We’ve reopened the floodgates!
The pause in growth in executive compensation that had manifested itself during the three years of the pandemic is well and truly over.
In fact, the growth of multi-millionaire compensation has resumed with renewed vigor as the economy quickly recovers, stock markets recover, and high inflation inflates corporate revenue and profit numbers.
In Quebec alone, shows the annual survey carried out by La Presse, a dozen companies with a stock market value of more than $500 million have increased the value of total compensation (salaries, bonuses and other benefits) by more than 20%. ) granted to their senior executives for the 2022 financial year.
A special case ?
At Air Canada, the value of compensation for the top five executives nearly tripled (181%) to $23.14 million.
While Air Canada’s accounting results rebounded strongly with the post-pandemic recovery (revenue rebounded 158% to $16.5 billion, net loss halved to $1.7 billion), it is the end of restrictions on the Canadian government’s financial assistance to airlines during the pandemic which caused a considerable rebound in the compensation of its five most senior executives, which had been cut by nearly 55% the previous year.
At the same time, nearly fifteen presidents of these largest companies headquartered in Quebec and listed on the stock exchange benefited from an increase of more than 20% in their total compensation in fiscal 2022.
Among them, four presidents benefited from a more than 100% increase in their remuneration compared to the previous year in 2021.
Special cases?
At Lightspeed Commerce, a specialist in e-commerce management systems, compensation for CEO Jean-Paul Chauvet increased 19 times (1803%) to $27.6 million, following an exchange of functions with his colleague Dax Dasilva, now chairman and director of the board of directors.
At Air Canada, President and CEO Michael Rousseau is proving to be the main beneficiary of the considerable rebound in executive compensation. At 12.37 million, his total compensation for fiscal year 2022 more than tripled (233%) year-on-year; earning him a place in the top 15 highest paid presidents of Quebec Inc. in stock exchange.
“Obviously, the rapid economic upturn that we experienced in the wake of the pandemic has put an end to the restraint that seemed to prevail among senior corporate management with their compensation during this period of great socio-economic anxiety, notes François Dauphin, CEO of the Institute for Governance of Private and Public Organizations (IGOPP).
“However, in an economic context where the general public must deal with budgetary difficulties linked to high inflation and the sharp rise in interest rates, such a rebound in the compensation of senior executives generates a higher level of indignation in public opinion and in the political world”, notes Mr. Dauphin during a discussion with La Presse.
At Toronto-based SHARE (Shareholder Association for Research and Education), Anthony Schein, director of shareholder advocacy, finds that the strong rebound in executive compensation is also increasing “the level of disconnect” with average executive compensation. employees.
That said, corporate governance analysts point to “encouraging trends” in the management of executive compensation policies.
For example, large institutional investors and the asset managers of large pension funds continue to step up their interventions in companies when they see problems in their executive compensation policy.
At the same time, reports François Dauphin of IGOPP, there is a “slow decrease” in the still high percentages of general approval of the compensation policy for senior executives, during advisory votes at shareholder meetings.
“This trend is becoming increasingly disturbing for corporate boards and senior executives. It can even create a risk of reputational damage for the company, especially among its customers and employees. »
In addition, corporate governance analysts pay particular attention to the introduction of “ESG” type criteria (environment, society, governance) among the objectives and performance measures of executive compensation policies.
Among other things, we are expecting the first statement of ESG financial accounting standards from the international organization ISSB (International Sustainable Standard Board) in the coming months.
“The upcoming arrival of these ISSB accounting standards should facilitate the quantification of ESG objectives and results, which could clarify their integration into the compensation policies of senior executives”, predicts Michel Magnan, professor- researcher in accounting and governance at Concordia University’s Molson School of Management.
Mr. Magnan is also co-author of a study published these days which also notes the difficulties of including ESG objectives that are still too little quantified in the compensation policies of senior executives.
“For example, compensation policies are largely based on short-term performance goals and metrics, while ESG-related goals are more mid- to long-term focused,” Magnan explains during an interview with La Presse.
