Canadian plane and train maker Bombardier Inc. cut its former
chief executive's compensation package last year amid efforts to
revamp its corporate structure and address troubles in its
aerospace division.
Pierre Beaudoin, who left the CEO post in February to become
executive chairman, received total compensation of $5.16 million in
2014, down 14% from the $6.01 million he earned in the previous
year, according to the annual management circular the company filed
Tuesday. It cut Mr. Beaudoin's base salary to $1.27 million in 2014
from $1.36 million in 2013, and slashed his annual bonus by over
36% to $590,700.
Other top executives also saw declines in their compensation.
The company cut the bonuses of Chief Financial Officer Pierre
Alary, and the head of Bombardier's transportation unit, Lutz
Bertling. Mr. Alary's total compensation in 2014 fell 15% from
year, while Mr. Bertling's was up slightly, a reflection of his
hiring in June 2013.
The pay cuts came as the Montreal-based company dealt with
development delays for a key product launch, the CSeries, a
jetliner in the 100-seat-plus category meant to compete with
aerospace titans Boeing Co. and Airbus NV.
The CSeries, long championed by Mr. Beaudoin, was originally
scheduled for delivery by late 2013. But the plane has run into a
series of technical glitches and other setbacks, and costs for the
program have mushroomed to $5.4 billion from an original estimate
of $3.4 billion. Flight tests involving the CSeries were halted for
a period in 2014 after problems with the engine.
Last year, Mr. Beaudoin, who is a member of the founding
Bombardier family, implemented a restructuring plan that saw him
take on greater responsibility over aerospace and cull 1,800 jobs
from the company's payroll. But amid continued concerns over cash
flow and the ability of management to execute its strategy, the
company was forced to take further action, including suspending
work on a new Learjet model and shoring up its balance sheet. One
of the biggest changes unfolded in the executive suite, when
Bombardier hired aerospace veteran Alain Bellemare as its new CEO
last month.
According to the circular, Mr. Beaudoin's mandate as executive
chairman includes, among other things, helping to set the corporate
agenda in consultation with Mr. Bellemare, and a responsibility to
ensure the board carries out its duties.
Through the ownership of supervoting Class A shares, the four
surviving children of company founder Joseph-Armand Bombardier
control the company and each are represented on the board. Mr.
Beaudoin's father, Laurent Beaudoin, served as chairman last year
and is now chairman emeritus. The senior Mr. Beaudoin earned $1.78
million as chairman in 2014, with over half originating from a
pension payment he is entitled to due to his years as Bombardier
CEO, the circular said.
Write to Paul Vieira at paul.vieira@wsj.com
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