CN Rail paid prime executives large bonuses final yr, first time since 2018

Canadian Nationwide Railway Co. CNR-T paid prime executives, together with outgoing CEO Jean-Jacques Ruest, sizable bonuses final yr for the primary time since 2018.

Mr. Ruest obtained a bonus of $2.32-million in 2021 as a part of a complete compensation package deal of $13.55-million. In 2020, Mr. Ruest’s bonus was $313,334, and the corporate paid no bonuses to prime executives for 2019 efficiency.

The rise in annual incentive pay was the important thing driver in a 25-per-cent enhance in whole compensation for Mr. Ruest, who made $10.81-million in 2020. In 2021, CN gave Mr. Ruest share and choice awards valued at $9.10-million, up about $250,000 from the prior yr. He made a wage of $1.09-million, down barely from 2020.

CN, Canada’s largest railway, introduced Mr. Ruest’s retirement in October towards the top of a tumultuous yr.

Within the spring, CN tried to dam rival Canadian Pacific Railway Ltd.’s CP-T takeover of Kansas Metropolis Southern Co. with a US$29.9-billion provide. The winner of the struggle would add a coveted community that ran via Mexico’s auto manufacturing area and to each Mexican coasts.

CN went on to lose the takeover battle to CP, which made a decrease provide however had a clearer path to approval with the U.S. regulator. CN then confronted a potential proxy battle from its second-biggest investor, Christopher Hohn, who was sad with CN’s failed takeover bid and poor monetary outcomes. Mr. Hohn known as for the ouster of Mr. Ruest and then-chairman Robert Tempo.

Rival CP paid chief government officer Keith Creel $26.7-million final yr, together with a money bonus of $2.34-million, and share and choice awards price greater than $22-million. That included a particular retention stock-option award price $10.53-million. The CP board cited its profitable bid for Kansas Metropolis Southern as a major purpose for Mr. Creel’s pay.

CN’s shareholder proxy round stated the railway boosted bonuses as a result of it exceeded its monetary objectives – some set decrease than the prior yr – by massive margins.

CN makes use of three monetary metrics – income, working earnings and free money move – to find out 70 per cent of annual bonuses. It stated it modestly exceeded its income goal, however its efficiency for the latter two metrics was so good as to generate a payout of 200 per cent of the goal.

CN’s working earnings goal was about 1 per cent beneath 2020′s precise outcome, and its free money move aim was about 5.5 per cent beneath the 2020 quantity.

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The railway paid zero for the 5-per-cent portion of its bonus linked to its accident fee, which was nicely worse than its goal. Nevertheless it paid out double for the 5 per cent linked to harm frequency fee, which got here out higher than goal.

Two different CN executives – chief monetary officer Ghislain Houle and chief working officer Robert Reilly – obtained bonuses topping $1-million as a part of compensation packages price $3.5-million and $4.54-million, respectively.

Spokesman Jonathan Abecassis stated Wednesday the 2020 targets have been decided “as a right for the upcoming pandemic, main in overvalued aims for that yr.” Then the board based mostly the 2021 targets on the outlook in January of that yr, “which was nonetheless impacted by the unprecedented occasions of the pandemic.”

CN’s revenue rose by 12 per cent to $4.9-billion in 2021 from 2020 whereas gross sales elevated by nearly 5 per cent to $14.48-billion. CN’s share value rose by practically 13 per cent, in contrast with practically 4 per cent for CP and about 20 per cent on the broader S&P/TSX Composite Index.

CN additionally stated new CEO Tracy Robinson, who assumed the position on Feb. 28 after a profession at CP and TC Power, obtained an annual compensation package deal focused at US$9.2-million, “the identical degree as Mr. Ruest’s goal compensation for 2021.” It features a wage of US$900,000, with a goal annual bonus of US$1.26-million, and a share and choice grant valued at US$7,040,000.

CN additionally gave her a “particular make-whole award” of $1,675,000 in money and inventory in consideration of compensation she forfeited by leaving TC Power.

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