Sunday, November 08, 2009

The most rewarding adventures of David Hahn and his fellow travellers

"We recommend the province amend the legislation to require that the Authority use competency-based criteria for the selection of members of the BCFS Board."
"Remunerate Authority members consistently with reasonably comparable public sector Authorities and Boards, and ensure their remuneration is public information." -- A few of the key recommendations in a comptroller General Report into both the state of affairs at BC Ferries and the Lower Mainlands transportation provider Translink.

We would imagine that Gary Coons probably enjoys a good book from time to time, what being a former teacher and all of that. But the NDP MLA for the North Coast, and frequent ferries critic for his party, not to mention ferry users everywhere in the province, are never going to find something as fascinating or perhaps horrifying in the Stephen King catalogue, as what has been offered up this weekend by the BC Comptroller General.

In a wide ranging report on the province's two main transportation providers; BC Ferries and Translink, the Comptroller General has outlined some frightening financial revelations and highlighted the rather over reaching rewards that come to those at the top of those corporations.
Cheryl Wenezenki-Yolland compiled the 97 page report (read the online version of it here) into the province's Transportation structure and one of the key points of those 97 pages appears to be the a review of the rather handsome rewards that are provided to those at the top of our Transportation offerings.

And at the top of the pay grid is B C Ferries Chairman David Hahn, who according to the figures released in the report made over 1 million dollars last year while toiling away on the affairs of the fleet. A number that after study for the report, comes out as twice as much as would be expected at comparable industries.

Life it seems is pretty rewarding just below the Chairman's chair as well, as four other executives at BC Ferries all collected over 500,000 dollars each as they nodded in approval when the Chairman spoke.

When it came to the salary review, the BC Ferry board apparently used some 92 large industries to determine executive salaries, examining such name brand industries such as Coca Cola, Ford, Nike, McDonalds and such to base the income distribution to their senior executives. In her report, Wenezenki-Yolland suggests that in their view of the remuneration debate, the more appropriate comparators for BCFS would be "public sector monopolies of similar size."
Companies which we imagine, have a more realisitic idea as to what the pay envelope should contain for a company the size of BC Ferries.

And as you wade your way through the report it would seem that the gravy train of financial largess seems to flow nicely, that as the Comptroller General reveals that the 12 member board of BC Ferries are paid as Ms. Wenezenki-Yolland puts it in the report, more than would be expected.

The Board of Directors is another issue that the Comptroller General found concerns about, finding that the BCFS Board establishes its own compensation, without accountability to anyone for the level of compensation it sets for itself. In addition to the compensation concerns, the report outlined how all Authority members are directors on the BCFS Board, which means that Board members are effectively accountable to themselves."
Two prominent Rupert names can be found on that Board of Directors list, as Dan Miller and Stephen Smith both have duties with the Ferry Services board and are recipients of the compensation rates that the Comptroller General has called into question.

One other bit of internal communication at the Ferry Service was cause for her concern, as she ruminated on the wisdom of having Chairman Hahn sitting on the Board of the Ferry Service, suggesting that the board's independence from management is at risk of being compromised if the CEO or another executive is a voting board member.

The Chairman himself, has not had any comments to make about the report as of Friday, but there were suggestions that he may have a reply to make as the new week gets underway on Monday.

Those 97 pages will surely make for interesting reading for him and the Liberal government in Victoria, but it would appear that no one on the Government side is in a particular hurry to thumb through the pages and act on any recommendations.

The report was completed and handed into the Transportation Minister Shirley Bond at the end of October, however it was not released until this past Friday afternoon, the 6th of November.
Released in what appears to be a classic document dump, what with the Legislature not sitting its contents could not be debated or inquired about in the chambers, there was the glow of the Olympic torch run having just dominated the news agenda and to deflect the news even more, there was arrival of Prince Charles and his wife Camilla in Victoria this weekend for a visit.

Minister Bond, (perhaps taking a break from practicing her curtsies) offered up a rather cryptic review of the report and what the government's plans for it may be. "What we're going to do is take the time to go through each recommendation, including the compensation recommendation, and consider what options government might take."

She went on to advise that she planned to consult with the stakeholders at B.C. Ferries and TransLink, as well as her cabinet colleagues, before deciding what to do.

Perhaps she can discuss the document with the Board at BC Ferries, maybe see if they're inclined to roll back some salaries to better reflect the Comptroller General's observations. Not to mention review her thoughts on developing a more accountable system of corporate governance and perhaps reinvesting some of that money, putting it back into providing some of the on the water services that British Columbians should expect from the floating pay window that seems to have become the Ferry Service.

It will be interesting to see how long we now will wait to hear what if any action will take place on the 97 pages of information and recommendation. It will also be worth watching the career path of the bearer of the worrisome news.
The Comptroller General clearly has outlined a number of trends and concerns about the transportation systems of the province, issues that should be addressed in a quick and as transparent method as possible.
We hope that her next report will outline many of the steps taken to bring some accountability to the provinces vital transportation sectors.

The Province-- Ferry board's public-funded pleasure cruise
Victoria Times Colonist-- Ferry executives paid too much: comptroller general
Victoria Times Colonist-- Soaring Ferries' pay lands on Liberals
The Tyee-- Bloated Pay, Conflict at Top of BC Ferries: Ministry Report
Canadian Press-- Provincial comptroller's review rips management of B.C. Ferries, TransLink
Update: November 9-- BC Ferries dismisses criticisms

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