In response to two Access to Information requests filed by the Star, Canada Post said 7,402 employees were paid individual incentives in 2012, including 23 members of the senior management team, although Canada Post is refusing to disclose any details on how much was paid. The bonuses were paid based on individual performances in 2011.
The requests asked for average amount paid and total amount paid in bonuses over the past four years, as well as a breakdown of payouts to top executives over the same period.
When Chopra was named to the top job in 2011, the order-in-council appointment stipulated a five-year term and fixed his annual salary within the range of $ 422,500 to $ 497,100, with the possibility of a bonus of up to 33 per cent of his salary.
In an email, Privy Council Office spokesman Raymond Rivet said guidelines around the compensation of CEOs like Canada Post’s is approved by the governor in council, essentially by the governor-general on the advice of cabinet.
“The Privy Council Office does not discuss the personal information, including performance ratings, of governor in council appointees,” said Rivet, who pointed to an online chart that offers a sliding scale of possible bonuses depending on performance.
Canada Post’s division that includes mail, parcel and digital delivery reported a consolidated loss of $ 327 million, before tax, in 2011, blamed in part on a 25-day shutdown of the postal service due to a contract dispute with urban postal carriers, represented by the Canadian Union of Postal Workers.
Canada Post also cited a drop in mail volumes, pension obligations and a landmark $ 150 million pay equity decision for its losses.
“You can look at the numbers. We lost money last year, and that’s no secret,” said Canada Post spokesman Jon Hamilton, but added the company, which gets no taxpayer subsidy, needs to keep its talent and ensure they perform more than ever.
“Canada Post is in the middle of the most important transformation in the company’s history,” Hamilton said. “The challenges that we need to overcome to meet the changing needs of Canadians are huge.”
He also pointed out that the company, as seen elsewhere in the public sector, has a “pay at risk” policy, where employees have a lower base salary, but can earn a portion of their pay if they meet certain benchmarks.
Hamilton added Canada Post aims for its compensation to be competitive in the marketplace. “We are not the highest, we’re not the lowest,” he said, but by having a portion of compensation at risk, people who perform above and beyond will receive the incentive, and those who don’t won’t.
“It’s not a slam dunk,” he added, noting it is tied to individual performance against their individual objectives that are tied to the overall goals of the corporation.
Last year, 7,746 employees received bonuses and in 2010, it was 8,120.
The bonuses that were paid this year include about two-thirds who are represented by two unions, the Public Service Alliance of Canada and the Association of Postal Officials of Canada. Those unions represent administrative staff and supervisors in postal depots.
This year Canada Post, however, did not pay a corporate team incentive, which is paid across-the-board to all 56,000 employees, if certain goals are met in the previous year, such as safety and customer service improvements as well as financial benchmarks. Its base amount ranges from 3 to 4 per cent, depending on the union, but can be adjusted up or down accordingly.
In 2011, Canada Post paid just under 3 per cent to CUPW members and just under 4 per cent to other unions in across-the-board bonuses.
Part of Canada Post’s poor financial performance in 2011 is blamed on a contract dispute with postal carriers that resulted in rotating strikes and then an eventual lockout. The federal government brought in back to work legislation that imposed final arbitration, but the union has won two court victories to oust appointed arbitrators.
Richard Powers, director of governance programs at the University of Toronto’s Rotman School of Management, said companies look at many ways to measure performance when setting compensation. Often, this includes performance relative to other companies in the same sector.
Powers said it is important to ensure measures are in place for unforeseen circumstances, when there are heavy losses or heavy profits.
In refusing to release bonus amounts, Canada Post cited privacy concerns as well as a section of the law that permits refusal of disclosure because it “contains trade secrets or financial, commercial, scientific or technical information that belongs to, and has consistently been treated as confidential by” the corporation.
“We are in a competitive business that is only getting more competitive,” Hamilton said. “We are not going to provide a road map to our competitors to pluck good talent when we need it the most.”
Michel Drapeau, a law professor at the University of Ottawa who specializes in access to information, said details on performance bonuses should be released because it falls under discretionary benefits.
He also scoffed at Canada Post’s decision to withhold information for competitive reasons.
“You’re not asking for the salary range. You’re talking about performance bonuses.”
He argued this case was another example of deliberate delaying release of information, because it takes time and money for a requester to fight the case with the Information Commissioner of Canada. It often requires going to court.
“We passed legislation to restore the delivery of the mail,” Raitt said in a statement.