BCE’s decline was largely the result of investor reaction to its $5-billion acquisition of U.S.-based Ziply Fiber. BCE Inc. headquarters in Montreal on Aug. 3, 2023.Christinne Muschi/The Canadian Press
BCE Inc. BCE-T paid its top executives more than $5-million in bonuses, including nearly $2.4-million to chief executive officer Mirko Bibic, after a year in which its stock dropped 30 per cent, sales and profits declined and the company laid off 4,800 workers.
Despite the large payout, Mr. Bibic’s bonus declined nearly 20 per cent from 2023, leading to an overall drop in pay in 2024. Bonuses for group presidents John Watson and Blaik Kirby – two other executives who were in the same positions both years – declined 14 per cent and 23 per cent, to $792,000 and $711,000, respectively.
Mr. Bibic made $12.82-million in 2024, down from $13.43-million in 2023. Stock awards valued at $8-million made up the bulk of his pay in both years.
Last year was a difficult one for the telecom sector over all, with fierce competition for mobile customers suppressing revenue, high debt levels persisting despite companies’ goals to pay them down and lower immigration reducing future customer growth.
According to S&P Global Market Intelligence, BCE had the worst shareholder return in 2024 of the big three telecom companies, with a decline of 30 per cent, including dividends. Shareholder returns fell 26.1 per cent at Rogers Communications Inc. RCI-B-T and 11.5 per cent at Telus Inc. T-T
BCE’s decline was largely the result of investor reaction to its $5-billion acquisition of U.S.-based Ziply Fiber, and the accompanying pause in annual dividend growth for the first time in 16 years. The company had previously signalled it would use cash it planned to raise from the sale of its $4.7-billion stake in Maple Leaf Sports & Entertainment to Rogers in part to pay down debt, and investors balked at the perceived change in strategy. Both deals have yet to close.
Meanwhile, BCE was carrying more than $40-billion in total debt. Also, it was paying a dividend that cost the company more than it had been earning in free cash flow, prompting calls from analysts to cut it by more than 50 per cent.
In February, 2024, BCE said it was reducing its work force by 4,800 positions, its largest restructuring initiative in nearly 30 years. The telecom blamed a difficult economy, as well as a regulatory requirement to open its network to competitors. The company also told employees it planned to sell 45 of its 103 radio stations. In its third quarter, it posted a $2.1-billion writedown of its media assets, and revised its overall revenue guidance downward.
BCE spokesperson Ellen Murphy said Tuesday there was no change to Mr. Bibic’s target compensation in 2024 “and in light of the challenging year for BCE and the telecommunications industry, his target compensation will continue to be frozen at current levels in 2025.”
Ms. Murphy highlighted the effect of BCE’s performance on Mr. Bibic’s past pay. The company’s stock awards are partially performance-based, and can rise or fall in value depending both on BCE’s stock price and the financial measures used to pay out the awards after a three-year measurement period.
The value of Mr. Bibic’s 2022 stock grant decreased 51 per cent, to $3.7-million from its target value of $7.5 million, she said in an e-mailed response to questions. As of the end of 2024, the 2023 grant was trending to a value of 48 per cent below target, and the 2024 grant was trending to a value of 47 per cent below target.
“The decrease in the value of equity grants from 2022 to 2024 is significantly more than the decrease in total shareholder returns over the vesting periods,” she said.
BCE’s annual bonus depends on financial performance for about 42 per cent of the payout, strategic objectives for about 28 per cent and individual performance for about 30 per cent.
BCE missed its profit target, but paid out a little more than half of the target bonus linked to that measure. The company paid zero for the portion based on revenue growth, as BCE’s sales declined in 2024. The company paid out fully for its target for free cash flow, a measure of cash the company generates from its operations after paying for capital expenditures.
For the company’s six strategic imperatives – which include “engage and invest in our people and create a sustainable future” – the company paid out nearly 100 per cent of the target bonus.
In its proxy circular, BCE said one of Mr. Bibic’s accomplishments was that he “realized labour savings of more than $200-million from work-force restructuring initiatives.”