MIRABEL, Que. – One day after announcing a major order for its CSeries jets from U.S. carrier Delta, the questioning turned to family control, compensation and governance at Bombardier’s annual shareholder meeting Friday.
The issue of ownership and the ongoing quest to secure US$1 billion in federal financial aid from the Trudeau Liberals was on the table, but Bombardier’s founding family moved quickly to clarify they have no intention of changing the voting structure that allows it to maintain control of the aerospace giant.
“Our multiple voting shares allow us to invest long term and protect the dismantling of this company,” said Pierre Beaudoin, the executive chairman of the board, a response that drew cheers from the approximately 900 people gathered in a Bombardier hangar in Mirabel, Que.
“We don’t intend to change anything.”
Beaudoin is a member of the Beaudoin-Bombardier family that controls the company with 53.23 per cent of the voting rights through its multiple voting shares — an issue that is an apparent sticking point with the federal government over possible financial assistance for Bombardier (TSX:BBD.B), according to some media reports.
In Toronto, federal Economic Development Minister Navdeep Bains said Beaudoin’s comments on the company’s structure was not a deal-breaker and negotiations were ongoing.
“We’re just engaged,” Bains added when asked about a timeline. “It’s all focused on positive outcomes. We want to be able to give a responsible decision, thoughtful decision. We don’t want to cut any corners.”
Bombardier signed a lucrative deal Thursday with Delta Airlines for 75 CS100 aircraft with options for another 50 planes. The order for the 75 planes is worth US$5.6 billion, though that’s based on the list price and Delta is expected to have received a discount.
One day later, Finance Minister Bill Morneau said in Quebec City the aerospace industry isn’t only important to Quebec — it’s also important to Manitoba and Ontario too — and the Liberals are committed to keeping the sector strong while maintaining jobs.
In October, the Quebec government invested US$1 billion to help its CSeries program and challenged the federal government to match.
Morneau defended the protracted negotiations with the aerospace giant.
“We’re in the midst of doing our due diligence and we will continue to do so,” Morneau said.
At Beaudoin’s side, Alain Bellemare, Bombardier’s president and CEO, wouldn’t comment on the status of negotiations with the federal government, limiting himself to both sides wanting a “win-win” solution.
Willie Gagnon of the shareholder rights group MEDAC was also critical of remuneration of senior management at the company, noting that Beaudoin and Bellemare shared US$10.2 million in its last fiscal year.
During a subsequent news conference, Bellemare, this time on his own, countered the executive compensation was in line with similarly sized companies in Canada and elsewhere.
And Bellemare said the turnaround that started with his team’s arrival last year justifies the salaries paid out.
Bombardier shares were down 7.84 per cent to end at $1.87 on the Toronto Stock Exchange.
— with files from Alexandre Robillard in Quebec City.