Province approves executive pay-range hikes at Metrolinx and OPG

Province approves executive pay-range hikes at Metrolinx and OPG

Meet the new boss, better paid than the old boss.

After a consultation period and some sticker shock, the Ontario government has approved new and more lucrative salary ranges for the next CEO and other executives at Metrolinx, the Greater Toronto and Hamilton Area transit agency, as well as at Ontario Power Generation, the provincially owned electricity company.

At OPG, the new cap on executive pay is set at $3.8 million for the CEO, but the company says the actual compensation will be held at $1.9375 million, including a performance bonus, which the company calls “pay-at-risk.” A similar “internal” cap on compensation exists for other C-suite execs, such as the chief nuclear officer, whose new “market based” salary ceiling is $3.64 million.

“The cap on CEO compensation (base, plus pay-at-risk) developed under the regulation remains at $3.8M,” said OPG spokesperson Neal Kelly in an email. “That means that half the market has maximum compensation for their CEOs above this value. OPG’s internal operating caps on compensation (including pay-at-risk) for all executive positions are kept below the caps developed under the regulation.”

OPG president and CEO Jeff Lyash earned total compensation of just over $2 million in 2016, made up of $775,000 in salary, $755,459 from the performance bonus, $460,000 in pension money and $38,138 worth of “other pay.” The chief nuclear officer, Glenn Jager, earned a total of $1,132,381.

A spokesperson for Energy Minister Glenn Thibeault said OPG’s executive compensation program is “compliant” with the government’s new regulations. “While the Program is effective as of January 1, 2017, we are monitoring OPG’s implementation very closely,” added Colin Nekolaichuk in an email.

The new and approved framework at Metrolinx will allow the next chief executive officer of Metrolinx to earn a minimum of $375,300 to a maximum of $479,500. Bruce McCuaig, who recently departed as president and CEO of Metrolinx, was paid $367,197.85 last year, according to the province’s Sunshine List.

“The Metrolinx executive compensation framework has been approved and will be utilized as Metrolinx moves forward in their search to fill this important role,” said Kari Cuss, director of communications for Transportation Minister Steven Del Duca, in an email. "To reiterate, the framework is a range from $375,300 to $479,500."

The Liberal government has appointed John Jensen, Metrolinx's chief capital officer, as interim CEO for up to nine months. The term could be shortened if a new CEO is found and appointed before the nine months are up. Jensen will be paid $37,500 a month, or $450,000 a year, according to an order in council.

“Under the new executive compensation framework that was approved by the board and Minister, the salary range for the incoming CEO will be between $375,300 to $479,500,” said Metrolinx spokesperson Anne Marie Aikins in an email. “The Metrolinx Board would be negotiating with the new incoming CEO on an appropriate salary within this approved range.”

The new pay outline is part of the Liberal government’s gradual unthawing of wages in the province’s broader public sector, as executives at colleges, universities, hospitals and agencies like Metrolinx have had their salary ranges frozen since 2012. The agencies are required to post their compensation programs to their websites for feedback, which caused a stir earlier this year when colleges, Metrolinx and Ontario Power Generation unveiled their plans.

Deputy Premier and Advanced Education Minister Deb Matthews ordered some of those colleges to go back to the drawing board with their proposed executive pay packages.

"Colleges and universities are continuing to work on their draft frameworks, and we look forward to reviewing their submissions," said Jasmine Irwin, a spokesperson for Matthews, in an email. "Our expectation is that college and university executive compensation programs will focus on comparison to other Canadian post-secondary institutions or other organizations of similar size and complexity."

To craft their proposed compensation packages, the broader public sector agencies are supposed to compare their execs' salaries to those of similar-sized public institutions (OPG is also allowed to use private-sector comparisons, as there are not many other public agencies that run nuclear power plants in Canada). The government has said the pay hikes are needed to attract talent, but when the new draft compensation programs were revealed, the Liberals had to read the riot act to the public-sector employers, telling them they would refuse salary increases if pay packages became “unreasonably high.” This would leave the salary freeze on at the rejected agencies.

Under the new executive pay framework, certain perks, such as signing bonuses, are no longer allowed as well.

To contact the reporter on this story:
Twitter: @geoffzochodne

Geoff Zochodne

Geoff Zochodne joined QP Briefing in 2014 after working as a reporter, photographer and editorial writer for The Oshawa Express weekly newspaper. He is a graduate of Saint Mary’s University in Halifax. To contact Geoff: 905-926-8026 Twitter: @geoffzochodne

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