Air Canada says executives voluntarily return 2020 bonuses

MONTREAL-Air Canada stated that its senior executives have chosen to return 2020 bonuses in response to “public disappointment.”

The airline said in a press release The President and CEO of Air Canada and the Executive Vice President have voluntarily returned bonuses and shared appreciation units.

Former President and CEO Calin Rovinescu, who retired in February 2021, stated that he will also donate his shares to the Canadian Aviation Foundation.

The statement does not include mid-level managers whose bonuses amounted to more than US$8 million in the US$10 million bonus plan.

On Wednesday, Treasury Secretary Chrystia Freeland said she was dissatisfied with the multimillion-dollar package to the airline executives when the company negotiated a federal rescue plan, saying the bonuses were “inappropriate. “.

The airline disclosed its annual agency notice to shareholders last Monday, which provided bonuses to investors. The document stated that the document played an important role in the survival of the airline in the past year due to the COVID-19 pandemic. Air travel plummeted during this period.

The statement on Sunday said: “Air Canada’s leadership team is fully focused on Air Canada’s recovery from the COVID-19 pandemic and is ready to welcome back colleagues and traveling customers as soon as possible.”

“The airline looks forward to continuing to work with all stakeholders, especially the Canadian government, in many aspects, including the safe restart of our industry.”

In April, the airline and the government agreed to a US$5.9 billion loan program, which includes funds to help refund tickets, but within 12 months of the full repayment of the loan, executive compensation is capped at US$1 million.

The government also spent 500 million Canadian dollars to buy a 6% stake in the country’s largest airline. Freeland said that this was done to ensure that once normal travel resumes, Air Canada’s revenue increases and taxpayers can benefit from it.

At the beginning of 2020, senior managers and 3,200 managers voluntarily agreed to reduce a total of $11.5 million in base salary, but they must be compensated by stock appreciation units. If the stock price rises in December 2022, employees may be allowed to recover part of their forgone wages. The company Said that it will exceed December 2020.

Freeland and Transport Minister Omar Alghabra stated that Canadians “expect responsible corporate behavior by companies that receive financial support from the government during the pandemic, especially when it comes to executive compensation. correct.”

They stated in their joint statement on Sunday night: “Although Air Canada could have avoided this completely, we acknowledge that the top five executives took this step in the right direction to repay the 2020 bonuses they received. And share appreciation units.”

The Canadian Press report was first published on June 6, 2021.

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