Pearson making (too much?) money

[dagger]

http://www.newswire.ca/news-releases/gtaa-reports-2015-third-quarter-results-strong-passenger-growth-continues-at-toronto-pearson-543873852.html

I would expect another round of fee reductions if this keeps up. Yes, the last quarter was peak, but it sounds like the airport is making a sustainable $50m a year in net profit.

TORONTO, Nov. 9, 2015 /CNW/ - The Greater Toronto Airports Authority (the "GTAA") today reported its financial and operating results for the three- and nine-month periods ended September 30, 2015. Passenger volumes continued to grow during the third quarter of 2015 reflecting both the economic strength of the Greater Toronto Region, and the role of Toronto Pearson as Canada's largest airport and North America's second busiest airport in terms of international passengers.

"As the Southern Ontario region continues to grow, and more passengers travel through Toronto Pearson as their preferred global gateway, we are seeing demands for air travel increasing," said Howard Eng, President and CEO of the GTAA. "Our role is to work with all stakeholders to ensure that we support the demands of our passengers today, and also to work together to discuss long term planning for a regional strategy that considers the reality of travel demand in the next 20 years."

A total of 31.4 million passengers travelled through Toronto Pearson International Airport in the first nine months of 2015, a 6.9 per cent increase compared to the same period in 2014. During the nine-month period ended September 30, 2015, passenger activity in the international sector (which includes US transborder) increased by 8.2 per cent and the domestic sector by 4.7 per cent, over the same period in 2014.

For the three- and nine-month periods ended September 30, 2015, the GTAA reported total revenues of $325.2 million and $902.7 million, representing improvements of $18.1 million and $34.1 million from the same periods in 2014, respectively. The continued growth in non-aeronautical revenue in the retail and food and beverage sectors reflects the success of the GTAA's commercial redevelopment program. During the first nine months of 2015, there were 17 new store openings including eight stores in Terminal 1 and nine stores in Terminal 3.

Total operating expenses during the quarter ended September 30, 2015 were $192.6 million, a $16.7 million increase when compared to the third quarter of 2014. During the first nine months of 2015, total operating expenses were $567.8 million, a $29.9 million increase when compared to the first nine months of 2014. The GTAA has hired additional personnel in the third quarter of 2015 in its De-icing Operations in order to ensure safety, on-time departures and improve the customer service. In addition, the GTAA continued to enhance the customer experience by providing free use of baggage carts to passengers and by investing in preventative maintenance and additional airport security. Earnings before interest and financing costs were $132.6 million and $334.9 million for the three- and nine-month periods ended September 30, 2015, respectively. After accounting for interest and financing costs, the GTAA recorded net income of $44.3 million for the third quarter and $65.1 million for the first nine months of 2015, compared to net income of $36.8 millionfor the third quarter and a net loss of $36.2 million for the first nine months of 2014.

[boestar]

Nah....They will just give everyone a big fat raise

[AAS]

Check SEDAR. http://www.sedar.com

It would appear that the CEO had an increase in total compensation from 2013 to 2014 of around 32%.

1.17 million a year compensation in 2014.

[DEFCON]

Of course the CEO of a not-for-profit deserves a 32% raise to keep up with inflation...right? What kind of genius does this person bring to the equation that they can command 1.7M? I think it's just more of the same...the management charade continues.

[mo32a]

Nah....They will just give everyone a big fat raise

Isn't that what you want Air Canada to do when it makes money? Or should they reduce fares instead?

[boestar]

No. Fair Pay for honest days work. if the airline makes a profit then invest that money back into the airline and set some aside for profit sharing. These guys need to realize that it is not the CEO that keeps the place running it is everyone else from the guy that mops the bathroom the the guy turning wrenches to the guy tossing bags to the FA tossing cookies and the Pilot driving the plane to its destination. All of that will happen whether the CEO is at his desk or not.

The world has totally lost sight of reality when it comes to Compensation. There is no more of the aforementioned honest days pay for an honest days work.

Now it is Pay the suit as much as possible so the old boys can share the wealth.

[inchman]

It may seem unfair, but that's the way it is and I don't see it changing soon. The shareholders, through the board of directors, determines the President's compensation. Shareholders are willing to pay for the guys at the top who will perform. And a CEO's pay is a purely negotiated amount.

