Dave Chan/The Globe and Mail
Shaw Communications Inc. chief executive officer Bradley Shaw saw his pay jump by millions of dollars in what could be the cable, telecom and wireless provider’s final full year as a public company.
Shaw, which has agreed to a takeover by Rogers Communications Inc., paid Mr. Shaw $11.94-million in its fiscal 2021, which ended Aug. 31, up from $6.87-million in the prior year.
About $3.3-million of the jump is because of a quirk in pension accounting. But Shaw also boosted his bonus to $6.12-million, from $5.27-million in the prior year, and gave him stock awards worth $2.88-million, up from $1.92-million in fiscal 2020.
Mr. Shaw also has what may be the most lucrative executive pension in Canada: Shaw estimated its value at $134.7-million as of Aug. 31.
Canadian companies set new record for value of merger-and-acquisition deals
Rogers plans to acquire Shaw for $26-billion including debt. The deal would combine two of the country’s largest cable operations and reduce the number of major wireless players from four to three in Ontario, Alberta and British Columbia. It requires approval from by the Competition Bureau; Innovation, Science and Economic Development Canada (ISED); and the Canadian Radio-television and Telecommunications Commission.
Mr. Shaw told regulators last month the Calgary-based company needs deep-pocketed Rogers to help it deliver 5G wireless services – an endeavour that will require billions of investment by the industry. “Simply put, Shaw cannot do it alone. We need the scale, strength and resources of the combined Shaw and Rogers assets,” he said.
Rogers has said it expects the deal to close in the first half of 2022.
In its proxy circular to shareholders, Shaw highlighted how its adjusted EBITDA – or earnings before interest, depreciation and amortization – grew by 4.6 per cent and its free cash flow, a measure of cash generation, was $961-million. (It was $747-million in the prior year, according to Shaw’s annual report.) The company also returned more than $930-million to shareholders via dividends and share buybacks, the circular said.
Shaw said it paid out the maximum possible cash bonuses for meeting its two corporate goals of adjusted EBITDA and free cash flow, but it did not say what those goals were. The two metrics remained the same from the prior year, when Shaw dropped goals for revenue growth from its bonus formula in midyear in response to the COVID-19 pandemic.
“Despite the significant uncertainty over the last 18 months, we stayed focused on our near-term priorities, including balanced and profitable results,” the company said in the compensation report contained in its proxy circular.
Company performance makes up 80 per cent of Mr. Shaw’s annual cash bonus and 60 per cent for other executives. Shaw also does not disclose the target bonuses for its executives.
Shaw said it gave Mr. Shaw $750,000 in extra compensation, paid in stock awards, for taking over the executive chair job previously held by his father, who died in 2020.
When Mr. Shaw made $6.87-million in 2020, a quirk in pension accounting subtracted $2.77-million from his total pay. He had a $2-million salary, $1.92-million in stock awards and $458,033 in other compensation aside from his $5.27-million bonus. Mr. Shaw made $12.1-million in fiscal 2019.
In 2021, Shaw estimated Mr. Shaw’s pension compensation at $518,210, a swing of nearly $3.3-million from the 2020 disclosure.
The annual pension compensation figure Shaw and other companies report in the disclosure required by regulators isn’t cash given directly to executives that year. It’s an estimate of how much executives’ pensions have grown – or, in rare cases, shrunk – based on their earnings or other pension plan changes during the year.
With files from Alexandra Posadzki.
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Dave Chan/The Globe and Mail