On Thursday, March 17 — a day that is all about the green and the blarney — we learned that Scott Balfour, the president and chief executive officer of Emera, took home $8.28 million last year in salary, bonuses, and other benefits.
For comparative purposes, as a CBC report helpfully noted, that’s nearly $500,000 more than he pocketed in 2020 — an increase of 6% in one year.
Not bad, but chump change really when you compare it with how much more Balfour is pocketing today than in his previous job as president of Aecon Group, a publicly-traded Canadian construction company. When he left that job in 2011 to join Emera, he was taking home around $2 million a year.
So, in a country where the average inflation-adjusted hourly wage has hardly changed since the 1970s, Scott Balfour’s annual compensation has increased by 400% in just over a decade (310% adjusted for inflation).
From a Nova Scotia perspective, of course, Emera is not just another private company.
These days, Emera likes to bill itself as “a team of experts focused on safely delivering cleaner, affordable and reliable energy to our customers in Canada, the US and the Caribbean…”
Those of us with longer memories will remember that fancy-pumps Emera was born plain old Nova Scotia Power, a successful publicly-owned provincial electric utility that then-Progressive Conservative Premier Donald Cameron peddled to private investors for what he hoped would be short term gain in 1992.
Although those investors ultimately transformed the utility into an unregulated, publicly traded $32.2 billion holding company, it’s worth noting Emera never did get rid of NSP, the guaranteed-return cash cow that gave it its first life.
So, after the usual corporate bafflegab about its “team of experts” and all that “cleaner, affordable, reliable” hoohah, there is this:
We primarily invest in regulated electric and gas utilities, driving predictable returns and steady growth for our investors, enabling us to reinvest in our teams, our companies and our communities. (The bold face is mine.)
One of Scott Balfour’s numerous corporate hats is as chair of Nova Scotia Power.
So, how’s he done?
Nova Scotia Power recently applied for a rate increase of 10% over the next three years.
Buried deep inside thousands of pages of its application-ese, the company also asked the province’s utility review board to “relax” some of the more than a dozen “performance and customer service benchmarks” it had ordered the company to meet in 2016.
The company didn’t meet six of those benchmarks for the next three years running and was even fined $250,000 in 2019 for its failure.
But it’s kept on failing. Complained the regulator in 2021:
It is concerning to the board that NS Power does not seem to recognize that a fundamental outcome anticipated from establishing the performance standards is to produce continuous improvement in reliability, customer service and storm response.
Nova Scotia Power — keep in mind Emera’s professed devotion to cleaner, affordable and reliable energy — also asked the regulator to create a special new fee it could slap on customers who generate their own “cleaner, affordable and reliable” electricity using solar or wind energy and then sell some back to the power company.
In the face of public outrage after this outrage became public — many saw it as the company’s way to undermine the greening of the grid — Nova Scotia Power shelved that proposal. For now.
But the company still wants also its guaranteed 9% profit margin — plus a sweetener that would allow it to scoop up to a 9.5 % return on equity.
Explained Peter Gregg, the recently appointed president and CEO of Emera’s Nova Scotia Power subsidiary: “We’re not asking for more than we need to run a reliable business,”
Let’s go back to the question. And ask it this way. How’s Scott Balfour doing for Nova Scotia Power customers — us — to justify his compensation package? (And don’t give me that sophistry about how much of his salary comes from NSP and how much from… there’s one umbrella company here.)
Consider Emera’s “compensation philosophy. The purpose of Emera’s executive compensation program,” explains last week’s management information circular, is to:
- align the interests of executives with the interests of Emera’s shareholders and customers; (my emphasis)
- attract, retain and motivate highly qualified and high-performing executives; and
- reward Emera’s executives for sustained growth in shareholder value.
Rate increases, lowering performance standards, squeezing out green energy competitors, maintaining and even increasing the guaranteed profit margin… those do all seem to align neatly with shareholder interest in “sustained growth in shareholder value.”
As my colleague Jennifer Henderson noted:
Although the multinational company that owns Nova Scotia Power and electric and natural gas utilities in Florida, New Mexico, and the Caribbean did not meet its EPS or “Earnings Per Share” objective, every Emera shareholder still saw a 4% increase on last year’s dividend and a TSR (Total Shareholder Return) of 22% on their investment.
Not bad, huh?
Not bad at all. If you’re a shareholder. But increasing shareholder value seems designed to decrease value for Nova Scotia Power’s customers.
Given all of that, with whose interests do you think Emera’s board sees itself aligned?
Sorry, time’s up.
So, here’s a different question. How could Scott Balfour’s compensation package be better spent on… well, let’s start with improving services to the customers of Nova Scotia Power?
There are currently postings for a number of “Maintenance Person Certified (Shift)” at Nova Scotia Power. These are union jobs paying $42.20 an hour. You could hire more than 100 of them with Scott Balfour’s take-home alone. Or, you could get even more bang for your buck by hiring close to 180 also unionized Utility Worker IIs, whose duties include “repair maintenance duties” at $25.37 an hour.
How many of us who have spent hours, often days, waiting for Nova Scotia Power to restore our power after a storm — or even a light breeze — believe $8 million might be better spent than in fluffing up Scott Balfour’s pay packet?
But let’s make this a game anyone can play.
What would you do with Scott Balfour’s $8 million?
Here’s a modest suggestion to start us off. We could buy 720 emergency crisis shelters at $11,500 each to house the homeless. Maybe NSP could throw in free electricity.
What would it cost to have a civil servant running Nova Scotia Power? Maybe $200,000 per year?
How is it worth 8.28 million to run a monopoly?
I would be okay with that if he is actually being taxed on that amount and that money came back to us in government services, I know dream on. Maybe public traded companies should look at salary caps and use the money saved to improve services, products, customer support etc
To answer the question: what would I do with the $8 million:
1. I would give 1/2 to my wife.
2. Pay off our mortgage.
3. Max my TFSA.
4. Max my RRSP.
5. Buy Emera shares with the rest. Make a shareholder proposal to reduce executive compensation. Vote for such a proposal.
Why are bonuses being paid in an industry that operates a monopoly, it is just not this guy at the trough feeding; it is many other men and women at NSP and Emera. This is not new and has gone for decades unchecked unregulated and FULLY Paid by the ratepayers or yes the successive governments of all political stripes have ignored and let them operate. Open up the province to competition and see how well these so called “business executives” perform.
They should be reminded that
Leadership is a privilege to better the lives of others. It is not an opportunity to satisfy personal greed.
Make him pay at least 50% of the $8 M in taxes and direct that money to where it is needed the most – affordable housing, increase income assistance, reduce power rates for those on low incomes.
With so many just trying to keep their heads above water it is criminal what these executives (not just this guy) are being paid.
The worst part is that his whole job is to increase the shareholder value and return … not to serve the public and make sure we have reliable electricity here in NS and wherever else Emera operates.
You cannot buy anything with stock options. A stock option is not a cash expense. Perhaps university professors and lecturers are overpaid; not to mention the many years of paid sabbaticals they take, and not to mention the profs who who remain on the public payroll into their seventies.
That’s not what this discussion is about.