How much CEOs deserve to be paid is a topic of much debate in these dark economic days. But spats over executive pay are not con?ned to the boardrooms of New York and Toronto. The latest one is taking place in Canada’s Arctic, where a scandal is brewing over the huge bonuses doled out to senior executives at First Air.
The airline, controlled by Inuit-owned Makivik Corp., handed company executives $1.5 million worth of bonuses last summer. Pita Aatam, chairman of First Air and president of Makivik, received a record-breaking bonus of $600,000, and George Berthe, Makivik’s corporate secretary, received a bonus of $250,000, according to Nunatsiaq News. By comparison, the head of Air Canada, Montie Brewer, took home a $690,000 bonus last year—only $90,000 more than Aatam, even though Air Canada has revenues of $2.5 billion compared to just $200 million for First Air.
Since the bonuses became public this fall, there’s been a growing push to have the money returned. “We can’t let this fester any longer,” said Liberal Senator Charlie Watt, a former president of Makivik, and one of the most vocal opponents of the bonuses. He has been calling for an emergency meeting on the subject and even the possible resignation of the directors involved.
Makivik, however, isn’t backing down. In a statement, the company claims that the bonuses were rati?ed by the board, and paid by a company that “generated a favourable return.” They “were earned, were reasonable and fair,” says the company. Far from being contrite, Makivik’s executives say “a number of us feel that these amounts were long overdue . . . and could have been higher.”
But opponents argue that the bonuses are outrageous because Makivik is no ordinary company. It’s a non-pro?t owned by the Inuit of northern Quebec with a mandate focused on the political, social and economic development in the region. Not only do the fat bonuses undermine the company’s credibility, argues Watt, but they’ve turned the collective into little more than a “piggy bank to a few.”