Ford government promises ‘action’ if Hydro One doesn’t cut proposed CEO pay

Ford government promises ‘action’ if Hydro One doesn’t cut proposed CEO pay

Ford government promises ‘action’ if Hydro One doesn’t cut proposed CEO pay

Ontario's energy minister is asking Hydro One to come up with a revised executive compensation framework that slashes proposed CEO pay, warning that the government is not going to negotiate on the issue.

In response to Rickford's renewed request Friday, Hydro One said it continues to seek approval for its plan.

Rickford also said the province is ready to take "any and all action necessary" if the salary isn't cut way down. "Our government will always put Ontarians 1st".

For the time being, Energy Minister Greg Rickford says he's simply asking Hydro One to come back with a framework within the government's parameters.

The partially privatized utility submitted a framework last week that sets maximum CEO compensation at almost $2.8 million. It is proposing compensation of up to $1,856,000 for executive vice-presidents and up to $875,000 for vice-presidents. All told, the board's reduction in CEO compensation as well as payments to other executives and directors would save the company $10-million a year over the next four years, he said. Board members would receive $140,000 per year with the chair making $169,500.

"For several months now we have worked with the board of Hydro One to develop an executive and board compensation package that is reasonable and in the interests of shareholders". Mr. Woods said in his letter that Hydro One has identified a "very talented prospective CEO" who the board believes would accept the job under its proposed compensation plan.

"One million dollars still means a lot to me and I think it means a lot to the people of Ontario", he said.

In his letter to new Hydro One Board Chair Tom Woods, Rickford said the province made it clear that the public expected reduced compensation for the executive level.

The previous Liberal government sold a majority stake in Hydro One but remained the single largest shareholder by law.

"Hydro One's framework is the result of a rigorous process and balances concerns around cost management with the need to attract, retain and motivate highly-qualified leadership to Ontario's largest electricity transmission and distribution provider with over $25 billion in assets and annual revenues of almost $6 billion", it said in a statement.

"As part of that work, we reviewed compensation at peer organizations to confirm what comparable companies are paying to attract skilled leaders who have proven they are able to lead a large, investor-owned utility".

Rickford does not want CEO compensation to exceed $1.5M and has requested Hydro One reply to his letter by "Thursday at 5 p.m." with a new compensation framework.

The framework proposes significantly lower compensation for the CEO, top executives and board members than was received by their predecessors, it says.

After Schmidt was forced out, the utility's entire board resigned and downgrades and lower values of Hydro One shares followed.

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