Executive comp for B.C.'s public sector lower in 2011-12

New policy adds further restraints
|hrreporter.com|Last Updated: 08/13/2012

Total executive compensation for the public sector in British Columbia in 2011-12 was 5.4 per cent lower than in 2010-11, according to the provincial government, which has also established a new policy on executive compensation in Crown corporations, aiming to attract and retain skilled leadership at an affordable cost to taxpayers and ratepayers.

Average compensation per executive was flat while the total amount paid in bonuses dropped 13 per cent and both the number of executives receiving bonuses and the average amount earned also fell.

About 35 per cent of senior Crown corporation executives are eligible for bonuses, primarily in the larger commercial corporations, down from 37 per cent in 2009-10, said the government.

A review of Crown corporation management staffing and compensation found that between 2009 and 2011, management staffing in government fell by seven per cent and compensation costs fell by one per cent, while management staffing in Crown corporations increased by seven per cent and compensation costs increased 16 per cent.

The review determined that while executive compensation in most Crown corporations is appropriate or being reformed, new measures can be established, particularly for the larger commercial Crown corporations, to restrain and further reduce overall executive compensation.

The policy includes the following:

•Compensation of all Crown corporation executives will be immediately frozen.

•Bonuses will be phased out and replaced with a non-pensionable holdback of up to 20 per cent tied to financial and business results.

•New senior executives will be recruited at a salary 10 per cent less than the incumbent.

•Executives should earn no more than 85 per cent of the CEO salary.

•Incentive pay will be phased out for new non-executive staff, except where established through collective bargaining.

Crown executives are restricted to the same travel expense reimbursement policy as government executives.

A vehicle allowance where required for business will be the only permissible perquisite — any other perquisites now in place will be phased out.

Many Crown corporations already meet some or most of these policies but if not, boards must provide plans by Jan. 1, 2013, showing how they will align, said the government.

Annual disclosure of public sector executive compensation in B.C. applies to CEOs and the next four highest ranking or highest paid executives for positions with an annual base salary of $125,000 or more. In disclosure statements, each organization also provides an explanation of its compensation philosophy, the objectives of the compensation plan, what bonuses, incentives or holdbacks are paid, and how they relate to the organization’s overall performance targets.

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