BC Ferries Changes Executive Compensation

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BC Ferries implements subsequent two-year wage freeze for affected executive and management employees

VICTORIA – BC Ferries’ Board of Directors announced today that the company will be replacing bonuses for all executives and senior managers with a salary holdback plan consistent with government’s guidelines for crown corporation executive compensation.

“Since 2010, when government implemented its Bill 20 amendments to the Coastal Ferry Act restricting executive compensation, BC Ferries has fully complied with the restrictions. In addition, the company has also cut both the number of executives and the total executive compensation paid by more than 50 per cent.” said Donald Hayes, BC Ferries’ Board Chair.

“While the Board strongly believes that the bonus plan for executives and managers has driven significant results in all areas of the company’s performance, we have decided, at the request of the Minister of Transportation and Infrastructure, to replace the plan with a salary holdback plan tied to achievement of financial and business results, similar to crown corporations. As well, once the change to the holdback plan is complete, salaries for affected executives and managers will be frozen until 2016.”

The salary holdbacks will be implemented in two phases. Effective April 1, 2013, the bonus plan for executives is discontinued and a salary holdback will be implemented whereby a portion of the executive’s salary is held back and payable only upon the achievement of stretch targets set by the Board. This approach will apply to senior managers effective April 1, 2014.

Consistent with crown corporations, the salary holdbacks will be applied to a maximum base salary comprised of the executives’ and senior managers’ existing base rate plus the average amount of bonus they have received over the past four years. A portion of salary will be held back and only payable if pre-determined performance objectives are achieved.

Also on April 1, 2014, the bonus plan for all other managers will be discontinued. A holdback plan for this group is not feasible or consistent with the government’s policy. In lieu, salaries will be adjusted based on historical four year bonus plan payments.

President and CEO, Mike Corrigan, will also be subject to the holdback arrangement. However, since his appointment to the position of President and CEO in January 2012, Mr. Corrigan’s compensation has been capped, and he earns less than 60 per cent of his predecessor. His compensation strictly complies with the Coastal Ferry Act, as amended by Bill 20, which requires that his compensation not exceed the remuneration that provincial public sector employers in B.C. provide for similar positions.

Hayes concluded by saying, “The Board is committed to attract and retain a skilled and experienced management team to successfully operate this highly complex marine transportation system, which is one of the largest in the world.”