AbitibiBowater defends bonuses, closures to Commons committee
September 14, 2010 By Pulp & Paper Canada
AbitibiBowater’s chief executive has defended the company’s decision to reward 50 executives with a combined $…
AbitibiBowater’s chief executive has defended the company’s decision to reward 50 executives with a combined $6 million in bonuses for their work on restructuring the newspaper giant, the Canadian Press reports.
Union leaders at the insolvent Montreal-based paper maker have reportedly been critical of the plan, which is slated to be reviewed by the company’s new board even though the current board and the unsecured creditors committee have already given it the green light.
“Reinstated short- and long-term incentive compensation programs and success bonuses are consistent with a competitive marketplace and are necessary to attract and retain our management ranks,” president and CEO David Paterson told a House of Commons committee on Sept. 10.
The $6 million is to be distributed among 50 senior managers and executives deemed critical to the profitability and reorganization of the company.
The Standing Committee on Industry, Science and Technology is reviewing AbitibiBowater’s decision to permanently close paper mills in Gatineau and Dolbeau-Mistassini, Que. CP reports that the mills employed 570 workers before production first ceased in Dolbeau in June 2009, followed by Gatineau last April.
According to CP, Paterson told the committee that it will not reopen the Gatineau facility. The Dolbeau mill could reopen if a deal is reached with energy company Boralex, which provides power to the mill. However, Paterson noted that no negotiations are currently taking place.
Another Canadian facility, likely in Quebec, would have to close if Dolbeau were reopened, he added.
Paterson said all employees, including management, have made concessions to support the company, which has lost more than 400 management positions through resignations and retirements.
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