Fred Lum/The Globe and Mail
With the TTC looking to finance a $30 billion/30-year-transit expansion plan, the four as-yet-chosen citizen appointees to the Commission will face monumental decisions when they step into their jobs next fall. But is the city offering enough compensation to attract individuals with the best qualifications?
The city will pay a $5,000 annual retainer plus $450 per meeting – significantly less than the $25,000 in fees paid to the outside directors for Montreal's transit commission.
Indeed, a TTC staff report last fall recommended that the new citizen commissioners receive a stipend comparable to the fees paid to Toronto Hydro's directors. Citizen appointees on some other Toronto-area boards also earn more than what the TTC has offered.
Some observers say the fee shouldn't matter because such appointments allow citizens to make a contribution to their city. "People don't expect to make money in public service as a board member," says former budget chief David Soknacki, who chairs Parc Downsview Park's board. He earns about $12,000 a year, but adds that he'd do the job for no remuneration.
Yet executive compensation experts point out that the directors on public sector boards are expected to dedicate a significant amount of time and attention to the oversight work, and larger organizations tend to require more effort.
Directors of publicly-traded companies – often former executives, financial professionals and investors – tend to earn fees that are three to five times higher, says Chris Chen, national director of executive compensation for the Hay Group. With the TTC, he adds, "It's a good question: are you going to get what you pay for?"
A recent survey by Global Governance Advisors, another executive compensation firm, found that director fees paid by crown corporations tend to be in the bottom quartile of the retainer range for all boards. "It goes back to that personal philosophy," says GGA managing partner Paul Gryglewicz. "Is it my duty as a Torontonian to sit on this board?"
Experienced directors, he adds, "will typically choose the private sector organization if money was the driver because the workload will be the same" as for a large public sector board like the TTC.
The application deadline for the four TTC positions is July 4.
Toronto Transit Director: $5,000
Commission Per Meeting: $450
Revenues (2010): $997-million
Toronto Police Chair: $90,963
Services Board Directors $15,750-$22,500
Budget: $974-million
Toronto Community Chair: $20,000
Housing Corp. Director: $10,000
Revenues: $610-million
Toronto Hydro Chair $82,013
Directors $22,500-$27,500
Revenues: $570-million
Metrolinx: $200-$350 per day
(six board meetings/yr)
Revenues: $320-million
Waterfront Chair $30,000
Toronto Director $5,000-$7,000
Meeting Fee $500
Revenues: $147- million
Toronto Port Chair: $24,000
Authority Directors $13,000-$24,000
Revenues: $42.2 million
· All financial information is for fiscal 2010-11 except TTC, TPA