Transat senior executives miss out on bonuses and wage increases in 2012

MONTREAL – Senior executives of Transat A.T. missed out on cash bonuses and saw their wages frozen in 2012 as the vacation tour company continued to lose money.

The top five officials, including CEO Jean-Marc Eustache, didn’t receive any short-term incentives for a second consecutive year. The incentives included a special bonus established to offset salary freezes and cost of living increases, according to a proxy filing with the securities regulator ahead of its annual meeting March 14.

The special bonus representing four per cent of the base salary was payable if semi-annual financial objectives were met. They weren’t last winter so no money was paid. The objectives were achieved in the summer period but the executives waived the bonuses.

Transat’s (TSX:TRZ.B) executives did benefit from substantially higher option-based awards during the year, although whether those will be paid out depends on the company’s future financial performance.

Wages were frozen in 2012 for all executives and will be again this year except for chief financial officer Denis Petrin, whose salary could increase because of a market comparison done in 2010.

Despite the freeze, Eustache’s potential total compensation increased nearly 12 per cent to $2.08 million, largely as a result of a 32 per cent boost in the value of such option-based awards to nearly $652,000.

And his base salary increased slightly despite the wage freeze to $822,000 because the company’s fiscal year includes two months in 2011. He also received $246,600 in share-based awards, $294,852 in the value of this retirement plan and $65,760 in other compensation.

Transat Canada president Allen Graham’s total compensation was $943,521, up from $700,076 in 2011, a figure that included $400,000 from salary.

The other named executives are Daniel Godbout, senior vice-president transport and revenue management, and Andre de Montigny, president of Transat International.

Transat is cutting costs as it attempts to restore profitability in the face of intense competition for packaged holidays to sun destinations and Europe.

On the Toronto Stock Exchange, Transat’s shares were down 18 cents, or 2.73 per cent, at $6.42 in midday trading Friday.