Salaries at Provincial Agencies

Recent articles 2017

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Background

Controversy continues to swirl around salary levels at Alberta’s agencies, boards, and commissions (ABCs).  An article in The Globe and Mail by Justin Giovannetti  [spending-at-provincial-agencies-out-of-control24-9-16-gm] two weeks ago incorrectly identified the salary of the President and Chief Executive Officer of the Workers’ Compensation Board as the highest of provincial ABC executives.  A tabulation by Albertarecessionwatch.com of the largest and most critical ABCs in the financial, health, energy, and post-secondary sectors shows that WCB CEO Guy Kerr ranks 20th among his ABC colleagues.

The misunderstanding is based on confusion about the implementation of the Public Sector Compensation Transparency Act and Public Sector Compensation Transparency General Regulation (General Regulation).  This new legislation is similar to that found in other provinces such as Ontario and British Columbia known as “sunshine legislation” or the “sunshine list.” The Alberta legislation builds on measures taken by the Stelmach and Redford governments to release expense claims of government ministers and senior officials.  Online salary disclosure for 2015 starts at $104,751 for Government of Alberta employees and $125,000 for ABCs and includes both base salary and severance.  The reporting consists of all compensation and severance and non-monetary benefits which include employers’ pension, EI and CPP contributions.  All members of the boards of ABCs are also covered with no compensation thresholds.

However, these measures supplement existing requirements under a 1994 Treasury Board directive (now the Fiscal Management Act) which directed departments and provincial agencies to disclose the compensation of their most senior executives.  Thus we have a track record of executive compensation of top executives- normally the most highly remunerated- for two decades.

Under the relatively new General Regulation, compensation levels of employees of certain agencies- the Alberta Investment Management Corporation (AIMCo); Alberta Treasury Branches (ATB Financial) and its subsidiaries; and the Alberta Teachers’ Retirement Fund Board (ATRF) are exempt from salary disclosure. But, as noted, the compensation of top executives at these agencies has been, and continues to be, available going back two decades. According to a 27 April 2016 news release, Justice Minister Ganley justified the exemption as “consistent with the best practices in other public sector financial agencies…. and provide a level playing field between agencies and their private sector counterparts, while ensuring Albertans continue to be served by the top talent in the highly competitive financial industry.”

The complexity of executive compensation depends on the nature of the organization and peer groups in the industry selected by those who recommend and decide executive compensation levels. This is particularly true for the exempted agencies. As the summary table below shows, AIMCo has the most executives in the highest paid category. AIMCo also has the best disclosure on executive compensation by far of any of the agencies (18 pages). (The Alberta Teachers Retirement Fund also has fairly good disclosure of its compensation philosophy and mechanics.)

For ATB Financial, ATRF, and AIMCo, executives are compensated in four basic ways: 1) base salary; 2) annual compensation bonuses or variable pay; 3) long-term incentive plans; and 4) pensions and other post-employment benefits. At AIMCo, executives may also receive a grant for a special long-term incentive plan triggered when a “stretch goal” for the 4-year Long-term Incentive Plan has been exceeded.

Most employers also make contributions for Employment Insurance, Canada Pension Plan as well as pension and supplemental registered pension plans.  Other benefits may include dental coverage, vision care, disability insurance, and group insurance. Often the CEO is provided with a car which may, or may not, depending on the agency, be included in total compensation. Some ABCs provide perquisite allowances, club memberships, and professional fees. The devil is in the details.

The summary table below covers total compensation over $500,000 in 2016 and total compensation in 2015. For certain executives, there is no comparable 2015 data since they were not employed in the previous fiscal year. For NAIT, SAIT and MacEwan University the financial statements are for the year ending 30 June 2015, the most recent numbers available. Workers’ Compensation Board and ATRF statements are for the fiscal year ending 31 December  2015.

Since executive compensation has become a highly specialized area, the numbers from the tables are taken from the audited financial statements of the organization concerned. There are many footnotes explaining the cash payments, cash benefits and non-cash benefits. The presentation format varies considerably between institutions especially as to detail. The following PDF documents are extracts from the 2015 or 2016 notes to financial statements and annual reports for the 16 agencies reviewed.