If you took 7 of Calin's 8 million and split it among all of the employees at AC, it works out to less than $25 per month per employee. I don't see how reducing his pay would provide any great benefit to the troops.

From a CEO perspective, 1.7 mil for CYYZ's CEO or even Calin's 7.8 mil isn't very much. At 7.8 Calin is 49th in Canada. And his base pay is only 1.4.... the company has to perform to make the uplift.

Any one of us could have attempted to do the things, done the school, done the internships, continuously learned, positioned ourselves and made the sacrifices that it would take to become a CEO. It was clear 30 or 40 years ago that that was where the money was... why didn't you or I do it... either not enough skill or not enough drive. And today a CEO is on call 7 days a week... not regulated by rules in a contract. With no job protection.

The fact that you or I were/are unwilling to make those sacrifices, either back then or today, results in our lot in life. It's the same thing when flight attendants complain about their pay relative to pilots.

And, in the greatest irony of this, the subject of sports stars' or movie stars' salaries never gets raised when this subject comes up. Why should Phaneuf or Kidman make as much money as they do?

The fact is that they simply can. The same applies to execs.

[j.k.]

True, it was clear years ago that being an executive equated to a big paycheque - but nothing like where it has gone.

Average CEO pay increases have outpaced even the stock market in the past 30 to 40 years. All the while pay for the average individual, adjusted for inflation has stagnated.

[inchman]

The Economic Policy Institute is a labour based lobby group in the US, so right off the bat, it doesn't apply to Canada, where employment standards are significantly higher. And clearly they are going to skew the data to underline their lobby point, which is the plight of the worker.

Using a stock market index against dollars is another one of those invalid comparisons. Beyond that, they are comparing a very-low end "typical worker pay" to, I'm sure, the pay of the top paid CEOs in an environment where we went from a manufacturing economy to an economy where vertical market (dot.com) is a LARGE component of a relatively small number of CEOs... some of these people (Bill Gates) were making over a billion dollars a year.

I would be interested in knowing who they use as a "typical" worker. I would suggest that they don't include many technically trained people or IT professionals. I dare anyone on this board to say that they are only making 10% more today than they were in 1980. If you are, you are an idiot for staying in your job. the CPI is up 37% since 1998.

I also don't see any 50% dips in the worker pay when the **bleep** hits the fan either (not that CEOs are necessarily hurting).

For Canada's TOP CEO's, the average compensation (if we take Gerry Schwartz out the equation) was about 9 million dollars last year. If we compare that to minimum wage of $22,000, they make 400 times as much as the minimum wage worker. But I would suggest that very few of them head companies where most of the employees make minimum wage.

If we turn it around a bit, and go back to Air Canada... total employee compensation (2013) was about $2 billion. If we assume that CR's compensation was the same in that year as 2014, his compensation was 0.4% of total employee compensation. Air Canada's revenue was about $12 billion. His total compensation was 0.066% of total revenues.

There's no question that CEO's make lots of money, but if you're jealous of someone's pay, then get their job.

[deicer]

Just because it's legal, doesn't make it right.

[cavok]

I find it funny that we're talking about people being overcompensated in a forum dominated by airline pilots.

Rightly or wrongly, many people think senior airline pilots at major carriers are overpaid in light of the automation in place and the safety record of the industry. Of course, as pilots would likely say in their defence, those people simply don't understand the compensation model. They don't know what why the compensation is the way it is.

I suppose the same could be said of the salary of CEOs... Perhaps you folks simply don't understand the market driven compensation model at work here, how could you... it's not like you're pilots CEO's yourselves.

A final thought: A typical CEO has the ability to cause many $millions worth of financial impact as a result of poor decisions and poor planning. Perhaps, like pilots, they're paid for what they know and/or their proven abilities rather than what they do day-to-day.

[conehead]

Why should Phaneuf or Kidman make as much money as they do?

.

Well, you're certainly right about Phaneuf!

[DEFCON]

It's not that the Hollywood elite make too much for my liking, it's the fact that so many people believe that every word, or thought uttered by them is divinely inspired, Quentin Tarantino's recent anti-cop rant for example.