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BC Ferries President David Hahn during a press conference Prince Rupert March 23, 2006. (John Lehmann/The Globe and Mail/John Lehmann/The Globe and Mail)
BC Ferries President David Hahn during a press conference Prince Rupert March 23, 2006. (John Lehmann/The Globe and Mail/John Lehmann/The Globe and Mail)

Gary Mason

Ferry corporation off course with pension move Add to ...

Seemingly to confirm just how out of touch it is with the mood of the public, the board of the B.C. Ferry Corp. on Tuesday defended the decision to give company president David Hahn a $237,000-a-year pension increase that has sparked widespread anger.

The board's pronouncement puts Premier Christy Clark in an untenable position. She had called the hike - which boosted Mr. Hahn's guaranteed annual pension to $313,000 - too rich, and resolutely vowed not to tolerate any more "monkey business" of this kind from the board because it was unacceptable to most British Columbians.

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By defending the plum pension perk, the directors have effectively defied the Premier and challenged her to do something about it. Ms. Clark would appear to have little choice now but to fire the entire board.

Anything less would send out a horrible signal of weakness. And that is not something the Premier can afford to do ahead of incredibly tough and important negotiations this year with the province's public sector unions, including B.C. teachers.

The subject of Mr. Hahn's compensation at the ferry corporation has been a source of controversy since it was reported a few years ago he was making nearly $1-million a year - double what most senior executives in the public service make.

The revelation sparked a 2009 review by B.C.'s comptroller general, who found that management salaries at the ferries corporation were out of whack with others in the public sector and needed to be dramatically scaled back. The government passed legislation to do just that, but grandfathered the current executive group.

But 10 days ago it was disclosed for the first time that in addition to the salary and bonus increases Mr. Hahn has received over the years, directors in 2006 approved a $200,000-plus pension improvement. (Two other members of Mr. Hahn's executive group have also been given second pensions that together add up to more than $300,000 a year.)

In its statement on Tuesday, the board said Mr. Hahn's pension was increased because of the wonderful job he did in his first years with the company. The pension bump was apparently also intended to fend off recruitment overtures the CEO was said to be getting from companies in Canada and the United States.

The statement said details of the 2006 pension hike have been publicly available for three years and that nothing reported recently is new information.

So what? Getting any kind of information out of the ferry corporation has been a nightmare for the better part of a decade. Only recently was it put under provincial freedom of information legislation. The fact that the pension amount was previously available is irrelevant. What is salient, and really the only thing of importance here, is that his pension is odiously rich.

While the ferry corporation likes to think of itself as a private corporation along the lines of Ford or Coca-Cola, it is not. It is heavily subsidized by B.C. taxpayers, and has no competitors. The service is considered an extension of the provincial highway system.

The company may have an arms-length relationship with government in terms of its day-to-day operations, but the province can put it 100 per cent under its control with the stroke of a pen. Maybe it's time to do just that.

For all the wonderful things Mr. Hahn has done at the ferry corporation since arriving, one must not forget that he runs a monopoly - and a controversial one at that.

Few things in the province are subject to as much contention as ferry fares. And the optics of the president pulling in a salary and benefits that would be the envy of some traders on Wall Street are not good.

Three members of the current board were among the directors in 2006 who approved the pension increase. Two of them - Elizabeth Harrison and Maureen Macarenko - did not want to talk when I reached them by phone on Tuesday. The third, Graham Wilson, did not respond to an email.

But judging by the board's news release, none of the three are feeling any remorse about the decision. That is indefensible and, in my opinion, an outrage. If they have that little comprehension of how a compensation package like Mr. Hahn's appears to the average person, then they need to go - along with the rest of their colleagues.

It's time the ferry corporation was governed by a board that possesses at least a modicum of common sense, not to mention respect for taxpayers' dollars and for those of the travelling public.

Follow on Twitter: @garymasonglobe

 

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