Bombardier outcry highlights challenges of executive compensation

‘This is every director’s worst nightmare’
By Marcel Vander Wier
|Canadian HR Reporter|Last Updated: 05/02/2017
Alain Bellemare
Alain Bellemare, CEO of Bombardier, in Mirabel, Que., in November. Credit: Christinne Muschii (Reuters)

Canadian aerospace and transportation giant Bombardier officially delayed a portion of its executive compensation in April, following two weeks of public outrage.

The outcry came after a pay hike for Bombardier’s top six executives, on the heels of a US$1-billion bailout in 2016 — courtesy of the Quebec government in exchange for a 49.5 per cent stake in the company — and an additional $372.5 million loan from the federal government in February. The money was intended to uplift the company’s struggling CSeries and Global 7000 aircraft programs.

Public relations foible aside, providing the controversial bonuses was a necessary play for Bombardier, according to Jeffrey Gandz, professor emeritus at Western University’s Ivey Business School in London, Ont.