In addition, we follow the evolution in the United States of the recent standards of the Securities Exchange Commission (SEC) concerning the quantitative information in the compensation policies of senior executives.
Among other things, publicly traded US companies must publish a multiple of the total compensation of their top executive compared to the average compensation of their employees.
Also, American companies must now differentiate the amount of compensation actually paid during the year from the amount of total compensation. The latter includes, in particular, bonuses in equity securities, the receipt and value of which are conditional on the achievement of future results, and which may therefore never be paid.
“For the moment, the effect of these SEC standards on the evolution of compensation policies for senior executives is not very conclusive compared to expectations,” said François Dauphin of IGOPP.
“So I expect a one to two year period of ‘watchdog’ in this regard among corporate governance stakeholders in Canada. In the meantime, their priority remains the integration of ESG criteria and diversity standards among senior management and corporate boards in Canada. »
President of Nuvei
28,35 millions
– 12 %
CEO of Lightspeed Commerce
27,6 millions
1803 %
Chairman of the Board and CEO of Nuvei
20,9 millions
– 85%
New CEO of Bausch Health
17,12 millions
34 %
Executive Chairman of the Board of CGI
13,8 millions
26 %
How has the compensation of senior executives of the main companies of Quebec Inc. changed? on the stock market for a year? Highlights from the annual compilation made by La Presse.
Nearly fifteen presidents of Québec inc. companies received more than a 20% increase in their total compensation (salaries, bonuses and other benefits) in fiscal year 2022. And among them, four presidents received an increase of more than 100% the value of their total compensation compared to the previous financial year in 2021.
This year’s record goes to Jean-Paul Chauvet, CEO of e-commerce management systems company Lightspeed Commerce. The value of his total compensation, which is comprised mostly of stock bonuses and future stock options, increased 19 times to $27.6 million. This significant bonus was granted to Mr. Chauvet for his appointment as CEO, replacing Dax Dasilva, now Chairman and CEO of Lightspeed Commerce.
CEO of Lightspeed Commerce
E-commerce management systems
27,6 millions
( 1803% or 19 times)
548 millions US
(147% YoY)
26,9 millions US
(loss of US$5.8 million in 2021)
President and CEO of Bellus Health
Drug development
7,65 millions
(243% YoY)
US$16,000 (unchanged)
76 millions US
(loss of US$71.4 million in 2021)
President and CEO of Air Canada
National and international air carrier
12,37 millions
(233% YoY)
16.5 billion
(158% YoY)
1.7 billion
(loss of 3.9 billion in 2021)
President and Founder of Lion Electric
Development and construction of electric trucks and buses
1,85 million
(150% over one year)
139,9 millions US
(142% YoY)
17,7 millions US
(loss of 43.3 million in 2021)
President and CEO of CAE
Aviation and healthcare training technologies and services
10,59 millions
(43% YoY)
3.37 billion
(13% YoY)
150 millions
(loss of 47.5 million in 2021
A dozen companies from Quebec inc. companies increased the total compensation value of their senior executives by more than 20% in fiscal year 2022. Of these, two companies stand out with spectacular increases of three to four times this total compensation value .
E-commerce management systems
86,81 millions CAN ( 294 %)
US$548 million (147% YoY)
26,9 millions US
(loss of US$5.8 million in 2021)
National and international air carrier
23.14 million (181% YoY)
16.5 billion (158%, pandemic stimulus)
1.7 billion
(loss of 3.9 billion in 2021)
Drug development
10.37 million (85% Y/Y)
US$16,000 (unchanged)
76 millions US
(loss of US$71.4 million in 2021)
Development and production of pharmaceutical products
79.75 million (39% YoY)
8.1 billion (-3.7% year-on-year)
212 millions US
(loss of 937 million US in 2021)
Continental Rail Carrier
39.44 million (39% YoY)
17.1 billion (18% year-on-year)
5.1 billion
(4% over one year)
