K66087
Air Canada has broken its silence over bonuses amounting to $10 million it awarded to its executives, saying the money will be returned and donated.
In a statement, Air Canada acknowledged the “public disappointment” caused by its decision to award the costly bonuses, after thousands of its lower-level staff faced more than a year of furloughs and layoffs, and were denied access to government wage subsidies.
“In order to help address this unintended consequence, the current executive vice-presidents and the president and CEO of Air Canada have chosen to voluntarily return their 2020 bonuses and share appreciation units,” the airline said.
Additionally, former president and CEO Calin Rovinescu is donating his entire 2020 bonuses and SAUs to the Air Canada Foundation, which provides financial support to Canadian-registered charities focused on improving child health and wellbeing.
“I know the funds will be put to good and appropriate use during these difficult times,” said Rovinescu.
Last week, unions slammed Air Canada as being “morally corrupt”, as they awarded their top executives with large bonuses to compensate their temporary wage cuts.
This coincided with Air Canada receiving $656 million from the government’s Canada Emergency Wage Subsidy Program, and $5.9 billion from the federal rescue plan announced April this year.
However, employees who were laid off were denied access to this subsidy altogether.
In total, about 3,200 employees and executives agreed to collective reductions of $11.5 million in their base salaries, the statement said.
Those people would be “subject to compensation through share appreciation units that might allow employees to recover some of the foregone salary if – and only if – the share price is higher by December 2022 as compared to December 2020”.
The Canadian airline claimed the $10 million was designed to provide relief for over 900 employees, and $8 million of the total amount was awarded to middle management, excluding executives.
Air Canada said these amounts were in recognition of their work during the worst of the pandemic, as they saw an operating loss of $785 million in the third quarter of 2020 alone.
Canadian Finance Minister Chrystia Freeland said the bonuses were “inappropriate” when the news surfaced last week.
“While this situation could have been entirely avoided by Air Canada, we acknowledge this step in the right direction,” Minister Freeland and Transport Minister Oma Alhgabra said in a statement on Sunday.
“Canadians are right to expect responsible corporate behaviour – particularly with respect to executive compensation – from companies receiving government financial support during the pandemic.”
