By Allison Lampert and Leah Schnurr
MONTREAL/OTTAWA Canadian plane and train maker Bombardier (BBDb.TO) tried to contain a public relations debacle on Monday after protests and a dressing down by Prime Minister Justin Trudeau over hefty executive pay hikes just weeks after its latest government loan.Bombardier, which has received more than $1 billion in federal and provincial government aid since 2015, last week awarded its top five executives and board chairman raises of up to 50 percent for 2016.The pay hikes, disclosed in public filings, sparked protests outside Bombardier's Montreal headquarters on Sunday and calls by opposition leaders for a company freeze on executive earnings.Bombardier retreated on Sunday, saying that more than 50 percent of the total planned compensation will be deferred until 2020 and will be payable only if the company achieves performance goals. Executive Chairman Pierre Beaudoin renounced his raise on Friday. "We didn't do a good job of communicating it," Chief Executive Alain Bellemare told a Quebec radio show on Monday. "If you look at it at face value, I can understand why people were so angry, so unhappy."
The compensation packages for the executives and the board chairman included salary, bonuses and stock options.Bombardier, which was forced to consider bankruptcy in 2015 after facing a cash crunch while developing two new planes, received a $1 billion investment from Quebec in its CSeries jets. Last February, it got C$372.5 million in loans from Ottawa.
Speaking in Parliament on Monday, Trudeau spoke critically of the company's planned compensation hikes for its senior executives."We're obviously not pleased with the decision that Bombardier made around its remuneration for its executives," Trudeau said in Parliament. "But we're happy to see them make decisions that are fixing that for Quebecers' and Canadians' confidence." Trudeau had given a more muted response when pressed on the issue last Thursday, saying: “We respect the free market and choices companies will make, but we also have a responsibility to ensure the investments we make with taxpayers’ dollars are leading to good jobs and growth."
While Bombardier's financial situation has improved since 2015, with the company setting a 2018 breakeven target, the company is still burning cash as it ramps up production of its flagship CSeries jet and works to bring a new business jet, the Global 7000, to market."Bombardier is doing a lot better, but they are not out of the woods yet, so they still need the government to be looking at them favourably," said one transportation analyst who spoke on condition of anonymity because he is not authorized to talk to the media. A poll by French-language network Quebecor Media showed that 93 percent of Quebecers opposed the raises, which were made public last week in company filings. (Reporting by Allison Lampert and Leah Schnurr; Editing by Chris Reese and Leslie Adler)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Published Date: Apr 04, 2017 03:00 AM | Updated Date: Apr 04, 2017 03:00 AM