The Montreal headquarters of transportation conglomerate Bombardier Inc. is easy to find these days. It's the building with the protesters out front. Few things are guaranteed to exercise people like a good old-fashioned executive pay scandal.
But here's the rub: Any discussion over remuneration and bonuses in publicly subsidized industries is inevitably reduced to a binary equation: "It's Just The Market" (shrug) vs. "This is an abuse of public trust" (raise fists!).
A little nuance is in order. There's plenty to be angry about at Bombardier, but not every pay packet contains a scandal.
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Yes, executive chairman Pierre Beaudoin's salary of $2.3-million (excluding pension) is eye-wateringly generous, and no, it's not a great look that his compensation is approved by a board of directors that includes his relatives.
A lot of the outrage stems from Bombardier benefiting from massive infusions of public cash, some of which may not even be needed. (Last year, senior executive Rob Dewar described some of the money as "helpful but is clearly not required.")
In all industries, executives are often paid far more than the rest of us think they could possibly be worth because – surprise – there is a robust market for people who run large businesses. At the same time, in many cases, these executives seem to benefit from cozy relationships with remarkably compliant boards.
So the din rises. As a result, half the $43-million due to Bombardier's top six executives for 2016 will now be deferred until 2020.
That money was mostly at-risk pay and stock options; in effect, a bet the executives' five-year restructuring plan would succeed. That's how financial incentives are supposed to work.
So perhaps there's reason to temper the anger over the handsome amounts paid to CEO Alain Bellemare ($5.7-million, plus $6.9-million now deferred) for turning a company that loses lots of money into one that loses less.
But do be livid about any conflicts of interest or self-dealing at the board level, and an outmoded share structure that benefits the company's founding families. It's not as if Ottawa and Quebec City didn't know about that when they recently forked over a huge investment/bailout. Governments aren't particularly well-equipped to dictate salary terms to private businesses, even ones addicted to public largesse. But they should at least be able to drive harder bargains on the terms, including on corporate governance, before opening the chequebook.