Bonus pay reform excludes TransLink, Ferries officials

New provincial rules aim to rein in executive payments.

BC Ferries CEO David Hahn became B.C.'s poster boy for executive bonus reform in 2009 when his total pay topped $1 million.

A provincial reform limiting bonus payments for Crown corporation executives won’t apply at TransLink or BC Ferries.

The move replaces the current bonus systems at Crown agencies with a hold back of up to 20 per cent of executives’ pay, which is released if targets are met.

The province also announced a pay freeze for current Crown executives and said said new senior executives will be hired at salaries 10 per cent lower than their predecessors.

Incentive pay – publicly unpopular but considered an effective tool in encouraging performance – became a flashpoint in 2009 when it was revealed former Ferries CEO David Hahn’s bonuses and benefits doubled his pay to more than $1 million.

Bonuses to TransLink executives were paid out earlier this year but are under a board-ordered review for future years and are also being examined as part of a provincial audit of the transportation authority.

Neither agencies are technically Crown corporations and are therefore exempt from the provincial rules.

Canadian Taxpayers Federation spokesman Jordan Bateman called it a “poke in the eye” for taxpayers that TransLink and BC Ferries are untouched.

“Those are the organizations most of us are most concerned with,” he said. “You think of David Hahn – the million-dollar man. You think of TransLink giving themselves bonuses the same week they’re raising gas taxes.”

Bateman said the two bodies should have a “moral obligation” to voluntarily mirror the new rules.

As for other Crowns corporations, Bateman said much depends on whether the actual criteria set for holdback bonuses are easy or difficult to meet.

“It’s a positive step forward, but maybe a half step,” he said, noting 99 per cent of BC Hydro employees were able to meet their past targets for incentive pay.

“The idea that every person in the public service should always get a bonus for hitting targets was ridiculous.”

The new policy also says executives should earn no more than 85 per cent of the CEO’s salary.

The province also intends to phase out incentive pay for other non-executive staff, although it admits it can’t do so in cases where such payments have been negotiated into union contracts, as is the case at ICBC.

Travel will be reimbursed using the same policy as government executives and vehicle allowances where required for business will be the only perk allowed, with any others being phased out.

Finance Minister Kevin Falcon said the changes will reduce payouts, cut costs and set an increased tone of restraint.

The holdbacks are similar to the bonus system for cabinet ministers and deputy ministers.

The government review of Crown corporation executive pay and bonuses was announced earlier this year.

Total executive compensation in B.C. fell 5.4 per cent in 2011.

That reflected a paring of senior management ranks, as average compensation per executive was unchanged.

TransLink paid 22 executives $325,000 in incentive pay last year – its CEO can earn up to 20 per cent extra and 15 per cent for other executives.

A previous finance ministry review of TransLink in 2009 recommended keeping the bonus system but giving the Mayors Council final approval of payouts – a change the province never adopted.

Surrey North Delta Leader

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