Air Canada corporate compensation

Hey there, time traveller!
This article was published 05/06/2021 (1928 days ago), so information in it may no longer be current.

Is there something in the water over at Air Canada’s headquarters? Can you help me understand why one of the best-known Canadian companies is working so hard to be one of the least-respected?

I’m writing with righteous indignation, of course, about the revelations of Air Canada’s huge bonuses to top staff and management which were paid out at the same time the corporation was negotiating with our Federal Government for a bail-out.

Due to COVID, Air Canada had a terrible 2020. There isn’t an airline in the world that can boast about 2020. Air Canada saw its revenues drop from over $19 billion to under $6 billion. That’s a massive loss of revenue.

As a result, in April the Federal Government announced it had lent the airline approximately $6 billion of taxpayer money to keep it afloat.

The funds consisted of a repayment plan for Air Canada to refund passengers who had their flights cancelled, plus $500 million of equity for the Government, plus a $4 billion dollar loan.

In return, Air Canada had to commit to keeping many of their less-profitable regional routes flying, begin the refunding of flights cancelled during the pandemic, and guarantee that employee pensions, jobs and collective agreements would be maintained.

There were also stipulations including a ceiling of $1 million on executive pay, and restrictions on share repurchases and dividends. Why? Because the feds clearly understood taxpayers would not accept a company receiving bailouts only to then pass along benefits to shareholders and executives.

It’s long been among my favourite axioms that politics consists of both symbols and substance. To be fair, there is not a huge amount of substance here.

In today’s grand scheme of massive deficits and enormous corporate losses, $10 million isn’t a big number. While $10 million represents a life-changing amount of money for folks like you and me, when we are talking about athletes, celebrities and corporate leaders, it really isn’t an enormous amount.

What makes it so grating is that Air Canada was crying poverty and pleading for taxpayer money while distributing these funds to the top ranks. It’s obscene that the CEO and a tiny coterie of his obsequious sycophants would profit while all Canadians funded their party. (To borrow from Seinfeld’s lawyer Jackie Chiles, it is lewd, lascivious, salacious and outrageous.)

Remember back in 2008 when the CEOs of the Big Three automakers all used their own private jets to fly to Washington and beg for taxpayer bailouts? They could have enjoyed a windfall of positive media coverage if they had carpooled in a Chevrolet, but they chose to give taxpayers the one-finger salute.

“There is a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hand, saying that they’re going to be trimming down and streamlining their businesses,” Rep. Gary Ackerman, D-New York said at the time.

Feels like we are getting the one-finger salute right now.

Last year the ailing airline cut its workforce by half, eliminating over 20,000 jobs. The company also received over $650 million from the feds under the Canada Emergency Wage Subsidy program.

Recently retired Air Canada CEO Calvin Rovinescu did okay in 2020, receiving a total compensation package of $9.26 million. While this pay decreased from his compensation in 2019, he still did well considering his company’s revenues dropped by over 60 percent.

To be fair, COVID impacted Air Canada in countless ways that were far beyond its control. It’s not reasonable to expect the corporation wouldn’t be unfairly targeted given its industry and outsize profile. Air Canada, as a result of its near-monopoly position, is an important fixture in the lives of countless Canadians.

It is not surprising that high-ranking corporate leaders would not simply stand by and accept a destruction of their personal finances, for reasons not of their making. This is true of all Canadians.

However, it is galling to all of us that Air Canada’s tone-deaf leadership would be lining their pockets while ordinary hardworking Canadians barely get by.