Executive Compensation Peer Group
To monitor the competitiveness of executive pay levels, the Airport Authority is compared to three peer groups:
- Canadian airport authorities and, for reference purposes, international airports of comparable size in the U.S., Europe and Australia;
- Canadian organizations in industries where skillsets for executive-level jobs are similar including transportation, utilities, communications, engineering, construction and commercial real estate industries;
- Canadian organizations with similar ownership including privately held or subsidiary organizations from a wide range of industries.
The Airport Authority targets compensation at the median of the peer group with the opportunity for pay to exceed median when individual and corporate performance exceed expectations.
Executive Compensation Review Process
The Human Resources and Compensation Committee retains an independent compensation consultant, Mercer, to provide market compensation data, assistance with incentive plan design and information on trends in executive pay. The Committee recommends to the Board the compensation of the CEO and the executive team only after considering market data, recommendations from the CEO on compensation for positions reporting to the CEO and individual and corporate performance objectives.
The salary range for the President & CEO is $388,000 to $582,000, with a midpoint of $485,000. The salary range for the Senior Vice President is $260,000 to $390,000, with a midpoint of $325,000. For Vice Presidents the salary range is $188,000 to $282,000, with a midpoint of $235,000.
All executives participate in the short-term incentive plan. Under the short-term plan, the President & CEO has a target opportunity of 50 per cent of base salary and a maximum opportunity of 75 per cent of base salary; and the Senior Vice President and Vice Presidents have a target opportunity of 30 per cent of base salary and a maximum opportunity of 45 per cent of base salary.
All executives also participate in the long-term incentive plan. This plan has a target opportunity of 45 per cent of base salary and a maximum opportunity of 90 per cent of base salary for the President & CEO and Senior Vice President. The long-term incentive program for Vice Presidents has a target opportunity of 30 per cent of base salary and a maximum opportunity of 60 per cent of base salary.
Under both the short and long-term incentive programs, actual performance results measured against the various metrics determine the magnitude of the payouts. If performance objectives are not met, no incentives would be paid.
In 2016, the average base salary increase for executives was 2.3 per cent, along with other adjustments to increase salaries further within the salary range for certain executives to reflect development in their role. In addition to the programs described above, the executives participate in standard health and retirement programs.