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Criticism of CPP investment Board as it plans to provide managers with pay bonuses after pension plan lost $13.8-billion in last year
Ottawa (1 May 2009) – Directors of the Canada Pension plan Investment Board (CPPIB) who manage the CPP's $100-billion in investments faced calls from MPs earlier this week to turn down bonuses they are about to receive despite presiding over billions of dollars in losses for the past fiscal year.
The public pension fund which most Canadian workers contribute lost 13.7 percent or $13.8-billion in the first nine months of the year ended March 31, 2009. Full-year results will soon be released and are expected to look significantly worse.
CPPIB executives found themselves on the defensive at a Commons finance committee hearing as MPs from all three opposition parties asked why they could not accept the pay incentives expected in May, given the fund's recent poor returns.
NDP Leader Jack Layton suggested in the House of Commons on Wednesday that it's inappropriate for the investment board executives to take bonuses as a result.
“In other words, the Prime Minister intends to do nothing about these directors of the pension plan, who have lost $20-billion of the savings of Canadians. It was there to protect their retirement. He is willing to do absolutely nothing while they pay themselves millions of dollars in bonuses. That is indecent and unacceptable. I would ask the Prime Minister to stand up and defend such an unconscionable act,” Mr. Layton said.
For the previous fiscal year ending March 31, 2008, the five senior executives at the CPP investment board whose pay is made public earned roughly $11-million in performance pay and bonuses.
On Tuesday, NDP finance critic Tom Mulcair asked Don Raymond, head of public market investments at the investment board, whether he was aware that his 2008 salary alone – $325,000 before bonuses and incentives – was larger than Prime Minister Stephen Harper's.
“Your base salary is greater than the base salary of the Prime Minister [and] is greater than the base salary of the Chief Justice of the Supreme Court,” Mr. Mulcair said. Mr. Harper makes just over $315,000 a year.
He called on the investment board to refrain from taking bonuses for the past year. “Let's be honest and say that at this time of grave economic crisis, the last thing you should allow yourselves ... is to be paid bonuses.”
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