AHS executives’ compensation under microscope24-3-17 EJ

alberta-crown-executives-face-squeeze-on-pay-perks25-2-17-gm

aimco-executive-salaries

atbatrfahs-executive-compensation

executive-salaries-apmcaeraucafscascwcb

executive-salaries-uofluofa-uofc-nait-sait-macewan

In addition to the financial statements and annual reports, the online compensation disclosure for these agencies was reviewed and an additional ten individuals were identified with compensation and benefits as reported totaling more than $500,000.  These individuals were from universities or Alberta Health Services.  Numbers reported are for the 2015 calendar year.

Albertarecessionwatch.com contacted either the Chief Financial Officer or Chief Human Resources Officer of the 16 agencies with executives on the list on 2 and 3 October requesting a review of the table. At the time of posting only ten agencies (Workers’ Compensation Board (WCB), the Alberta Securities Commission, NAIT, Grant MacEwan University, Alberta Health Services, Agriculture Financial Services Corporation (AFSC), ATRF, AIMCo, ATB Financial, and the Alberta Petroleum Marketing Commission) had responded. Responses varied from helpful corrections (and there were several) from three agencies, two conversations with CEOs, to unhelpful referrals to the financial statements without comment on the numbers and classification presented in the table.

The ranking below reveals that while base salaries in the executive ranks of Alberta’s ABCs range roughly between $250,000 to $600,000, total compensation at the financial corporations is often multiples of the base salary through annual bonuses and long-term incentive plans. In the energy-related commissions, base salaries are high but bonuses rare or non-existent. In the post-secondary sector, the most senior administrators receive base pay of upwards of $500,000 while pension and special leave entitlements may produce compensation approaching the $900,000  range.

A key policy issue for the government in determining how to shave executive salaries provided for in Bill 19 is to ensure adequate disclosure across all agencies.  For post-secondary institutions and the Alberta Securities Commission (ASC), no compensation discussion and analysis (CDA) is provided. This is true for the energy ABCs and at the WCB. At ATB Financial, the CDA is three pages which compare unfavourably with AIMCo, ATRF, and chartered bank disclosures that typically run over 40 pages. In the case of ATB, key metrics are not provided on the long-term incentive plan. For example, AIMCo spells out corporate objective performance and asset class performance over a four-year period. For ATB, short term incentive payments on based on “revenue generation and operational effectiveness, customer measures, and employee engagement scores,” but does not indicate specifically the percentage of each factor.

For all agencies there is no disclosure on what peer groups the board has used to determine salaries.  These deficiencies remain despite recommendations from the Auditor General going back to 2008.

Severance or payments derived from a termination clause were observed in a three cases.

Total Compensation of Executives of  Alberta Agencies, Boards and Commissions  ($000s)
 Rank
Position title
Organization
Name
Base Pay 
Grand Total- 2016
2015
Difference 2016/2015
1
President and chief executive officer
ATB Financial
Dave Mowat
504
2724
3138
-15%
2
Chief Investment Officer
AIMCo
Dale McMaster
387.5
2197.3
2050
7%
3
President and chief executive officer
AIMCo
Kevin  Uebelein
500
1971.3
N/A
4
Executive Vice-President -Private Markets
AIMCo
Robert Mah
333.5
1792.3
1549.5
14%
5
Chief Risk Officer
AIMCo
John Osborne
220.2
1599.8
1129.1
29%
6
Former President and CEO
AIMCo
Leo de Bever
1500
3728.4
-149%
7
Chief Client Relations and Legal Officer
AIMCo
Darren Baccus
259.8
1489.7
1169.3
22%
8
Chief Investment Officer
Alberta Teachers’ Retirement Fund
Derek Brodersen
315
1279.5
1065.8
17%
9
Former Chief Executive Officer
Alberta Teachers’ Retirement Fund
Emilian Groch
291
1181.6
1705.5
-44%
10
Senior Vice-President, Public Markets
AIMCo
Peter Pontikes
260.4
1136.6
985.7
13%
11
Chief Corporate and Human Resources Officer
AIMCo
Angela Fong
285.3
1132.1
799.5
29%
12
Senior Vice-President, Fixed Income
AIMCo
Sandra Lau
260.4
1058.1
966
9%
13
Chief strategy and operations officer
ATB Financial
Curtis Stange
317
1054
1265
-20%
14
Executive Vice-President, Business and Agriculture
ATB Financial
Wellington Holbrook
302
973
1045
-7%
15
President and Vice-Chancellor
University of Calgary
Elizabeth Cannon
480
943
895
5%
16
President  and Vice-Chancellor
University of Alberta
David Turpin/
Indira Samarasekera
547
888
N/A
17
Executive Vice-President, Corporate Financial Services
ATB Financial
Ian Wild
318
877
1099
-25%
18
Chief Financial Officer
AIMCo
Jacqelyn Colville
274.1
873.1
792.8
9%
19
Chief Financial Officer
ATB Financial
Bob McGee
252
866
N/A
20
President and chief executive officer

