be presented at the June board meeting, according to an authority spokeswoman, who noted the amount has been budgeted for in the 2012-13 financial plan.
The AHS board announced earlier this month plans to cut $35 million in administrative costs over the next three years, including freezing pay for 10,000 managers and other senior staff, reducing travel and potentially trimming executive positions.
Pay-at-risk is set to be eliminated in the next fiscal year, which starts April 1.
The extra compensation, determined by the AHS board, stems from an annual portion of salaries linked to how many specific performance targets eligible executives met that year.
Last year, about 100 senior staff were eligible for AHS bonuses, receiving a total of about $2.4 million. Among the pay-at-risk awarded last year was $480,000 handed out to 13 top executives.
AHS chief executive Dr. Chris Eagle said at last month’s board meeting the medical authority looked “pretty hard” at making changes for 2012-13, but decided it would be unfair to end the executive raises this year.
Wildrose health critic Heather Forsyth said it’s absurd for AHS to consider giving out the bonuses, given the fiscal climate and the fact they’re linked to performance measures that executives have been “failing miserably” on.
The Wildrose party is calling on AHS to end the bonuses immediately.
“The average Albertan doesn’t understand why people would be getting a pay-at-risk bonus or a variable bonus when they’re not even making their performance measures,” Forsyth said.
“Really, let’s show some leadership.”
The criticism comes as the Tory government expects to see a deficit of nearly $2 billion in the coming year and is on track for producing six straight deficit budgets in a row.
The province is also heading into negotiations with nurses and the AUPE, having just agreed to give teachers three years of zero per cent pay increases. It has also laid out demands for doctors to swallow what amounts to a $275-million fee cut this year.
In the March 7 provincial budget, AHS received a lower-than-promised hike to its operating grant, with a three per cent increase rather than the previously promised 4.5 per cent.
Meanwhile, the Calgary Board of Education has been publicly chided by the Redford government this month for approving more than $1 million in pay raises for senior officials and other exempt staff for the 2012-13 year.
On Tuesday, the premier’s spokesman urged the CBE to “consider the environment in which they’re operating.”
Pointing to the recent teachers’ deal, Baranski suggested that for the public education board “to be thinking anything but following that lead (of not giving out raises) is just out of step with the time.”
He said the Tory government has been clear about its expectations for the AHS board and other public organizations, including the CBE.
“We have put (in place) a very clear long-term plan to ensure that government lives within its means. That includes holding the line on salaries right across the public sector,” he said.
With files from Chris Varcoe, Calgary Herald
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