New government restraints for executive compensation

The B.C. provincial government released compensation amounts received by senior public servants and reforms to compensation policy.

  • Jul. 25, 2012 3:00 p.m.

The B.C. provincial government released compensation amounts received by senior public servants.

Total compensation for senior public servants, in 2011-12, was 5.4 per cent lower than in 2010-11 and the total amount of bonuses paid fell by 13 per cent as the number of executives receiving bonuses and the average amount earned also dropped.

On average, compensation per executive was flat, the Ministry said.

Review of compensation for senior public servants found compensation in most Crown corporations was appropriate, additional reforms could be established to cut costs.

In the press release, the Ministry of Finance also highlighted changes to their compensation policy.

The changes are aimed at ensuring the province can attract and retain senior executives, in a manner the public coffers can afford.

The new policy initiatives surrounding compensation for senior public servants include:

Immediately freezing compensation of all current Crown corporation  executives, phasing out bonuses and replacing them with non-pensionable holdback of up to 20 per cent tied to financial and business results. This change applies immediately to new or newly promoted staff. Criteria for earning holdbacks will reflect the priorities set out in the shareholder’s letter of expectation.

Also in the new policy announcement is newly appointed senior executives will be paid 10 per cent less than the incumbent.  Executives will not earn more than New senior executives will be recruited at a salary 10 per cent less than the incumbent and executive salaries will not be greater than 85 per cent of the CEO salary.

The government also announced they were phasing out incentive pay for new non-executive staff, unless included in a collective bargaining agreement.

Crown executives, the Ministry of Finance said, will follow the same travel expense reimbursement policy as government executives.

Finally, a vehicle allowance where required for business will be the only permissible perquisite. Any other perquisites now in place will be phased out.

The Ministry of Finance said the measures will reduce total compensation paid out by the provincial government and establish a mindset of restraint.

The Ministry did not put a dollar figure on the expected savings.

The new policies surrounding compensation for senior public servants were promised in the 2012 budget presented in the speech from the throne.

Each public sector employer must disclose executive compensation on its website to meet the requirements under the Public Sector Employers Act. The information is also available at: www.fin.gov.bc.ca/psec/disclosure/disclosure11-12.htm