Canwest executives look after themselves
As any reporter knows, you can find some tasty tidbits of information when going through court documents.
Such as: At about the same time that Local 2000 was approached last spring to consider a five per cent cut in wages at PNG, to help the company get through its economic difficulties, Canwest agreed to pay out approximately $41 million owing to the Canwest Global Communication Corp. and Related Companies Retirement Compensation Arrangement Plan that covered certain “current and former management employees.” The plan was wound up and its (unnamed) participants were paid out, on Sept. 4, 2009, the approximately $47 million promised to them. (Part of the payment will be made later, after a tax refund from Revenue Canada.)
This is in contrast to the treatment of 120 members of the Global Communications Limited Retirement Plan for CH Employees, who are facing reduced pensions because Canwest is attempting to avoid any financial obligations to the plan as part of its Companies’ Creditors’ Arrangement Act (CCAA) filing.
And dozens of recently laid-off employees across the Canwest television division certainly wish they would be getting what’s owed them. Instead they face the loss of promised severance pay. For Pat Vanderburg, who has worked for CHBC TV in Kelowna for the past 23 years, this will amount to a loss of over $95,000.
About 80 non-union retirees also stand to lose promised Canwest-paid medical, dental and life insurance benefits. (All retirees who were represented by a union will continue to get their retirement benefits.)
Current shareholders, whose stock was worth $20 a few years ago (25 cents when trading was halted Oct. 6), will receive just 2.3 per cent of the new company when it emerges from the Companies’ Creditors Arrangement Act [CCAA] process.
Hundreds of suppliers, including Adbusters Media Foundation (owed $9,060), Advance Auto Centre in Victoria (owed $2,213.13), Beyond Your Eye Productions of Vancouver ($1,575.00), Black Top Cabs ($64.25), Van Press ($55,877.77), and United Way of the Lower Mainland ($1,422.20) will go into a line-up of unsecured creditors and likely receive a few cents on the dollar at best.
But three directors, four top executives and 13 other senior members of Canwest management will share $9.8 million in Key Employee Retention Plan (KERP) bonuses, in addition to their already substantial salaries, simply to keep working. Curiously, about $4 million of these KERP payments will be made by the newspaper side of Canwest, even though it is not yet in CCAA.
As well, certain unnamed Canwest senior executives will continue to receive their current benefits until at least one year after the company emerges from CCAA and then retirement benefits for life. (The cost per year of these benefits is blacked out on documents available for public viewing at: http://cfcanada.fticonsulting.com/cmi/)
Canwest directors will also be protected against any financial liability, up to $20 million. This protection receives priority over almost every other debt the company owes.
Incredibly, when the newspaper side of the business also enters CCAA, more such examples of directors and executives helping themselves to the last tasty remnants of a corporate carcass will likely be revealed.
Those with the power to look after themselves have done so and it is all deemed perfectly legal. In fact, the “insolvency system” seems designed to allow a select few to have one more big slurp from the bowl of gravy, along with the lawyers and other bankruptcy specialists. How else to explain the KERPs that are an ordinary part of the insolvency process in Canada?
One comfort for those of us lucky enough to belong to a union is that the CCAA process seems to respect collective agreements. Our union contract remains in force, our wages will continue to be paid and other terms and conditions must be honoured. The PNG pension plan is healthy and the company must continue making payments so long as it continues to operate.
Our insolvency experience so far suggests that the system promotes greed and looking after oneself at the level of corporate executives, while workers must stick together in their unions to protect themselves from harm.Canwest executives
This entry was posted on Wednesday, October 28th, 2009 at 3:52 pm and is filed under Local News.
