The facts on incentive-based compensation

September 10, 2012, Ottawa

[Addition] On September 13, La Presse published an article by Ewan Sauves entitled Radio-Canada: Bonis en hausse (“Radio-Canada: Bonuses on the rise”) which contained erroneous information about the Corporation’s incentive-based compensation program:
  1. In fact, compensation disbursed under Corporation’s incentive program has decreased this year, down from $10.3 million in 2011 to $9.4 million in 2012. (As explained to La Presse, there remain a small number of outstanding payments to make in 2012. However, the total at year end will remain lower than it was in 2011.)
  2. There are no “bonuses” at CBC/Radio-Canada. What the Corporation includes in the total remuneration of its senior management is incentive-based compensation that may be withheld should performance objectives not be met.

What are “performance bonuses”?

There are no bonuses, or what is often referred to as “performance bonuses”. What the Corporation includes in the total remuneration of its senior management, is incentive-based compensation. This is the “at-risk” portion of the compensation package of eligible senior management that may be withheld – either totally or partially – if performance objectives are not fully met. When hired, eligible managers are informed of the “at-risk” portion of their compensation subject to achieving corporate, component and individual objectives. Similar compensation packages exist in other media organizations.

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Why does the Corporation have incentive-based compensation?

Having an “at-risk” portion included in the compensation of eligible senior management provides an accountability framework that drives the achievement of business results by aligning managers around collaborative achievement of corporate, component and individual results. It is common practice, across both public and private organizations, to tie the variable portion of compensation to performance targets. The Corporation’s compensation of senior management, including the “at-risk” portion, is often below the average of private-sector market comparables. The Corporation must remain competitive in order to attract, recruit and retain its people.

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How much money does the Corporation spend on incentive-based compensation?

The Corporation disbursed $10.3M in incentive-based compensation for 2010-11, as a result of the excellent performance of all of its platforms that year, both in English and French Services. That amount represented about 1% of the Corporation’s total payroll. In August 2012, the Corporation disbursed $9.5M in incentive-based compensation for the year 2011-2012.

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What is the basis for calculating this “at-risk” portion of compensation?

This portion of compensation is calculated from a number of specific metrics such as revenue generation, cost efficiencies, programming distinctiveness and audience share. Targets are set at three different levels – corporation, component, individual – which all have an impact on the final calculation.

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What happens if eligible managers don’t achieve their objectives?

Some or all of the “at-risk” portion of compensation is not paid. As well, managers who have difficulty meeting their performance expectations may ultimately be relieved of their duties.

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Why haven’t you eliminated this type of compensation in light of the Corporation’s financial situation?

The Corporation’s compensation for senior management positions is often below the average of private-sector market comparables. We’ve opted to maintain the program for two reasons: 1) ensure that our compensation packages remain competitive enough to continue to attract, recruit and retain our people; and 2) provide an accountability framework to drive the successful achievement of the Corporation’s annual objectives.

About CBC/Radio-Canada

CBC/Radio-Canada is Canada's national public broadcaster and one of its largest cultural institutions. The Corporation is a leader in reaching Canadians on new platforms and delivers a comprehensive range of radio, television, Internet, and satellite-based services. Deeply rooted in the regions, CBC/Radio-Canada is the only domestic broadcaster to offer diverse regional and cultural perspectives in English, French and eight Aboriginal languages.

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