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Consumer Advocate Dennis Browne says it’s “tone deaf” to award Nalcor Energy executives major bonuses with an unfinished, debt-burdened Muskrat Falls project weighing down Newfoundland and Labrador.
The 2019 compensation disclosure from the provincial government revealed a total of $2.9 million in bonuses to Nalcor executives, including a $315,000 bonus for CEO Stan Marshall.
“It’s difficult for people to comprehend that this amount of money can be paid to any one individual, given the times in which we are living, with the pandemic, the collapse in the economic opportunities in the province right now, the cash-strapped government that we have, which results in no small part (from) the Muskrat Falls project,” said Browne.
“It is difficult for people to comprehend that large amounts of money should be paid to Nalcor executives. There’s a certain tone deafness there which is troubling.”
The large payment for Marshall comes from two different programs as part of Marshall’s contract. One is a short-term incentive, based on 30 per cent of Marshall’s base salary as CEO of the Crown corporation. Marshall’s base salary is $525,000, meaning the short-term incentive is worth $157,500.
In a statement, Nalcor said the other half of the $315,000 payment comes in lieu of a pension.
“In lieu of pension, Mr. Marshall participates in the executive deferred compensation plan. Mr. Marshall's employment contract provides for compensation of 30 per cent of his annual base salary, for each year of service with the company,” reads the statement.
“He was only eligible to receive this incentive payment after three years of service with Nalcor. The first LTI payment was due to Mr. Marshall on April 21, 2019, for $157,500 in accordance with his employment contract.”
Browne says the board of directors of Nalcor Energy, chaired by Brenden Paddick, should have stopped the bonuses altogether.
“Government has to intervene if the board of directors will not. The people of the province see no justification for bonuses of this magnitude. The entitlement shows an insensitivity to what has transpired here. We have, effectively, Muskrat Falls is a failed project. It’s proven uneconomic. It's going to saddle us with debt for the foreseeable future. The project team which is leading it should take responsibility here,” said Browne.
“It seems the board of directors would have every right to cancel bonuses.”
In media interviews, cabinet minister Andrew Parsons has expressed his displeasure with the bonuses, vowing to halt them in future years.
Progressive Conservative Leader Ches Crosbie says if the government wanted to stop the bonuses for Nalcor Energy executives, it could have done so long ago.
“Nalcor is a Crown corporation which reports to the government. If the Liberals were sincerely concerned about these bonus payouts, they could have put a stop to them as soon as they were elected in 2015,” Crosbie said in a statement.
“Simply put, the Liberals have allowed bonuses to be collected, they have allowed this practice to continue.”
New Democratic Party Leader Alison Coffin says the bonuses are not deserved.
“There are no synchronous condensers, but someone got a $315,000 bonus. That will get you six jobs at $50,000” said Coffin.
“We still haven’t sorted out rate mitigation. Do you think that no synchronous condensers, no rate mitigation and the fact this is not working the way we intended, and you still get $315,000 for that?”