Call me naïve, but I always thought the incentive for doing good work was pretty simple. It’s called a salary.
That’s not enough for the upper echelons at Nalcor, though. They need extra pay to compel them to meet milestones and achieve the Crown corporation’s goals. Regular pay alone just doesn’t do the trick, apparently.
I’m being somewhat facetious here. I’m familiar with the concept of bonus pay being offered to the senior executives of high-powered companies for jobs well done. It’s meant to help keep people with specialized expertise in place in a highly competitive job market. You don’t want to have to constantly worry about your top employees being lured away by your deep-pocketed competition.
But should fat bonus packets be the norm for Crown corporations in good times and bad, or should executive pay for companies working on taxpayers’ behalf reflect fiscal realities?
When Muskrat Falls power comes online, people in this province will see their electricity bills rise. And even if the government establishes some way to mitigate rates or to stagger them somehow, we’ll likely have to pay for that scheme, as well.
We know there are citizens now who can’t afford to heat their homes in winter if they also want to eat and pay for their medication. (And this in a place where some people still have to nudge up the thermostat in July.) We know of others who have moved out of this province because they were not willing to stagger any further under the burden of a high cost of living that’s only going to get higher.
But should fat bonus packets be the norm for Crown corporations in good times and bad, or should executive pay for companies working on taxpayers’ behalf reflect fiscal realities?
Ordinary taxpayers will have to make painful sacrifices to cope with the spectacular blunders of the $12.7-billion Muskrat Falls project. In this province the median family income in 2017 was $79,800 (2.7 people per family), dipping as low as under $20,000 in some single-parent families.
Compare that to the combined $312,600 paid in bonuses alone to five members of the Nalcor executive team last year (albeit $70,000 less than in 2017).
Nalcor spokesperson Deanne Fisher says performance bonuses for executives are standard fare in the utility industry.
Standard fare, perhaps, but it’s too rich for our blood in these lean times.
Perhaps a menu adjustment is in order.
We wouldn’t be the first province to reconsider lavish pay for Crown corporation executives.
In British Columbia in 2012, the government froze compensation for Crown corporation officials and phased out performance bonuses in favour of income holdbacks, where bonuses are blended into salaries and a percentage is withheld until the executive meets certain targets.
The Vancouver Sun reported that then finance minister Kevin Falcon said, “We are in extraordinary times and I think during these extraordinary times the public expects that there will be shared sacrifice.”
The Canadian Taxpayers Federation said of the situation in B.C., that “boards of directors, usually stocked with individuals unknown to the general public, make significant salary and bonus decisions. They do not fear the electorate, so little concern is paid to how much a taxpayer, or ratepayer, can afford.”
Nalcor says it has taken steps to rein in salaries and hopes to do more.
Eliminating performance bonuses in tough times might be a next step.
In May this year, Quebec auditor general Guylaine Leclerc delivered a no-holds-barred report on executive pay for Crown corporation executives.
As the Montreal Gazette reported: “She said she was left with the impression that such corporations — when they were willing to share the information at all — see themselves as kingdoms unto themselves, offering wages as if they were corporations listed on the stock exchange and far removed from the oversight of government. Leclerc said they neglect to recognize the one key difference between them and the private sector: they are monopolies and don’t have to worry about competition.”
At the Muskrat Falls Inquiry in June, Nalcor board of directors chairman Brendan Paddick suggested members of the public stop criticizing Nalcor and “put the jersey on,” getting behind the Crown corporation.
Well, let’s turn that idea on its head. Maybe Nalcor’s top brass should don jerseys and take one for the home team.
Pam Frampton is The Telegram’s managing editor. Email [email protected]. Twitter: pam_frampton
MORE FROM PAM FRAMPTON
