Caisse withholds vote for re-election of Bombardier executive chair

The Caisse de dépôt et placement du Québec says it is withholding its support for the re-election of the executive chairman of the board of Bombardier Inc. and is not backing a company proposal on executive compensation.

The massive Quebec investment fund said in a letter to Bombardier dated Monday and posted on its website that it abstained from voting in favour of Pierre Beaudoin, who has been executive chairman at Bombardier since February 2015.

The Caisse also said it opposed a non-binding advisory vote on Bombardier's approach to the way it pays its executives. 

• Bombardier board approves changes to executive compensation after outcry

Bombardier's board had urged shareholders to back the so-called "say on pay" resolution. While the vote is non-binding, the company said its human resources would take the results of the vote into account on future executive compensation.

The position of the Caisse, which owns millions of Bombardier's class A and class B shares, plus a 30 per cent share in Bombardier's rail operations, stems from the storm of recent criticism directed at the company over its decision to grant big raises to some of its executives even as it was getting financial backing from the governments of Canada and Quebec.

The compensation of the company's top five executives and its board chairman was $32.6 million US in 2016, up from $21.9 million US in 2015, the company revealed in a proxy circular in late March.

However, amid the outcry that swiftly followed that news, Beaudoin said he asked for his compensation to be reset back to 2015 levels. 

• After public outcry, Bombardier chair Pierre Beaudoin says he'll cut his pay back to 2015 level
• Bombardier CEO says executive bonuses deferred until 2020

On April 10, Bombardier's board approved a request from CEO Alain Bellemare to delay payment of more than half of last year's total planned compensation for six executive officers, including himself, by one year to 2020, provided the company meets certain targets.

In its letter, the Caisse said the recent decisions of Bombardier's board "fall short of the necessary standard of stewardship," adding that the delay in payments to the Bombardier executives was necessary.

"Our concern is that the initial decisions were made in the first place and what that reflects about the governance of the company," the fund said. This is especially true for the compensation that the board plans to pay the executive chair."

"Given this lapse of governance, we have voted against the advisory resolution on compensation," said the Caisse.

Despite the criticism it directed against Bombardier's board, the Caisse said CEO Bellemare and his management team have its "full support and confidence."

"They are executing a challenging business plans with discipline and determination," the fund said.

Bombardier's annual meeting is to take place Thursday in Dorval, Que.