Liberals target 'unnecessarily generous' bonuses for Nalcor execs in new bill
Bonuses at Crown-owned Nalcor Energy that sparked a political outrage in Newfoundland and Labrador, particularly amid a worsening fiscal crisis, are about to become a thing of the past.
The Liberal government has introduced legislative changes that will allow the provincial government to have final say on matters such as compensation and terms of service for non-unionized employees at Nalcor and its subsidiaries, including Newfoundland and Labrador Hydro.
Currently, the Energy Corporation Act and the Hydro Act give full authority to the boards of directors on these matters, but that will end by as early as Friday. The proposed amendments will be debated this week in the House of Assembly.
"We're not targeting individuals," Industry, Energy and Innovation Minister Andrew Parsons said during a virtual news conference Wednesday.
"We want to do what's in the best interest of Newfoundlanders and Labradorians."
With the Muskrat Falls hydroelectirc project billions of dollars over budget and years behind schedule, and with province staring down the barrel of a fiscal calamity because of mounting debt, "the people of this province cannot afford to make unnecessary generous payments" to Nalcor managers, Parsons said.
The proposed amendments will give the government broad powers to issue direction to boards that govern these government corporations, and with a majority in the legislature, Parsons is hopeful that the changes can be proclaimed this week.
Bonuses have been common at Nalcor
It's not known how much money will be saved, or how many Nalcor employees might be affected by the change.
Bonuses have been standard practice at Nalcor, and have been paid out even as the Muskrat Falls project spiralled out of control.
In 2019, for example, Nalcor CEO Stan Marshall received a $315,000 bonus on top of an almost $460,000 salary.
In his final year with Nalcor in 2016, former CEO Ed Martin, widely regarded as the architect of the Muskrat Falls project, received a $100,000 bonus.
Executive vice-president Gilbert Bennett, who was heavily criticized in the Muskrat Falls Inquiry report, received an almost $70,000 bonus along with a $334,000 salary.
According to the province's annual compensation disclosure listing, dozens of Nalcor employees receive bonuses annually, ranging from $3,000 to as high as $50,000-plus.
Parsons committed late last year to eliminating the bonuses, and says these legislative changes are needed in order to make that happen.
The boards can continue to set compensation and terms of employment, but the amendment will give politicians the final say on whether they're acceptable. Similar language was included in the legislation that created that province's new oil and gas corporation.
The amendment, meanwhile, specifies that if changes to a Nalcor employee's compensation or terms of employment are ordered by the government, this does not constitute constructive dismissal or a breach of contract for the employee, and it also protects the government and its officials from any legal action by the employee.
Parsons said he had "numerous" discussions with the Nalcor board and Marshall about the issue, but offered little insight into how they reacted.
However, he also offered little sympathy for any pushback he may have received.
"This isn't personal. It's just business," said Parsons, adding the decision is not a reflection on the performance of Marshall or the Nalcor team. In fact, Parsons said the current leadership and board of directors has his full support.
What's not clear is whether the amendment will allow the government to eliminate hefty severance packages — in many cases hundreds of thousands of dollars — that some Nalcor executives receive upon departure. "This legislation is very broad and allows us great authority to deal with issues," Parsons said.
In a statement sent to CBC on behalf of the boards of directors at Nalcor and N.L. Hydro, an official wrote that "we are taking the time to review the changes, and as Minister Parsons stated this morning, there is still work to do between the board and government on next steps, and we look forward to those conversations."
