Thursday, February 19, 2015

Effective management... of bonuses

Republished from April, 2012, proving not much has changed:

The marvellous managers of British Columbia's public service demonstrate an indisputable skill. Come hell or high water, they always manage to hit pre-determined objectives and thereby manage to trigger payments of personal performance rewards and bonuses. (And you thought the 'manage' parts of their job descriptions were about directing agencies and enterprises.)

If senior public servants were inspired by New York postmen, they might appreciate a credo like this,
"Neither rising fees nor declining services nor mounting debts nor program botch-ups nor conflicts of interest nor auditor's reservations shall stay these administrators from from the swift completion of their expected deposits."
All public agencies in this province publish high-minded statements that recount what ICBC calls the need for,
"high caliber leadership and the retention of critical talent and knowledgeable executive level leaders capable of guiding the company through a period of transformational change."
Indeed, we're big on transformational change. ICBC has been undergoing that for ten years, under the guidance of six different CEO's.

Paul Taylor, Mr. Can't-Fixit, left the Liberal Finance Ministry for ICBC in 2004. There he doubled his annual remuneration and was hauling over half a million when he departed under a little cloud, described by Black Press as,
"Controversy over vehicles ICBC repaired and sold - some with undisclosed crash histories to the unsuspecting public and other better buys to ICBC staff who trumped all other bidders in rigged auctions."
Despite that, Taylor collected a six-figure bonus on the way out the door and carried with him credits for his "Supplemental Employee Retirement Plan," to go along with his supplemental retirement plan from the provincial government. These plans are for "preserving the income replacement objective for higher income employees." The most fortunate bureaucrats are able to stack pensions from multiple public sources, leading to retirement incomes far higher than their highest paid employment. In that vehicle trading and repairs scandal of the Taylor years, ICBC paid over $800,000 in severance costs to employees fired for involvement in the questionable practices.

Despite years of management targets met and bonuses paid, ICBC found itself needing to pay $26 million in severance to eliminate overstaffing of 2012. Departing executives responsible for hiring too many employees shared $2 milion for the inconvenience of no longer collecting annual incentive rewards for mythical targets met.

This week, after a whistleblower forced it into the open, ICBC revealed that hundreds of thousand of drivers have been charged incorrect premiums. Check Bob Mackin's work for the detail.

Some may already be wondering how all senior executives of ICBC can manage to earn substantial non-salary remuneration each year while the company continues to show evidence of incompetent management. This latest scandal dates back to 2008 and ICBC's five most senior executives collected over $5.1 million in bonuses and other non-salary compensation between 2008 and 2012.

Readers should not be surprised that Paul Taylor was back at ICBC as Chairman, only to depart suddenly a few months ago, three years before his term of appointment ended and before news of the latest difficulties leaked to the public.

Rest assured, more than a year from now, when we get the executive compensation reports for 2014, payments of executive performance rewards and bonuses wil remain undistubed and the ICBC Board of Directors will continue to be a resting place for beneficiaries of Liberal patronage. This is the model that got BC Ferries where it is today.

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10 comments:

  1. The election promise by the Liberals in late 90s or early 2000 to dismantle ICBC should have been kept.Managment rife with corruption and stacked with incompetent employees there isnt any facet of this buisness woth saving. Add to this the fact that ICBC has stepped way beyond selling car insurance. They are now the judge and jury and police force and a collection agency.
    A public inquiry is the only answer
    13

    ReplyDelete
    Replies
    1. The answer is to separate ICBC from partisan politics. Keep the best elements, discard the worst.

      Like the Auditor General, have ICBC report to the Legislature, not a Ministry.

      Delete
  2. Incompetent and reprehensible!

    ReplyDelete
  3. ICBC "contributions" to Finance Minister Mike de Jong's bottom line, razor thin two years in a row, balanced budgets???, .... the tipping point to a deficit budget was delayed by the BC Liberals until AFTER the introduction of the latest budget, only to "discover" the need to payback premiums????? Do you have the numbers Norman?

