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Canadian Pacific Railway president and CEO Keith Creel addresses the company's annual meeting in Calgary on May 10, 2017.Jeff McIntosh/The Canadian Press

Canadian Pacific Railway Ltd. chief executive officer Keith Creel was paid a total of $26.7-million last year, a figure that will likely place him among the best-paid top executives of Canadian companies in 2021.

The pay package included a salary of nearly $1.5-million, a cash bonus of $2.34-million, and share and option awards worth more than $22-million. That includes a special stock-option award worth $10.53-million that CP gave the 53-year-old Mr. Creel in March to keep him at the company through 2026.

The company says it plans to reduce Mr. Creel’s compensation over the next four years to offset the special option award, which came as it won a battle with rival Canadian National Railway Ltd. to acquire Kansas City Southern.

Just six CEOs among the 100 most valuable companies on the Toronto Stock Exchange made more than $20-million in 2020, according to The Globe and Mail’s annual survey of pay conducted in partnership with Global Governance Advisors.

Matthew Paull, the chair of the CP board’s management resources and compensation committee, said shareholders told the board they wanted the management team retained.

“Keith and his leadership team, along with the unique CP culture they created, have delivered remarkable results for CP shareholders in the last five years with approximately 150 percent growth in [total shareholder return], consistently outperforming the S&P/TSX Composite and the S&P 500 indices,” he wrote in a message to shareholders in the company’s proxy circular.

He called the March 21 option award a “critical step to retain Keith … with the intention of him continuing to lead CP until at least 2026.”

Mr. Creel made $16.82-million in 2020 and $15.15-million in 2019.

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Pay for CP’s other top executives was mixed, as chief financial officer Nadeem Velani (who earned a total of $4.89-million) and chief marketing officer John Brooks (who earned $4.83-million) saw their pay fall, while Mark Redd, the executive vice-president of operations (who earned $4.11-million), and chief legal officer Jeffrey Ellis (who earned $2.83-million) saw pay climb.

Cash bonuses were down across the board as CP gave itself a lower performance score in 2021 than it did in 2020. To arrive at the “corporate performance factor” that drives annual bonuses, CP evaluates its results in expense control and operating income – the two most heavily weighted categories – and safety and scheduling measures.

In 2020, CP arrived at a factor of 172 per cent, yielding hefty bonuses. In 2021, however, the company calculated a 125-per-cent factor, owing to underperformance in operating income, accident frequency and on-time shipments. On the plus side, expense controls and injury frequencies yielded the maximum possible performance numbers.

As a result, Mr. Creel’s bonus of $2.34-million was down from $3.44-million in 2020.

CP said the value of Mr. Creel’s 3,266,180 unexercised, in-the-money options granted since 2014 was $122.8-million at Dec. 31, based on the company’s share price of $90.98 at the time. Insider trading records show CP granted him 208,107 more options on Jan. 31, and he has used none of the ones he owned at year-end. CP shares closed Monday at $103.66.

In its proxy circular, CP also confirmed it will ask its shareholders to vote to approve its approach to climate change, making it the second large Canadian company to do so after Canadian National Railway Ltd. conducted a similar vote last year. British billionaire hedge-fund manager Christopher Hohn started a movement called “say-on-climate” through his TCI Fund Management Ltd., which is a shareholder of both railways.

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