By Cassidy Olivier, Postmedia NewsDecember 6, 2011
VANCOUVER — BC Ferries has tapped its second-in-command to succeed outgoing president and CEO David Hahn, who announced his resignation earlier this year under a cloud of criticism for his $1-million salary.
Michael J. Corrigan, a nine-year veteran who has served as BC Ferries’ vice-president and chief operating officer since 2006, will be paid $563,000 per year for five years, about 60 per cent of what his former boss made, when he assumes Hahn’s duties Jan. 1.
BC Ferries chairman Donald Hayes said Tuesday that he’s confident Corrigan, who was drafted by the Detroit Red Wings in 1980 but never played in the National Hockey League, will steer the corporation in the right direction at a time of record low ridership and projected losses in the tens of millions of dollars.
“I think Mr. Corrigan is completely up to the challenge,” said Hayes. “There is no other candidate with the familiarity and in-depth understanding of the very complex ferry operation.”
Hahn announced his resignation in September, some 15 months before his contract was set to expire, as part of a sweeping cost-savings program aimed a slashing expenditures by $11 million. His last day is Dec. 31.
Included in the cost savings is the phasing out of the long-term bonus program for senior executives, which this year saw executives earn a total of $500,000. Before the program is cancelled, however, Corrigan and three other executives will divide a one-time payment of $788,000 to “facilitate this action,” said Hayes.
BC Ferries expects to save $300,000 per year by eliminating the long-term bonus program. And to achieve further reductions, Corrigan said one of his first moves will be to eliminate his old position of chief operating officer, which amounts to savings of about $600,000 per year.
“I am looking forward to working with the provincial government, the BC Ferry Commission and ferry dependent communities on achieving outcomes for everybody,” Corrigan said in a prepared statement. “We need a coastal ferry system that is safe, reliable and affordable.”
Provincial Transportation Minister Blair Lekstrom acknowledged that Corrigan’s salary reduction, mandated by recent government legislation aimed at bringing compensation levels back to those in the public sector, will not be enough to satisfy some of the critics still stewing over Hahn’s lucrative paycheque.
“I’m sure there will be concerns from the public expressed about the amount of salary, but it does meet the requirements in the changes we made,” he said, adding he shares some of that concern. “But it is certainly a considerable step in the right direction to bring it more in line.”
NDP Opposition BC Ferries critic Gary Coons, however, said the only reason the pay was brought down was because the government had made it law, not because there was a recognized need for change.
“I really don’t think a change in the CEO position will solve the problems,” he said. “There is still no long-term vision, no long-term plan for BC Ferries.”