Quebecor Inc. will pay outgoing chief executive officer Pierre Dion $7.2-million to pave the way for the return of Pierre Karl Péladeau to the family-controlled cable and media company.
The Montreal-based company disclosed the severance payment in its annual proxy circular filed Friday, noting that Mr. Dion agreed to receive the funds over a period of three years and that he remains with the company in board roles and will not receive compensation for his work as a director for two years.
Mr. Dion's exit from management in February capped a four-year period that saw Quebecor switch CEOs three times, incurring multiple sign-on and exit payments in the process.
Mr. Dion became CEO in April, 2014, when he took over from Robert Dépatie, who himself received a payment of $7.8-million when he left the company about a year after taking over from Mr. Péladeau (who later went into provincial politics).
Asked about Mr. Dion's severance payment Friday, Quebecor spokesman Martin Tremblay pointed to the company's performance under Mr. Dion's leadership.
"While Pierre was CEO, we saw tremendous results and the stock price is up significantly," Mr. Tremblay said, adding that Quebecor will continue to benefit from Mr. Dion's expertise in his roles as director of the holding company's board as well as chairman of the board of its main subsidiary, Quebecor Media Inc., which owns the Videotron cable and wireless business.
He also forfeited one-third of 870,000 stock options the company granted him in May, 2014.
Separate from his severance payment, Mr. Dion received total compensation of $11.3-million in 2016. That included his $1.3-million base salary as well as a medium-term bonus of $7.2-million. The company allocated that bonus in 2014 and paid it out last year after Mr. Dion hit two key targets: improving the company's ratio of debt to operating income and increasing its class B share price, which rose to $36.86 in 2016, up from $26.43 in 2014.
Quebecor held its first advisory vote on executive compensation, known as a say-on-pay vote, at its annual general meeting in May, 2016. The vote passed with 99.9-per-cent support from class A shareholders and 88.8-per-cent support from class B shareholders. It also plans to hold a say-on-pay vote at this year's AGM on May 11.
Mr. Péladeau, son of founder Pierre Péladeau, controls the company through his ownership of 90 per cent of its class A shares. Quebecor's class B shares in aggregate account for just 17.6 per cent of the company's voting rights.
In its proxy circular filed last month, Toronto-based Rogers Communications Inc. – another family-controlled cable and media company – similarly disclosed the exit package of its own outgoing CEO. Guy Laurence was let go in October after less than three years as the board decided to replace him with former Telus Corp. CEO Joe Natale, who will not join the company until July.
Rogers paid Mr. Laurence $5.8-million in cash severance payments in 2016, bringing the total compensation the company paid him to $42.6-million.