The head of Alberta's investment firm is lashing out at critics who say his multimillion-dollar pay package is more appropriate for a professional hockey player than the man in charge of $70-billion in provincial savings and pensions.
The controversy has stoked new calls for controls on provincial executive compensation in Alberta, a province that has been hit hard by the recession and now finds itself with a fast-growing unemployment rate and a nearly $7-billion deficit. Even the board of AIMCo is now looking at ways to change its executive compensation.
Some of the anger has been sparked by the revelation that Leo de Bever, the newly installed chief executive officer of Alberta Investment Management Corp., earned $2.1-million last year, a figure that included $500,000 in long-term incentives - which Mr. de Bever says is currently worth nothing based on the fund's performance - and a $1-million signing bonus. The signing bonus was paid to cover off compensation Mr. de Bever had accrued at his former job.
AIMCo chief investment officer Jai Parihar, who is retiring, earned $2.8-million in salary and severance, plus an additional $362,000 in deferred compensation. Board members are paid $347,000 a year, nearly as much as the firm's chief operating officer.
The numbers, which were released in AIMCo's annual report, galled Opposition politicians, who angrily watched the province's treasured Heritage Fund lose $3-billion in value in the same year AIMCo was brought out from under government management and made into an arm's-length corporation. The Heritage Fund is Alberta's piggybank for oil and gas profits. The fund has since recovered $2-billion of that loss. Still, the compensation struck some as far too rich.
"A million-dollar signing bonus. Where do they think they are? In the NHL?" said Hugh MacDonald, the finance critic for the province's Liberal Party, who said it is time for the government to set standards for executive pay at public agencies. "For the economic times, it's too high. And the track record doesn't warrant that."
But Mr. de Bever defended the compensation as fair - and, in fact, a deal for the province - yesterday. AIMCo paid $174-million in external management fees last year. Mr. de Bever has calculated that it is four times cheaper to have his employees oversee money over hiring outsiders.
Mr. MacDonald, however, believes a sub-million-dollar salary should be suitable for the man in the top job.
"I think we should attract qualified individuals with a salary range of $600,000 to $800,000," he said.
But those who hired Mr. de Bever said small salaries are a bad idea. "You want the top guys doing it. You're not going to get the top guys if you're paying bottom dollar," said Charles Baillie, the former TD Bank head who chairs AIMCo.
Nathan VanderKlippe