Financial Times article suggests our public pensions aren’t walking the walk, let alone talking the talk.
Former Ontario Teachers’ Pension Plan CEO Jim Leech made $7.4 million in 2013 while his future successor, Ron Mock, hauled in $2.5 million in 2013 in his role as vice president of fixed income and alternatives. These are pretty heady sums for executives of any kind.
Besides, isn’t Ontario broke?
Sure, OTP represents the teachers of Ontario and not the province itself but those teachers are paid by Queen’s Park, which the last time we checked had a projected 2014-2015 deficit of $12.5 billion and net debt of $287 billion or 40% of GDP.
Are public pension fund executives really worthy of similar pay to their colleagues in the private sector?
Not according to Chris Roberts, director of social and economic policy at the Canadian Labour Congress. He calls the pay for Canadian pension executives “alarming” when compared to their global peers.
“Canada is beginning to be an outlier – that is a special concern. I am not convinced that these salary levels are warranted in a climate when public sector budgets are being squeezed and public sector workers are being told to tighten their belts.”
These words aren’t unexpected coming from the CLC. What else is an organization representing unions going to say about CEO compensation – of any kind?
A counterargument can be made when it comes to pension executives that if you pay peanuts, you’ll get monkeys.
FTs article points out a January report from the Rotman International Centre for Pension Management (ICPM) that suggests pension fund returns are stymied by “uncompetitive compensation structures” for senior management and investment managers.
“It will require a concerted, ongoing joint effort by pension-plan stakeholders, pension organization boards and legislators to change the current situation.”
A similar argument is made in C-suites across the land. Unfortunately, when people are losing their jobs the optics are really bad.
How much is enough?