- BC Games
Letter: Fortis exec’s paid well above average
To the editor:
In a letter published in the Capital News on Sept. 10, FortisBC’s communications director, Joyce Wagenaar, claimed the public utility pays its executive incomes the industry median, however; according to FortisBC’s own reports this is not accurate.
And as FortisBC’s CEO makes $1.36 million a year, almost three times that of BC Hydro’s CEO, this is not a minor issue.
Wagenaar wrote, as she has in another newspaper, “Compensation for the executive and all company managers is evaluated by a third party, and set at the median.”
Yet FortisBC documents to the BC Utilities Commission show that this is not the whole story. An August 2012 submission to the BCUC by FortisBC, cites the concern that “Executive base salaries are above the 100 per cent target amount and the average compensation is above the average target median.”
This is further substantiated by another FortisBC report. On page 851 of a Sept 2013 submission to the BCUC, FortisBC admitted, “Actual total cash is very competitive, with all FortisBC executives above market median” and “with all Short-term Incentives above the 70th percentile.”
Why this is important is because you’re paying for these exorbitant executive salaries. FortisBC is guaranteed a profit, no matter what it pays its CEO. And it’s not like FortisBC’s executives are compensated because they beat all their competitors—they don’t, as FortisBC doesn’t have any. The company is a monopoly.
Wagenaar can point to the fact FortisBC executives have a lower Long-term Incentive payment, but besides that not being good for a utility tying long-term performance to executive pay, that smaller long-term incentive is only paid for by shareholders, while the incredibly high short-term incentives are paid purely by ratepayers.
Clearly, Joyce Wagenaar misrepresented FortisBC in her letter, and in doing so, purposely or accidentally, underplayed the questionable high incomes of FortisBC executives. And not only are those executives earning above median incomes contrary to Mrs. Wagenaar’s comment, but they have grown substantially. Since 2006 the utility’s CEO has seen his total compensation increase 154 per cent, from $534,659 in 2006 to $1.36 million in 2012.
Considering FortisBC derives its monopoly from the government of British Columbia and is regulated to uphold the public interest, misleading people is something a public utility should not do.