First Three Months’ Work Reaps $C6.4 Million for SNC ChiefFrederic Tomesco
SNC-Lavalin Group Inc., the Canadian engineering company recovering from a corruption scandal, gave Chief Executive Officer Robert Card compensation of C$6.4 million ($6.3 million) for his first three months on the job.
Card, 60, was granted C$5.9 million in stock after he began Oct. 1, the Montreal-based company said today in a filing. He also received C$225,000 in salary, C$41,500 in pension payments and C$56,258 in other benefits, the company said.
Card, the first American-born head in SNC’s 102-year history, was hired amid an investigation that led to fraud charges against former CEO Pierre Duhaime and lawsuits from investors. SNC gained about C$358 million in market value during the last three months of 2012 under the new CEO, and is now about C$6.4 billion.
Vice Chairman Ian Bourne will take over as chairman May 2 when Gwyn Morgan retires and leaves the board, SNC said today in a separate statement. Three other directors will retire and be replaced by Jacques Bougie, the former CEO of aluminum maker Alcan Inc.; Lise Lachapelle, the former CEO of the Forest Products Association of Canada; and Alain Rheaume, the former president of Canadian wireless operator Microcell Telecommunications Inc.
Duhaime was paid a base salary of C$256,045 until his departure in March 2012. He was arrested in November by the Quebec anti-corruption unit and formally charged with fraud, conspiracy to commit fraud and forgery in February. His lawyer pleaded not guilty on his behalf.
SNC’s board suspended severance payments of about C$5 million to the former CEO in December “until the facts surrounding Mr. Duhaime’s situation are clarified or resolved,” the company said today in the filing.
Duhaime, who was named CEO in 2009, spent 23 years with the company. His pension had a value of about C$3.7 million at year-end, SNC said in today’s filing.
Ensuring the company kept its “social license to operate” was among the top priorities for Card, who has appointed senior managers and is considering the sale of infrastructure assets from a toll road to power lines after grouping them in a new unit.
“Investors are particularly focused on strategy regarding concessions, as well as the infrastructure and power segments in engineering and construction,” Sara O’Brien, an analyst at RBC Capital Markets in Toronto, said today in a note to clients. She has a sector perform rating on SNC, the equivalent of a hold.
SNC closed unchanged at C$42 at 4 p.m. in Toronto. SNC has gained 11 percent since Sept. 28, the last trading day before Card took over.