At the recent B.C. Ferries protest there was a lot of talk about huge salaries being paid to ferry executives. The salaries are indeed huge, and probably larger than the B.C. government intended.
The Coastal Ferries Act of 2003 created the B.C. Ferry Authority in order to move the ferry service out of direct government control. The B.C. Ferry Authority regulates ferry spending, including the salaries of executives. The authority’s bylaws say executive compensation paid by B.C. Ferry Services Inc. can be not greater than
“the remuneration that provincial public sector employers in British Columbia provide to individuals who, in those organizations, perform similar services or hold similar positions to that executive of BCFS.”
The Coastal Ferries Act was passed amid Liberal complaints of NDP overspending on fast ferries. It follows that the by-laws were written with the intent of keeping expenses low. Therefore, the words “not greater than” wouldn’t mean pay packages should be as high as possible. Rather, like parents who give their teen $50 to go to a dance, the framers of the B.C. Ferry Authority were probably hoping the ferries would be frugal and return with some change.
Yet as children grow older their parents do too. They may forget what they were trying to impress on the kids in the first place. An October 2011 report by the B.C. Ferry Authority may be a case in point. The report focused on how the ferry service should determine executive pay. It looked at salaries of top executives in these public institutions:
- British Columbia Hydro and Power Authority
- Insurance Corporation of British Columbia
- B.C. Pavilion Corporation
- British Columbia Securities Commission
- University of British Columbia
The report stated that ferry executives should get the “maximum” amounts paid by those entities.
As justification the 2011 report referred to million-dollar paycheques that go to private sector corporations. It looked at about 70 companies, including Kellogg Canada, which boasted a $2 billion operating profit that year, and Henkel of America Inc., which is an affiliate of a global company with headquarters in Germany. It manufactures household chemical products such as hair dye and detergents. In 2011 its gross profit was $7 billion euros.
Talk about mixing apples with fish.
Those companies, and even the five public entities, have little in common with ferry operations. Wouldn’t it be better to compare the ferry paycheques with compensation for similar ferry operators? The Huffington Post reported that the head of the Washington State Ferries makes $170,000 a year. That’s less than a third of the $500,730 paid to BC Ferries CEO Michael Corrigan.
Talk about intentions gone astray.
Rains on The Coast 