Shaw Communications headquarters in Calgary on April 13, 2011.Jeff McIntosh/The Canadian Press
Shaw Communications Inc. made a $25.5-million payment to former CEO Jim Shaw when he retired in the past fiscal year, regulatory filings show.
The company offered no explanation for the payment in an annual shareholder proxy circular filed late Friday, which also shows Mr. Shaw's pension entitlement ballooned in the past year. However, the company's first-quarter earnings released in January showed Mr. Shaw received a $25-million "package" upon his retirement, which equalled three years of compensation at $8.5-million a year.
The new document shows Mr. Shaw earned $26.7-million in the fiscal year ended Aug. 31, and a footnote to the compensation chart briefly says the total includes "a payment totalling $25.5-million for Jim Shaw in 2011." Mr. Shaw retired as CEO in November, 2010, at age 53.
Mr. Shaw, the son of cable company founder JR Shaw, retired two months earlier than his previously announced retirement day of Jan. 13, 2011, shortly after he was criticized for displaying unusual behaviour at an investor luncheon. Some people who attended the Vancouver event said he appeared to be inebriated. He is still on the board of Shaw and is the company's vice-chairman.
His brother Bradley Shaw, who succeeded him as CEO, earned $15.8-million in the past year, including a base salary of $2.4-million, a bonus of $4.8-million, share-based awards worth $825,000 and an accrued pension value worth $7.7-million.
Executive chairman JR Shaw earned $16-million, including $8.8-million from a special bonus plan that awards Mr. Shaw a percentage of the company's operating income each year.
The proxy circular also shows rising costs for the company's gold-plated executive pension plan. Jim Shaw was awarded a pension of $5.9-million annually when he announced his retirement plans last year, an increase from his previously disclosed pension entitlement of $5.3-million annually.
The company said the accrued obligation to fund his pension climbed to $85.1-million as of Aug. 31, up from $71-million a year earlier.
Bradley Shaw's pension costs also rose after his entitlement was boosted when he became CEO. He is now eligible to earn a pension of $4.7-million annually at age 65, up from $3.97-million previously. The accrued cost to fund his pension has risen to $50.8-million from $37.6-million at the end of fiscal 2010.
Shaw Communications said the total obligation for its supplemental executive pension plan is now $334-million.
A review of Canada's 100 largest companies earlier this year showed Jim Shaw has the most expensive pension of any public company executive. Aside from other Shaw executives, Toronto-Dominion Bank CEO Edmund Clark had the next-largest pension plan worth almost $2.5-million a year, which had a total funding obligation of $29-million and includes benefits from a TD pension plan and a former Canada Trust pension plan.
The January earnings release said the board of directors agreed to credit Mr. Shaw an additional 18 months of service to the company pension plan upon his retirement "to recognize his significant contribution to the growth and financial success of the company over many years."
It said the company reached an agreement with the former CEO "to facilitate an orderly and timely transition of senior management functions," and had agreed to pay him "a package which is comparable to standards and practices for a CEO of his long tenure."
Bill Mackenzie, senior adviser for Canada for giant U.K.-based pension fund manager Hermes, said Shaw's compensation practices continue to raise the ire of investors, but they have little ability to protest because the company's voting shares are controlled by the Shaw family and the broader Class B shares have no voting rights.
"There was a lot of institutional backlash over the pension given to Jim on his departure because it was rather monstrous," Mr. Mackenzie said Monday. "This is just another piece that will get everybody upset."
Mr. Mackenzie said companies with oversized pay practices like Shaw are helping fuel protests against the escalating size of executive pay compared to pay for ordinary employees.
Janet McFarland