    ReplyDelete
  4. Liberal leadership 12 years plus.?
    34 Billion at start on bc outstanding debt credit card .Soon to be 70 Billion dollars!,,

    ReplyDelete
  5. Executive bonuses? Just got my ICBC renewal. Up again, just over 5% ($87) this year. And that's with the 40% discount. I haven't had a raise in a few years and even then it was 1%. But the increases in ICBC, hydro, msp wiped that out a long time ago. Going further and further in the hole. The pennies are gone from my pocket. ICBC being robbed by the government and too many overpaid over seerers of the corporation. Disgusted again by Christy and co. and the corporate buddies in bed with them.

    ReplyDelete
  6. Thanks Norm for your great comment here, scary times in BC. these days... increases in everything but wages unless your in that magical 2% range or your a floundering CEO>, MSP. , Hydro, ICBC. all the while we are still being gouged at the pumps for our so called break on gas prices you can't win In BC. unless your in that group of families that the liberals favor. I work with seniors and more and more they are heading to the food bank or the soup kitchen for something to eat , are you sick? the Dr. you need to see is busy for 3 years. One lady I know has 45$ left over after her rent and her bills are paid from her small pension, there is a thousand stories like that where ever you go... the province is billions in staggering debt. too bad Christy Clark couldn't have used the Bollywood money for the transit issue exploding in Vancouver these days, no referendum on that as she handed out 11 million and gave herself a trip to India, 14 years in power and we are losing or have lost most if not all of our major crown corp. this province has sold everything, in the name of a balanced budget what is left ? I have a family member who lives in west bank and loves Christy because she is a single mother struggling!!! Huh?.... on almost a million $ a year and unfettered access to the govt. credit card I wish my struggle was as difficult..
    I am forwarding this to anyone I can ... thanks everyone for letting me rant !

    ReplyDelete
  7. It is a 'I'll scratch your back if you scratch mine' kind of world now.
    I was asked to join a project team at the 'crown corp' I worked at due mostly to the fact that virtually no one at the management level has any functional experience in the industry (thanks to the BC Liberals).
    After listening to the most ridiculously circuitous project plan I have ever heard of I finally spoke up and started asking questions and making observations. I was naturally shut down and the million dollars worth of salary in the room decided to implement an obviously flawed plan that would, in my opinion, do the opposite of what was intended (to save money and increase customer satisfaction).
    I almost refused to add my name on the plan but eventually did and only after, in confidence, was I told this entire charade was about ensuring our VP, Senior VP and CEO met their strategic targets that were in their personal development plans. So essentially, this crown corp spent a little over $500,000 of all of our money to ensure three executives received another $100,000 of our money.
    Welcome to the world of the BC Liberals.

    ReplyDelete
  8. In the case of the fine Mr Taylor, it would have been money well spent to have paid whoever took him out of BC for a while to have kept him there rather than allow his return to perpetrate a DM position that would allow him to help orchestrate the subsidies that are called "royalty credit programs". Something that ensures the flow of royalties bypasses the BC taxpayer and puts those monies in the pockets of out of province owned natural gas producers. Not sure why anyone living in BC would think this type of policy is a good thing, but then most don't know and the communications kids in Victoria most likely aren't trying to get that message out.

    ReplyDelete
  9. Public enquiry or full blown Corruption Enquiry, I'm a big fan of both, but in the BC Liebrals case, the Corruption enquiry would cover far more ground, be wider in scope and ultimately put some of the clowns behind bars. Public enquiries by their nature are subject to political manipulation, whereas a judicial corruption enquiry would not be. Quebec got it right, in their situation. We desperately need a corruption enquiry in this province. The whole history of BC Liberal policy and manipulation in the past 15 years, needs to have the light of day shone on it. This party and its so called "secrets" need to be opened up big time. Jail sentences, would be forth coming, after judicial trials. Anywhere else in the western world this would have been done years ago. In the banana republic of BC...not so much...

    ReplyDelete

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