Ostensibly, they are a reward for achieving corporate performance targets. Given that Nalcor has had some serious problems with its capital works and maintenance program over the past decade, it is rather surprising to see people getting great gobs of cash while the company hasn’t been performing.
Ostensibly, the bonuses are part of a compensation package that keeps the company competitive. That’s how Nalcor chief executive Ed Martin justified the compensation now that we understand they are the chief cause of the cost increases Nalcor is using to justify its request for an increase in electricity rates this year.
Odd that Martin tried that excuse given that we haven’t seen any Nalcor senior executives lured off to more lucrative positions elsewhere. If there have been examples perhaps Nalcor could list them. If there haven’t been perhaps the folks at Nalcor wouldn’t then insult our intelligence by claiming that is proof the bonuses work.
The bonuses are likely more along the lines of the huge raises Danny gave his personal staff. Martin is paying them because he can just as Williams paid his crowd handsomely because he could.
Deputy premier Steve Kent found himself in an embarrassing situation on Thursday. He started out by saying that cabinet would be reviewing the bonus scheme. By the early afternoon, Kent had to suck that back on two counts. First compensation for Nalcor executives is the responsibility of Nalcor’s board. Second, neither the cabinet agenda nor Nalcor are within Kent’s purview.
Some people made fun of Kent or criticised his climb down. While Kent makes himself a tempting target there is good reason to praise his retraction. Cabinet shouldn’t have anything to do with deciding who runs the company.
Ideally, Nalcor should be turned over to the private sector to run. Government should treat it like any other corporation. The next best thing would be to treat Nalcor as the Norwegians would. That is, the whole shooting match should be run at arms length from the politicians in cabinet.
The government’s involvement with the management and direction of the company should be limited to setting some broad strategic goals for it. Appointments to the board ought to be made according to some transparent and entirely apolitical method that takes patronage out of the equation. The Premier shouldn’t chose the chief executive as they do now.
Every single problem with Nalcor exposed over the past five years is the direct result of the way the politicians created the company and then ran it. The results have been catastrophic although only a few people seem to have noticed. The most dramatic sign of the catastrophe has escaped public attention.
In 2012, the government changed a fundamental principle of energy policy in the province that has been there for decades. Consumers are no longer entitled to receive electricity at the lowest possible cost. They are now obliged to pay whatever Nalcor decides or whatever they must pay to compensate for Nalcor’s blunders.
The Conservatives have destroyed independent oversight of the electricity industry in the public interest in favour of a Nigerian style compact between the political rulers and their cronies in the energy corporation. Some facetiously call Ed Martin the real Premier of the province. That seems to be an apt description of the situation. Martin wields extraordinary sway over the crop of politicians in the province. Such is this influence that Martin has been able to pursue his agenda at Nalcor without any intervention from cabinet despite the obvious signs of the company’s considerable financial and management problems.
The next administration should sort out the Nalcor mess very soon after the next election. The very least they ought to do is take an axe to the entire management structure of the company and its subsidiaries complete with their Enron-like interlocking directorates. Toss the lot into the bin for the fetid mess it is. Set the corporation up properly and run it properly at least for a few years until the next crop of politicians takes over.
Unfortunately, there is little sign that will occur. None of the current crop of politicians in the province from any party seem the least bit interested in such issues. They actually support Nalcor and its projects, despite what some of them might these days want you to believe something else. What’s more, opinion leaders across the province have kept their mouths shut no matter how ridiculously unqualified were the folks the Conservatives appointed to the Nalcor board. it took the collapse of the system in darknl for them to sit up and wonder if something might be wrong.
Might be.
Something is wrong with Nalcor both in concept and execution.
It has been that way from the start.
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