One week after widespread criticism when it was revealed that company executives were awarded $10 million in bonuses while the company was negotiating a financial bailout from the government of Canada, Air Canada says at least some of that money is being returned.
In a statement released Sunday evening, Air Canada acknowledged “public disappointment” that it says was an “unintended consequence” of 2020 compensation to the company’s management.
It announced that, “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.”
And in addition, former Air Canada President and CEO Calin Rovinescu, who retired in February 2021, says he’ll donate the amount of his 2020 bonus to the Air Canada Foundation.
The total returned or donated by the top executive team amounts to less than $2 million of the $10 million bonus program. The remaining more than $8 million “was awarded to middle management” according to Air Canada, “to provide relief and retention amounts for over 900 Air Canada employees.”
When the news broke last week, Air Canada declined Open Jaw’s request for comment, but in Sunday’s news release, the carrier defended the compensation.
It said, “No taxpayer dollars or funds from the Canadian government sector support package are being used to fund these bonus arrangements for Air Canada employees or executives,” saying that the company instead paid for the bonuses from $8 billion the airline raised through the private sector during the pandemic.
Furthermore, it pointed out that when the pandemic hit, “senior executives and 3,200 management employees voluntarily agreed to total reductions of $11.5 million in their base salaries, 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.”
Air Canada also says the bonuses, “were consistent with compensation outcomes at companies that also suffered significantly during the pandemic.”
And it added the carrier “worked hard to preserve as many jobs as possible through the pandemic, with employee retention being a critical priority to enable continued operations through this extended crisis and to prepare for sustainable emergence from the pandemic.”
When the Globe & Mail broke the news last week, it noted that the airline reduced its staff by 20,000 during the pandemic.