Harper Won't Cancel Huge CPP Executive Bonuses
Jun 02, 2009
bonus, executive, fraser, minister, plan, prime
Despite a loss of $23.7 billion last year, Prime Minister Stephen Harper has ruled out cancelling a whopping $7 million in bonuses to the top four executives at the Canada Pension Plan Investment Board (CPPIB).
The CPP Investment Board became a Crown corporation in 1997. It operates independently of government and is responsible for investing billions of dollars in CPP contributions to fund public pensions for millions of Canadians.
According to the fund’s annual report just released by the CPP Investment Board, the fund lost $23.7 billion for the last fiscal year. Despite this loss, David Denison, the president and CEO of the CPPIB, along with his top four executives, will take home a total $8.5 million in pay and bonuses for the last fiscal year. Additionally, the executives are due another $7 million in long-term awards that will be paid out over the next three fiscal years.
National Union of Public and General Employees (NUPGE) president James Clancy has expressed outrage over the huge bonuses being paid to these executives, particularly when the fund has lost billions of dollars.
“Our economy is in a serious recession, thousands of Canadians are losing their jobs every day, lineups at food banks are soaring, and at the same time these guys are giving themselves million dollar bonuses. I mean, give me a break. What are they thinking?” said Clancy.
Both Harper and Finance Minister Jim Flaherty have stated publically that the federal government would not get involved in the operations of the CPPIB, which was set up as an arm’s length manager to be free of political influence.
The fund’s board of directors did decide not to award the “personal performance” portion of their annual bonuses to the executives in question. This resulted in their receiving a collective compensation reduction of 31 percent over last year. But when we’re talking millions of dollars, is this really a significant amount? Why should these executives who made bad investment decisions that led to losses of an unprecedented scale receive any bonuses at all?
The government can – and should – take action. They should pursue whatever means possible to prevent these bonuses from being paid out. As Clancy points out, they “should also use their public offices to express outrage on behalf of Canadians and let these executives know that their actions violate fundamental Canadian values such as fairness.” And the executives themselves, as a sign of moral integrity and leadership, could return the bonuses.
But of course, none of the above are likely to happen. Executives that make million dollar salaries and make lousy investment decisions that cost Canadian taxpayers billions of dollars annually will remain immune to the economic realities that the other 99 percent of Canadians face.
Comments
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Disgusting. Thank you for posting this. Their bonuses should be tied to profits. Sadly , most company CEO's make huge bonuses, even when they lose money or break the company. It is just wrong.
Jim Cotton - 2009-06-05 17:56
when will the insanity stop. I am tired of the government using my hard earned tax dollars carelessly.
Norma Holmes - 2009-06-05 22:45
Norma, so what do you suggest we do ? I voted Conservative last time thinking they would be good stewards of my tax dollars....boy was I wrong. We know the NDP and Liberals are the same, all parties are careless with tax dollars. Maybe we should stop voting and paying taxes.
Jim Cotton - 2009-06-07 22:09