WCB

Guy Kerr
466
863
865
0%
21
Head, Private Investments
Alberta Teachers’ Retirement Fund
Rakesh Saraf
278.3
851
801.3
6%
22
Chief Risk Officer
ATB Financial
Bob Mann
285
823
1083
-32%
23
Executive Vice-President, Retail Financial Services
ATB Financial
Rob Bennett
267
807
840
-4%
24
Chief People Officer
ATB Financial
Lorne Rubis
287
789
918
-16%
25
Head, Real Estate
Investments
Alberta Teachers’ Retirement Fund
Barry Petursson
256.6
786.9
747.8
5%
26
Vice-President Research
University of Alberta
Lorne Babiuk
506
782
768
2%
27
Vice President, Facilities and Operations
University of Alberta
Don Fleming
479
768
706
8%
28
Vice-President, Finance and Admin.
University of Lethbridge
Nancy Walker
332
751
314
58%
29
Professor a)
University of Calgary
Stephen L. Bryant
705.9
737.5
Not available
30
President
ATB Investor Services
Chris Turchansky
252
733
N/A
31
President and chief executive officer
Alberta Energy Regulator
Jim Ellis
529
725
710
2%
32
Vice-President, University Relations
University of Alberta
Debra Pozega Osburn
384
722
511
29%
33
Senior Vice-President, Operations
AIMCo
Michael Baker
242
719
345.9
52%
34
Senior Portfolio Manager, Equities
Alberta Teachers’ Retirement Fund
Charlie Kim
238
714.1
716
0%
35
President and Managing Director
Agriculture Financial Services Corporation
Brad Klak
518
698
632
9%
36
President and Vice-Chancellor
University of  Lethbridge
Mike Mahon
428
687
658
4%
37
Senior Vice-President, Reputation and Brand
ATB Financial
Peggy Garrity
267
676
788
-17%
38
Vice-President, Finance and Admin.
University of Alberta
Phyllis Clark
469
672
696
-4%
39
Executive Director
Alberta Securities Commission
David Linder
379
659
619
6%
40
Vice- Chair
Alberta Securities Commission
Stephen Murcison
375
636
560
12%
41
Chief Executive Officer
Alberta Petroleum Marketing Commission
Richard Masson
630
635
635
0%
42
President and Chief Executive Officer
Southern Alberta Institute of Technology
David Ross
352
631
606
4%
43
Chief Executive Officer
Alberta Teachers Retirement Fund
Rod Matheson
276
623.5
N/A
44
Interim President, and Chief Medical Officer
Alberta Health Services
Verna Yiu
522
614
616
0%
45
Vice-President, Operations and Chief Information Officer

WCB

Wendy King
360
609
621
-2%
46
Professor a)
University of Alberta
Randall Morck
542.7
581
Not available
47
Professor a)
University of Alberta
Carlo Montemagno
538.3
576.1
Not available
48
Provost and Vice-President, Academic
University of Calgary
Dru Marshall
413
571
562
2%
49
President and Chief Executive Officer
Northern Alberta Institute of Technology
Glenn Feltham
309
570
576
-1%
50
Chief Financial Officer

