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6 Oct 2009
Edmonton Journal
LISA SCHMIDT a n d J A S ON F EKETE CALGARY

Execs paid $5M at crown investment firm that lost billions

Alberta’s arm’s-length investment manager paid out more than $5 million in compensation to its top two executives last year, as the agency posted staggering losses in a major market meltdown.
Alberta Investment Management Corp.’ chief executive and chief investment officer received $2.1 million and $3.2 million in compensation, respectively, for the fiscal year ending March 31, 2009, according to Alberta Finance’s annual report released last week.
The crown corporation, known as AIMCo, which oversees $70 billion in provincial savings, employee pensions and endowment funds, lost about 17 per cent on its investments last year. That included a $3-billion drop in the Heritage Fund — the biggest in its history — cutting the value of the fund to $14 billion, its lowest level in four years.
Chief executive Leo de Bever received $2.1 million in salary, benefits and other compensation, including $500,000 in future performance incentives.
The compensation for de Bever — who took the corporation’s reins in August 2008 — included a $1million signing bonus in addition to a salary of $333,000 salary and $125,000 in performance pay.
Chief investment officer Jai Parihar, who announced his retirement in March and also served as interim chief executive for five months, received compensation of $3.1 million. That included a $1.2-million severance and $960,000 employment agreement payout on top of a salary of $470,000. He will also receive $362,000 in deferred incentives.
AIMCo was set up last year by the Stelmach government to increase returns on the province’s holdings. The crown corporation was structured as an arm’s-length entity with its own board of directors to operate like other public-sector investment institutions.
AIMCo chair Charles Baillie, former head of TD Bank, could not immediately be reached Monday evening.
An official with Alberta Finance, the government department that oversees AIMCo, said the dollars paid out to de Bever and other senior brass are in line with salaries and benefits paid to executives in the private sector.
The CEO’s total compensation also reflects a one-time, $1-million signing bonus needed to pry de Bever away from his previous job heading one of Australia’s largest public sector pension funds, as well to compensate him for financial losses incurred by leaving that position, said spokeswoman Robyn Cochrane. “It’s pretty standard for the industry,” Cochrane said of the total compensation.