Society of Energy Professionals

Society of Energy Professionals

June 28, 2005 10:16 ET

Hydro One CEO salary out of line

Attention: Assignment Editor, Business/Financial Editor, Energy Editor, News Editor, Tech/Telecomm Editor TORONTO, ONTARIO--(CCNMatthews - June 28, 2005) - Ontario electricity ratepayers are paying too much for Hydro One's CEO.

That's the conclusion reached by the union representing CEO Tom Parkinson's professional employees. An analysis prepared by union researchers indicates Mr. Parkinson's salary is dramatically higher than those of the CEOs of Hydro-Quebec, Manitoba Hydro, and B.C. Hydro.

"No CEO of a full-service public utility in other provinces makes as much as half a million," said Bill Jones, Executive Vice President of the Society of Energy Professionals. "Why should Ontarians have to pay $1.5 million for a CEO with lesser responsibilities?"

"Mr. Parkinson gets paid more than the CEOs of those three other utilities combined!" he added.

Here are the 2004-5 salaries in question:
- Hydro One's Tom Parkinson: $1.475 million
- Manitoba Hydro's Bob Brennan: $282,124
- B.C. Hydro's Bob Elton: $405,000
- Hydro-Québec's Thierry Vandal: $480,679

"This is all the more astonishing when you consider that Hydro-Quebec is a massive public utility with over $57 billion in assets, whose operations include electricity generation, transmission, and distribution; and natural gas supply and distribution," said Jones. "Hydro One's a very large utility, with $11 billion in assets, but it only does transmission and distribution. You'd think you could get someone to run it for less than half a million, easy."

The analysis also compares the CEO salaries involved with the revenues, assets, and numbers of employees of the utilities involved. In each category, Hydro-Quebec gets a lot more bang for the buck. Their CEO makes about $42,000 for every billion dollars in revenue, while Mr. Parkinson makes $360,000. Mr. Vandal makes a paltry $8,300 per billion dollars of assets, while Mr. Parkinson makes $130,500. Finally, Mr. Vandal makes do with $22,500 for each 1,000 employees he manages, while Mr. Parkinson gets a whopping $372,000 for the same task.

"Nice work if you can get it," said Jones.

Donald Thain, Professor Emeritus of the Ivey School of Business at the University of Western Ontario, says paying the CEO of Hydro One three times as much as the CEO of Hydro-Quebec is a bit of a stretch. "Running Hydro One is a no-brainer," he says.

Professional employees at Hydro One are currently on strike to resist Mr. Parkinson's demand that they accept 11 to 22 per cent in pay cuts, and a two-tier wage system for newly hired employees.

The Society of Energy Professionals represents more than 6,000 professional employees in the electricity industry in Ontario, including engineers, scientists, supervisors, and others. The Society is an affiliate of the International Federation of Professional and Technical Engineers.

-end-

Background facts*:

Number of Society-represented employees eligible to retire in the next six years: approximately 480 (or 80 per year)

Assuming the average yearly salary of a retiring employee is $94,000 the amount (salary only) that will be saved per year over the next six years by replacing retiring employees with newly hired young professionals, if the salary grid were not to rise: $3,400,000 ($6,800,000 the second year, etc.)

Amount that will be saved in the sixth year: $20,000,000 (minus seniority increases)

Amount per year to be saved by paying the same 80 new employees 10 per cent less (as Hydro One's current contract demand stipulates): $400,000

Amount to be saved if the salaries of all management employees of the rank of director and above were to be cut by 10 per cent: $1,400,000

Percentage rise in salaries of top three executive positions in Hydro One since 1996 (compared with equivalent positions in Ontario Hydro, and corrected for inflation): 47

Percentage rise in salaries of Society-represented employees since 1996 (corrected for inflation): 1.5

*All numbers approximate.
/For further information: for further information, please contact Brian Robinson at (416) 716-6438/ IN: ENERGY, LABOUR, TELECOMM

Contact Information

  • Brian Robinson, Communications Officer, Society of Energy Professionals
    Primary Phone: 416-716-6438
    E-mail: brian@society.on.ca