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Pierre Beaudoin is stepping down as chairman of Bombardier, bowing to shareholder anger over executive pay at the Canadian plane and train maker.
Mr Beaudoin, a member of the family that founded the company and that still controls it through multiple voting shares, will be leaving his position at the end of June, the company said on Thursday. He will remain as non-executive chairman of the company’s board however.
The news comes as Bombardier is facing a shareholder revolt over corporate governance and executive pay, with several big institutional investors calling for the removal of Mr Beaudoin at the company’s annual general meeting that is scheduled to kick off later this morning.
Their revolt was provoked by a controversial move in March to award big pay rises to top executives on the heels of a government decision to give the company C$372.5m in government support.
It is not clear if Mr Beaudoin’s new role will be enough of a change to appease shareholders such as the Canada Pension Plan Investment Board and the Caisse de Depot et Placement du Quebec, which has criticised Bombardier for lacking a “fully independent” chairman
In a statement, Mr Beaudoin said:
This change reflects the very successful transition of Bombardier’s executive leadership to Alain over the past two years. As Chairman I look forward to working with the Board of Directors to provide continuing support to Alain and the leadership team. The Company is firmly on the right path, with a very strong leadership team now in place to execute its turnaround plan and return Bombardier to long-term, sustainable growth.
The change to Mr Beaudoin’s position still needs to be approved by the board. It was announced alongside Bombardier’s first quarter results.
For the three months to end of March, revenues fell 9 per cent to $3.576bn, far weaker than the $3.85bn that the market was expecting, amid sharp drops across its three aviation related businesses: business aircraft, commercial aircraft and aerostructures and engineering services.
Net losses narrowed to $31m, compared to the $138m recorded in the prior year period. Adjusted net income at $2m, or zero cents per share, was better than a loss of $30m, or 1 cents per share, that analysts had forecast.