MIRABEL, Quebec (Reuters) - Bombardier Inc’s dual-class share structure is vital to protect the long-term interests of the Quebec-based aerospace and transportation company, and the Bombardier-Beaudoin family has no plans to relinquish its majority control, Executive Chairman Pierre Beaudoin said on Friday.
“For the family, the success of this company has always been important. The family was there in good and bad times,” Beaudoin said in response to a question at Bombardier’s annual meeting. “The multiple voting right shares enable us to invest in the long term and allow us to protect the company against its dismantling, and we do not want to change anything.”
The share structure has long faced criticism, especially given the company’s missteps around its long-delayed and over-budget CSeries passenger planes that won a reprieve with a big order from Delta Air Lines on Thursday.
Several major investors, including the Quebec pension fund, have pressed the Bombardier-Beaudoin family to reduce its voting control of the company, according to sources.
The family has resisted ceding control of Bombardier, founded in 1942 by snowmobile inventor Joseph-Armand Bombardier. It moved into train and plane building via acquisitions made by his son-in-law, Laurent Beaudoin.
The company’s founding family has a 53.23 percent voting stake, largely via the 79.5 percent stake of Bombardier’s Class A multiple voting shares the family controls. Those shares carry 10 votes per share, while Class B shares carry 1 vote per share.
Bombardier has conceded that the dual-class structure is a factor in negotiations for a $1 billion cash infusion from the Canadian government.
Beaudoin on Friday declined to comment on the funding talks, saying only that he urged Canada to match Quebec’s pledge to put $1 billion into the CSeries passenger jet program.
Some influential minority shareholders, including at least three major Canadian pension funds, had called for greater transparency within Bombardier and opposed changes to its stock option plan and other proposals.
British Columbia’s main public sector pension fund has said it planned to withhold support from all five of the Bombardier-Beaudoin family members on the company’s board.
But Bombardier, as expected, easily passed all resolutions put forward by the company on Friday and won backing for all its board nominees despite the opposition from some shareholders.
The company’s stock consolidation plan, aimed at boosting its sagging share price, passed with 98.5 percent backing.
A shareholder proposal seeking greater transparency was defeated. It would have forced Bombardier to separately disclose voting results on all resolutions by class of shares.
The proposal, though, did win backing from Bombardier’s third-largest shareholder and ally in its rail business, Quebec-based institutional investor La Caisse de dépôt et placement du Québec.
Additional reporting by Euan Rocha in Toronto; Editing by G Crosse and Will Dunham