Enbridge Execs Got Big Pay Raises After Continent's Costliest Pipeline Spill, Andrew Nikiforuk, The Tyee, July 12, 2012" 'We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — which are now being operated principally on behalf of American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury.' — Edward Liddy, chief executive, American International Group"Ah, retention pay. It has been one of the great rationales for showering money on chief executives and bankers regardless of how well they are doing their jobs. It’s just that the specific rationale keeps changing.
"...Now comes Mr. Liddy, the government-appointed chief of A.I.G., defending multimillion-dollar bonus payments for the people who run the small division that brought down the company. If the government doesn’t let them have their money, they will walk away, Mr. Liddy says, and nobody else will know how to clean up their mess.
"We’ll get to the merits of his argument in a moment, but it’s first worth considering the damage that the current system of corporate pay has wrought. The potential windfalls were so large that executives and bankers had an incentive to create rules that would reward them no matter what. The country is now living with the consequences..."
According to Enbridge's 2011 "management information circular" the company's 12 directors voted to raise their own annual retainers by $30,000 and increased compensation for CEO and president Patrick Daniel from $6 million to $8.1 million in 2010.Blame spills all over Enbridge, Editorial - Detroit Free Press, July 11, 2012
Stephen J. Wouri, president of liquid pipelines, also saw his income increase from $1.9 million to $2.7 million in 2010. In fact all executives received substantial raises.
Earlier in 2010, on July 25, an Enbridge pipeline carrying diluted bitumen ruptured, pouring the toxic mixture for 17 hours into the Kalamazoo River near Marshall township in Michigan. The two-year clean-up has cost $800 million.
"The Marshall incident was factored into the 2010 short-term incentive awards for all of the named executives," said the circular.
A year after the disaster the Enbridge board again upped compensation for five senior executives under a short term incentive program that increased their pay by "$4,571,730 including $2,396,000 to the president and chief executive officer." The company says that it has a "pay for performance philosophy..."
"It will be very difficult to give Enbridge credibility going forward on any pipeline project. Tuesday's National Transportation Safety Board discussion of the 2010 break in the company's pipeline near Marshall was damning.Recommend this post
"Enbridge knew five years before the rupture that the pipeline had corrosion and cracking problems in that area. The company's response plan was inadequate for the location, with the nearest team 10 hours away in another state. Control room crews restarted the pipeline flow twice despite alarms. A tweet from the NTSB said the chairman compared Enbridge's handling of the rupture to the Keystone Kops.
"It's also becoming clearer that Michigan's pipeline disaster is making history. It is the most expensive onshore oil spill in history, in terms of cleanup costs that are now expected to exceed $800 million..."