Nov 18

Bombardier chairman’s pay cut not enough to save company’s image, PR expert says

Bombardier continued to face criticism Sunday for a dramatic increase in compensation to its senior executives last year and a public relations expert said the company’s efforts at damage control so far won’t be enough to make the issue go away.


If the aerospace company hopes to quell the negative publicity it has received, it should follow up on the announcement that board chairman Pierre Beaudoin would scale his compensation back to 2015 levels, said Marjorie Wallens of MJW Communications.

“Beaudoin’s pay cut is a step in the right direction, but the rest of the top executives should follow his lead,” she said.

READ MORE: Bombardier CEO asks directors to hike back his pay amid a public outcry

Public outrage has mounted since it was revealed last week that Bombardier provided a nearly 50 per cent increase in compensation to Beaudoin and five executives in 2016 compared to the previous year while it received hundreds of millions of dollars in government subsidies and laid off thousands of employees worldwide.

In 2016, Bombardier(TSX:BBD.B) received a US$1 billion investment from the Quebec government in exchange for a 49.5 per cent stake, and in February, the federal government pledged $372.5 million in repayable loans to the company – a far cry from the US$1 billion it had been asking Ottawa for since 2015.

Compensation for Beaudoin and the Montreal-based manufacturer’s top five executives was US$32.6 million in 2016, up from US$21.9 million the year before.

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The head of Bombardier’s human resources and compensation committee issued an open letter Saturday explaining the company’s compensation policies and called it “inappropriate” to compare the 2016 compensation to that of the previous year because some of the executives did not start at the beginning of 2015.

Bombardier’s public relations and human resources teams were in a no-win situation in defending the salary increases, Wallens said in an interview Sunday.

“They’re asked to defend something, which from the public’s point of view, is indefensible,” she said. “The only thing they can say is that they want to stay competitive internationally.”

Bombardier’s damage control efforts over the weekend appeared to do little to calm the waters.

A crowd of about 200 people descended on the company’s Montreal headquarters on Sunday, chanting in French “shame to Bombardier!”

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Jessica Lacombe, a teacher, carried a sign that read “I’m still waiting for my invitation to Bombardier’s shareholders’ meeting.”

She said the company’s actions are especially hard to take after years of government austerity that have included cutbacks to health and education.

“If it’s private money they can do what they want, but now it’s public money,” she said. “It’s our taxes, it’s our money.”

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Bombardier has refused to say if the other executives would follow Beaudoin’s lead but the opposition Parti Quebecois is poised to try to force the company’s hand.

The PQ says it intends to present a motion in Quebec’s legislature this week calling on all of Bombardier’s executives to renounce their 2016 compensation increase.