Pierre Beaudoin, executive chairman of Bombardier Inc., Montreal, plans to step down as of June 30 but will remain on the company's board despite opposition from some large institutional investors.
At Thursday's Bombardier shareholders meeting, Mr. Beaudoin, who will continue to serve as non-executive chairman, was re-elected to the board with 92% of shareholders voting in favor. The board as of early Thursday afternoon had not yet formally approved Mr. Beaudoin's offer.
Mr. Beaudoin faced pressure from shareholders, including the C$287.3 billion ($210.3 billion) Canada Pension Plan Investment Board, Toronto; $202.8 billion California State Teachers' Retirement System, West Sacramento; C$270.7 billion Caisse de Depot et Placement du Quebec, Montreal; and C$175.6 billion Ontario Teachers' Pension Plan, Toronto. All had said this week that they would withhold their votes for Mr. Beaudoin.
The $318.9 billion California Public Employees' Retirement System, Sacramento; $189.4 billion Florida State Board of Administration, Tallahassee; and $133.2 billion Texas Teacher Retirement System, Austin, had said they would endorse Mr. Beaudoin's re-election.
In a statement in Bombardier's first-quarter results released early Thursday, Mr. Beaudoin said his offered resignation “reflects the very successful transition of Bombardier's executive leadership” to Alain Bellemare, Bombardier's president and CEO, over the past two years.
Mr. Beaudoin's announcement came amid a broader concern among some institutional shareholders over Bombardier's executive compensation. CalPERS, CalSTRS, Ontario Teachers, Caisse, FSBA and CPPIB all planned to vote against the company's executive compensation approach, according to their proxy-voting disclosures. However, based on preliminary vote totals, the executive compensation package was endorsed by 93% of shareholders.
Ontario Teachers had said it found Bombardier's disclosure on its compensation decisions in the company's proxy statement “insufficient to determine the strength of the linkage between pay and performance.”
Additionally, Kim Thomassin, Caisse's executive vice president, legal affairs and secretariat, wrote Monday in a letter to Daniel Desjardins, Bombardier's senior vice president, general counsel and corporate secretary, that despite recent adjustments to executive compensation, concerns persist over why the initial decisions were made.
Following public debate on Bombardier's executive compensation practices, Mr. Beaudoin requested in March that his total planned compensation for 2016 be reduced by $1.4 million to its 2015 level of $3.8 million. Additionally, in April, Mr. Bellemare requested that more than 50% of the total planned 2016 compensation for himself, Mr. Beaudoin and four other executives be deferred until 2020 and paid out only “if the company achieves performance goals that position it for long-term success, in line with the company's strategic plan,” Mr. Bellemare said in a statement.
The total planned compensation for Mr. Bellemare was $9.5 million in 2016, up from $6.4 million in 2015, according to the company's proxy statement. The total compensation for the four other executives ranged from $4 million to $4.7 million in 2016, up from a range of $2.4 million to $3.3 million in 2015.
“Improving Bombardier's standard of stewardship goes far beyond the immediate issues of compensation. … As one step in enabling the board to play this critically important role, and hence, to move toward substantively better governance, in our view, Bombardier's board should be chaired by a fully independent director,” Ms. Thomassin wrote to Mr. Desjardins. Caisse manages assets of Quebec's public provincial and municipal pension funds.