Canada Pension Also Turns Against Bombardier Chairmanby
Fund witheld votes for Beaudoin reelection, pay proposal
Pension join Caisse, Solidarity, Ontario Teachers, BCIMC
Canada Pension Plan Investment Board has become the latest to come out against the re-election of Bombardier Inc.’s Executive Chairman Pierre Beaudoin and the company’s controversial executive compensation package.
The country’s largest pension fund manager said on its website Wednesday it would withhold its vote for Beaudoin and two other directors as well as the pay package. Ontario Teachers’ Pension Plan and the British Columbia Investment Management Corp. also said they withheld their votes for the re-election of Beaudoin -- a member of the family that controls Bombardier -- and the pay package, according to their websites.
“Our assessment of recent events confirms the need for independent board leadership,” Ontario Teachers’ said in a statement Tuesday. “We typically do not support boards installing an individual in the role of executive chair.”
Toronto-based Ontario Teachers’ said it was voting against the executive compensation package because the company failed to adequately explain the linkage between its targets and pay.
"The resulting linkage between pay and performance is not sufficiently justified," Ontario Teachers’ said.
BCIMC not only withheld its vote for Beaudoin but eight other directors as well, including Pierre’s father Laurent Beaudoin, for various reasons including a lack of independence, attendance at meetings or other issues, it said on its website. It also voted against the executive pay package, saying it believed there was little correlation between pay and performance. BCIMC owned roughly 7 million shares in the company as of March 31, 2016, the most recent holdings it has reported.
The funds join the Caisse de Depot et Placement du Quebec and Solidarity Fund QFL, which is backed by a labor union, that also withdrew support for Beaudoin and the compensation plan.
The pay proposal fueled outrage after Bombardier increased executive pay almost 50 percent despite receiving taxpayer aid and announcing plans to cut more than 14,000 jobs. The Montreal-based maker of planes and trains later reduced Beaudoin’s pay and delayed some remuneration for leaders including Chief Executive Officer Alain Bellemare.
While expressing “full support and confidence’’ in Bellemare and his team as they attempt to turn the company around, the Caisse in a letter to Bombardier on Monday said better governance is required to make the plan successful.
While Beaudoin’s family holds a controlling stake that makes the plan likely to pass anyway, the letter put the company back in the spotlight weeks after the public outcry that forced Bombardier to downsize the pay package. Shareholders will vote on the plan at the annual meeting on May 11.