MONTREAL/TORONTO (Reuters) - Bombardier Inc (BBDb.TO) faced fresh pension fund opposition to the re-election of its executive chairman and the Quebec government said the plane and train maker should listen to the growing number of institutional shareholders citing governance concerns.
The Canada Pension Plan Investment Board (CPPIB), the country’s largest pension fund manager, withheld its vote for the re-election of Pierre Beaudoin at Bombardier’s annual meeting on Thursday.
The Ontario Teachers Pension Plan (OTPP) also withheld its vote on his re-election on Tuesday, echoing similar moves by Quebec and British Columbia funds.
“Our assessment of recent events confirms the need for independent board leadership,” the OTTP, which does not disclose its position, said on its website.
Beaudoin, a former chief executive, is a scion of Bombardier’s founding family, which controls the company through its dual-class share structure. The shareholders’ decision follows a recent outcry over controversial executive pay hikes at Bombardier, which Beaudoin later agreed to forgo and other executives agreed to defer.
Beaudoin is expected to stay on this week despite the opposition, two company sources said. The family’s controlling stake means the pension funds’ moves are largely symbolic.
The pay raises of up to 50 percent for 2016 came after Bombardier received more than $1 billion in federal and provincial government funding, sparking protests outside Bombardier’s Montreal headquarters.
Quebec Economy Minister Dominique Anglade said the company should “clearly be listening to its shareholders.”
While the Quebec government, a major investor in Bombardier’s CSeries narrowbody jet program, would not take a position on Beaudoin’s future as executive chairman, Anglade said she understood shareholders’ concerns.
“I’m not entirely surprised because there was a decision that was made that led to an unacceptable pay increase,” she said in a telephone interview.
A Bombardier spokesman reiterated a Monday statement that shareholders would “have an opportunity to discuss these important questions” at the May 11 meeting.
On Monday, Quebec’s largest pension fund Caisse de depot et placement, one of Bombardier’s biggest shareholders, said that it had withheld its vote for Beaudoin and called for a fully independent director to head the board.
“The fact that they publicized this is to rally shareholders to voice their opposition,” an analyst who covers Bombardier said of the Caisse.
British Columbia’s main public sector pension fund has gone further, saying it planned to withhold support from all five of the Bombardier-Beaudoin family members on the company’s board, along with compensation committee members seeking re-election.
Reporting by Matt Scuffham and Allison Lampert; Additional reporting by Shalini Nagarajan; Editing by James Dalgleish and Gopakumar Warrier