WCB

Ron Helmhold
341
569
569
0%
51
Provost and Vice-President, Academic
University of  Lethbridge
Andrew Hakin
353
569
518
9%
52
Vice-President, Community Engagement and Commun.
Alberta Health Services
Carmel Turpin
237
560
150  (7)
53
Vice-President Academic
Southern Alberta Institute of Technology
Lee Haldeman
/Brad Donaldson
186
555
1221
-120%
54
Chief Financial Officer
ATB Financial
Jim McKillop
285
553
1083
-96%
55
Zone Medical Director a)
Alberta Health Services
Kevin Worry
483.5
543.8
Not available
56
Chief Executive (a)
Alberta Utilities Commission
Robert Heggie
464
543.0
Not available
57
Vice-President, Research
University of Calgary
Ed McCauley
391
539
529
2%
58
Professor a)
University of Alberta
Carl Amrhein
498.5
538.1
Not available
59
Vice-President , Student Services
MacEwan University
Cathryn Heslep
193
536
279
48%
60
Vice-President, Human Resources
Alberta Health Services
Todd Gilchrist
406
529
N/A
61
Physician a)
Alberta Health Services
Peter Craighead
457.6
527.9
Not available
62
Vice- Chair
Alberta Securities Commission
Tom Cotter
412
526
469
11%
63
President and CEO
Alberta Health Services
Vicki Kaminski
462
525
547
-4%
64
Executive Vice-President, Operations
Alberta Energy Regulator
Kirk Bailey
317
524
449
14%
65
Vice-President and Medical Director, Northern Alberta
Alberta Health Services
David Mador
452
522
547
-5%
66
Vice President and Medical Directora)
Alberta Health Services
Francois Belanger
448.3
517
Not available
67
Chair  a)
University of Alberta
Xin Min Li
478.1
512.8
Not available
68
Chief Legal Officer
AIMCo
Rod Girard
180.2
511.0
361.4
29%
69
Chair
Alberta Utilities Commission
Willie Grieve
348
509
479
6%
70
Lab Pathologist a)
Alberta Health Services
Mireille Kattar
475.7
507
Not available
Totals
25863
57763.12
47330
Notes: All amounts in $000s. N/A not applicable.
NAIT, Grant MacEwan and SAIT year ends are 30 June 2015.  ATRF and WCB for year ending  31 December 2015.
a) From Online  Compensation Disclosure for Agencies, Boards and Commissions,  calendar 2015.

Pensions

Another important element of compensation is pension contributions and the annual cost of the pension promise. Many senior executives do not have pension plans per se. Some, like Dave Mowat of ATB enter into “other post-employment benefit plans” (OPEB).   The contributions corporations must make to honour the promise can be very substantial. The analysis includes this information as well as the change in the value of estimated future payouts for AIMCo executives during the fiscal year.

Many executives who do not belong to a defined benefit plan (DB plan) make contributions to defined contribution plans (DC plan) whose sums are typically matched by their employer.  Another common benefit is the supplemental retirement pension plans offered to most management employees and is used to top off DB or DC plans that are capped under the Income Tax Act.  These plans are typically non-contributory and increase post-employment pension entitlement based on the employees base salary.

Gender

Of the 70 individuals identified, 15 are women.  The highest paid woman is Angela Fong, AIMCo’s Chief Corporate and Human Resources Officer at number 11 with total compensation of $1.058 million.  Sandra Lau, the Senior Vice-President of Fixed Income with AIMCo follows at number 12.   University of Calgary President and Vice-Chancellor, Elizabeth Cannon, is next at number 15.

Financial Expertise

The prevalence of financial sector employees in the list is startling. Of the 69 listed, 11 are from AIMCo, ten from ATB Financial, six from the ATRF, three from the ASC, and one from Agriculture Financial Services Corporation. Thus nearly one half of the highest paid executives come from the financial sector.  AIMCo executives make up nine of the top ten earners. Of the top 20 positions, only three were not from the financial sector and arguably the WCB head, given the importance of investment performance and insurance aspects, could be considered financial. And, given the exemptions afforded AIMCo, ATB, and ATRF, is would be highly probable that perhaps a dozen or more senior managers would be included in this league of total compensation over one-half million dollars.

Besides the financial sector, senior administrators and professors from post-secondary institutions accounted for 20 or nearly one-third of the survey. Typically the President, Provost and Vice-President Academic, and the Vice-President, Research made the list. Besides senior administrators, four professors made the list. Alberta Health Services (AHS) where controversy over executive salaries surfaced in the Calgary and Capital (Edmonton) Health Regions in the early 200os, ranked lower in the survey with the top AHS official at number 44. There were nine executives from AHS on the list or about 13 per cent.

Those with the highest base salaries are with agencies of the Ministry of Energy. Base salary for the CEO of the Alberta Petroleum Marketing Commission is $635,000 and $539,000 for the President and CEO of the Alberta Energy Regulator.

The complete chart is available in PDF below. Note that some of the cells contain comments that add explanation to the general headings used in this comparison.

abc-salaries

Watch for more analysis and opinion on this subject in the next several weeks.

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