A question to start the New Year. Is Hunter Harrison really happy? He was born almost 70 years ago in Memphis Tennessee, and he’s had a lot to do with the railway business in Canada.
Until 2009 he ran things at Canadian National. Then he crossed the street and took over as CEO of Canadian Pacific. His total pay package in 2012 was just north of $49 million. That means that good old Hunter earned more before lunch on New Year’s Day than most of us will see in all of 2014.
Executive compensation is one of those issues that comes and goes regularly, but the numbers move in only one direction it seems and that’s up. The average among the top 100 CEO’s in Canada is just under $8 million a year, while the average for the rest of us is just over $46,000.
15 years ago the folks at the top made 105 times what was taken home by the average working stiff. Now it’s more like 171 times higher.
How do we measure value when it comes to CEO’s ? Generally the only yardstick that seems to matter is the return to shareholders in things like dividends. What about service to customers? Isn’t it about time to measure that into the equation? If we did, I wonder what prairie farmers would give Mr. Harrison for the performance of Canadian Pacific in recent months.
Our farmers brought in an astounding harvest this year, but as is often the case, the transportation infrastructure simply has not been able to handle it. Farmers are losing millions in lost sales and demurrage charges, but Hunter Harrison counts his money and clips his coupons, and says nothing about the challenge of moving grain.
Whatever happened to CEO’s like Lee Iacocca? Thiry years ago he rescued Chrysler from bankruptcy, and he did it for a dollar a year. Now that was great value.
I’m Roger Currie