Aggregate compensation of 21 million | Business is good for Bombardier, its bosses are benefiting

The enthusiasm for business jets, which enabled Bombardier to accelerate its recovery, was also reflected in the overall pay of the Quebec aircraft manufacturer’s senior executives, which totaled nearly $21 million (17.3 million US), last year.

Julien Arsenault
The Press

Cash bonuses alone for the multinational’s top five executives totaled $7.2 million in 2021 – the year the company continued to benefit from the Canada Emergency Wage Subsidy (CEWS), a program foot through Ottawa to help businesses affected by the health crisis.

“Bombardier’s strong performance for the year resulted in higher-than-target short-term incentive payouts,” the company writes in the proxy statement sent to shareholders ahead of its annual meeting scheduled for May 5.

The emoluments of the bosses of the multinational take into account many elements, such as the base salary, the cash bonuses as well as the attributions based on options, in particular.

At first glance, the emoluments of the bosses of Bombardier seem to have doubled compared to 2020. However, the president and chief executive officer Éric Martel, who took office on April 6, 2020, and the chief financial officer Bart Demosky , hired on 1^er December of the same year, were not remunerated for a full financial year. This skews the data.

Last year, Mr. Martel was entitled to cash bonuses of about $2.5 million.

” The [comité de rémunération] did not consider the impact of grants received under the CEWS program,” the circular argues.

According to its annual report for the fiscal year ending December 31, Bombardier received US$143 million in wage subsidies in Canada and other places in the world where it was eligible for this type of financial assistance.

The company is far from the only one to have paid cash bonuses to its executives after having benefited from the CEWS, underlines Yan Cimon, of the management department of Laval University. In terms of public perception, it’s not “ideal” to do so, according to the professor.

“It’s clear that this strikes a chord,” says Mr. Cimon. But at the same time, if these bonuses make it possible to retain talented executives, it is important for the creation of long-term value. »

Exceeded expectations

The company considered two main factors to assess the performance of its senior management: adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and free cash flow.

Bombardier performed well on both counts. Its EBITDA more than tripled to US640 million last year, while the company generated cash of US100 million. In 2020, Bombardier had drawn 1.9 billion US dollars from its reserves.

The aircraft manufacturer nevertheless ended the 2021 financial year with an adjusted loss of 326 million US dollars, or 15 US cents per share. Revenue fell 6% to $6.1 billion.

The details surrounding the compensation of the company’s executives are revealed as negotiations seem tense with some 1,800 Quebec employees represented by the International Association of Machinists and Aerospace Workers (IAMAW).

According to the union, the employer is refusing all the workers’ wage demands and would demand “significant rollbacks” of “several million”, according to a bulletin that The Press was able to consult.

On Wednesday, Mr. Martel had estimated that the exit from the IAMAW was premature, since Bombardier had not yet presented its offers. The 1,800 employees without a contract since December 4 are divided between the Challenger assembly plant in Dorval and the Montreal plant located in the borough of Saint-Laurent.

Last July, operations at the Downsview plant in Toronto were disrupted by a walkout lasting a few days. Bombardier had reached an agreement with Unifor, which represented about 1,200 employees who assemble the Global family of aircraft.

As part of its annual meeting, Bombardier will propose to its shareholders to vote in favor of a resolution to proceed with a consolidation of Class B common shares at a ratio between ten to one and thirty to one.

According to the aircraft manufacturer, the objective is to “reduce the number of common shares of Bombardier outstanding to a level comparable to that of companies with a similar market value and whose shares are traded” on the Toronto Stock Exchange.

The market value of the company hovers around 3.5 billion.