CAAT is a multiemployer pension plan that serves Ontario’s colleges and more than 800 public- and private-sector employers.Merle Robillard/The Globe and Mail
The chief executive of the $23-billion CAAT Pension Plan received a $1.6-million vacation payment despite internal company guidelines that limit how much vacation time employees can carry over or have paid out, according to sources with knowledge of the policy.
CAAT’s board of trustees approved the payout to CEO Derek Dobson last year as a one-time reimbursement for vacation days he accumulated over multiple years, raising questions about whether the board’s leaders followed a rigorous process in granting the payment.
Internal human-resources guidelines that are part of CAAT’s policies state that vacation time must be used within one year after the year in which it was earned, or it will be forfeited, according to two sources and company documents reviewed by The Globe and Mail.
The number of vacation days that can be paid out at an employee’s request is capped at five days each year – or one working week – and is subject to approval from senior managers.
The Globe and Mail is not identifying the sources because they are not authorized to discuss the matter.
CEO’s payout, workplace relationship spur upheaval at Ontario pension plan
The payment to Mr. Dobson is one of the concerns about CAAT’s governance that have led to multiple investigations into the board’s oversight of company leadership. Those concerns do not appear to relate to CAAT’s investment performance, solvency or ability to pay pensions. There are also questions about a personal relationship that Mr. Dobson has been having with a CAAT employee for more than a year, with the board’s approval.
Three of the plan’s top executives abruptly left CAAT in January after they warned board members that they had lost faith in Mr. Dobson’s leadership, three sources said.
The fallout cost CAAT’s board chair his job this week. Don Smith was formally removed from the board by representatives of the Ontario Public Service Employees Union (OPSEU), the labour group that appoints a number of the pension plan’s trustees.
CAAT spokesperson Stephen Hewitt repeated an earlier statement to The Globe that the pension plan’s board is “aware of concerns that have been raised with respect to vacation payments made to our CEO.” And he reiterated that the board commissioned an external expert in December to conduct a governance review, which “is in advanced stages.”
“If changes are recommended to align with best practices, the board will consider them,” the statement said.
The $1.6-million payout appears to be at odds with CAAT’s vacation guidelines, which also state that an employee who has worked at the company for more than one year is required to take at least 10 days of vacation in each calendar year, according to the documents.
Mr. Hewitt did not address the internal guidelines directly but said in his statement that, “The CEO has an employment contract, which governs his compensation and benefits.”
Three senior executives resign from CAAT pension plan
It was Mr. Dobson’s third such payout, including a previous payment in 2019, two of the sources said. He has been CAAT’s CEO since 2009.
Mr. Dobson was on vacation in the Caribbean when The Globe first reported details of upheaval at the pension plan on Monday but cut his trip short and flew home on Tuesday, another source said.
Before Mr. Smith was removed from CAAT’s board, he had been suspended from his role by OPSEU. On Monday, CAAT said in a statement that Mr. Smith was still acting as chair despite his suspension, creating uncertainty around board leadership. Within days, OPSEU representatives on CAAT’s sponsors’ committee formally revoked his appointment.
The sponsors’ committee is an eight-member group that represents the interests of the plan’s employers and members. CAAT is a multiemployer pension plan that serves Ontario’s colleges and more than 800 public- and private-sector employers. It has a total of about 125,000 members.
A co-chair of CAAT’s sponsors’ committee, Darryl Bedford, confirmed that Mr. Smith has been removed from the board, but declined to comment further when reached by telephone.
CAAT’s Mr. Hewitt also confirmed in an e-mail that OPSEU’s sponsors’ committee members “have removed Don Smith as a trustee of the CAAT board of trustees.”
The CAAT board “will appoint a new chair at its meeting later this month,” he added.
The provincial pensions regulator, the Financial Services Regulatory Authority of Ontario, is examining issues related to CAAT and whether there were governance failures. And OPSEU has said it is investigating concerns that the board’s chair and vice-chair “may have acted outside the policies and procedures of the plan.”
The vice-chair of CAAT’s board, Kareen Stangherlin, is also under pressure.
Ms. Stangherlin was appointed to the board by the College Employer Council (CEC), which serves Ontario’s publicly funded colleges and bargains on their behalf in contract negotiations with unionized staff. In an OPSEU statement released Wednesday, the union called for the CEC to conduct its own investigation into Stangherlin’s actions as vice-chair.
The CEO of the CEC, Graham Lloyd, said he is aware that CAAT has a continuing internal review by an external expert.
“We respect and encourage that process and once that’s completed, we will be in a better position to assess what’s happening,” he said in an interview.
OPSEU spokesperson Aidan McNally said in a statement that the union has not yet had a response from the CEC.
Editor’s note: This article has been updated to correct the surname of OPSEU spokesperson Aidan McNally.