If boards of institutions such as universities and museums find salary caps too restrictive, they should make their case with facts and figures. They shouldn鈥檛 be doing sneaky end-runs around the provincial government鈥檚 guidelines.
The Royal sa国际传媒 Museum board has been chastised for a secret bonus and other benefits that boost CEO Jack Lohman鈥檚 annual compensation above the $200,000 cap set by the province in 2007. As a result, Finance Minister Mike de Jong has docked $53,000 in provincial contributions to the museum, the amount that Lohman鈥檚 package exceeds the spending limit.
Lohman was hired 2 1/2 years ago with a contract that called for a base salary of $161,800, with benefits and pension bringing the total to $197,331. It has now come to light that a supplementary contract gave the CEO a $30,000 signing bonus, an $18,000 relocation allowance for which no receipts were required and up to $5,000 to help with income tax preparation for two years. The secondary contract also included upgrades to business class for three round trips a year to London.
The secondary contract was not mentioned in the mandatory statement of executive compensation submitted to the government in 2013, but was revealed in a report submitted on June 19 to the Public Sector Employers鈥� Council, which regulates and approves executive compensation.
The museum鈥檚 deal has the same flavour as the secret arrangement the Lower Mainland鈥檚 Kwantlen Polytechnic University made to circumvent executive salary caps.
Of the three entities involved in the RBCM case 鈥� Lohman, the museum board and the government 鈥� Lohman is the innocent party. The situation should not reflect badly on him. His credentials are impeccable and world-class, and even with the augmented compensation package, he鈥檚 grossly underpaid. His basic salary is about the same as that of an assistant deputy minister in the sa国际传媒 government. His is a high-profile position; he is entrusted with a priceless provincial resource. He should be paid accordingly.
If we want world-class universities and a world-class museum, we need to pay world-class salaries. The province should provide a mechanism where a board can seek an exemption to the cap, backed by such information as the nature of the position and comparable salaries elsewhere.
The province鈥檚 salary cap appears to be unrealistic, at least in some cases. But it was wrong of the museum board to engage in covert bookkeeping to bypass the limit. That is not befitting an institution of the RBCM鈥檚 stature. It鈥檚 an embarrassment to the museum and likely to Lohman.
More seriously, it has the potential to cast a cloud over the good work the museum does. The museum depends in part on donations, and any hint of impropriety tends to scare off donors.
That the board was acting in the best interests of the museum is not in doubt, nor is the personal integrity of board members. Chairwoman Suromitra Sanatani, who came on after the contract was signed, said the board was advised that the supplementary contract was acceptable.
De Jong says it isn鈥檛 acceptable, and so has penalized the museum for the infraction. The government鈥檚 salary limits reflect British Columbians鈥� growing impatience with oversized public executive paycheques in a time of restraint. Perhaps the rules are too inflexible; perhaps they are unfair and should be adapted to circumstances.
But that should be done in the open. If the rules don鈥檛 seem right, the proper response is not to break the rules, but to work to change them.
