Executive and Board Compensation
It’s paramount that YVR remain an economic generator, a jobs creator and a sustainable and fiscally responsible airport for British Columbia. To ensure YVR remains a global leader, Vancouver Airport Authority has a comprehensive executive compensation program in place. This enables us to remain competitive in the marketplace, attract and retain the calibre of executive required and motivate executives to achieve business results, support the strategic vision and reinforce accountability to our customers and communities.
The targets in the Strategic Plan inform the incentive measures that are core to YVR’s executive compensation program. The key elements to the executive compensation program are base salary and incentive compensation, with short-term (one year) measures that include individual performance objectives and long-term (three year) measures.
The short-term incentive plan measures focus on net operating margin, customer satisfaction, employee engagement, our reputation within the community and operating costs per enplaned passenger. The results are determined based on audited financial information and through surveys conducted by independent, third-party firms.
The long-term incentive plan measures are based on a rolling cycle that measures performance over three years. The measures are based on continued performance in passenger growth, sustainability leadership and a financial management/interest coverage ratio. The incentive plan incorporates the aspirational goal of sustainability leadership compared to other international airports and local organizations. This leadership position is measured by an independent firm. The long-term incentive plan also includes environmental performance measures for reductions in greenhouse gas emissions, water usage and airport waste.
In addition, the Human Resources and Compensation Committee and the Board review the individual objectives set annually for the President & CEO and each executive. Performance on these objectives is part of the short-term incentive award calculation and also influences salary increase decisions.
Executive Compensation Peer Group
To monitor the competitiveness of executive pay levels, Vancouver 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.
Vancouver 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 the compensation of the CEO and the executive team to the Board only after considering market data, recommendations from the CEO on compensation for positions reporting to the CEO and individual and corporate performance objectives.