Doug Ford’s decision to fire Hydro One CEO would cost at least $10.7 million
TORONTO — If elected premier of Ontario in the spring election, Doug Ford says his first act will be to fire the CEO of Hydro One and its board of directors, whom he blames for the rising electricity costs in the province.
The decision, however, would not come cheap.
Hydro One CEO Mayo Schmidt, who earned a $6.2-million salary last year, would be entitled to at least $10.7 million in severance if he were to be removed from his job by the board of directors, according to the company’s annual shareholders report released on March 29.
The severance amount is an estimate based on the assumption Schmidt’s departure occurred on Dec. 31, 2017, which means if the CEO left after that date, the figure would likely be higher.
Ford, a former Toronto city councillor who became leader of Ontario’s opposition Progressive Conservatives last month, vowed Thursday to get rid of the Hydro One leadership as soon as he becomes premier.
“You can take this to the bank, the CEO’s gone and this board is gone,” he told a news conference in Toronto. “When we’re in government, we’re going to put an end to the hydro executives getting rich off the taxpayers of this great province.”
The populist politician’s anti-elitist message resonates with many voters, especially in rural Ontario, who are angry at the Liberal government about the skyrocketing price of hydro.
“We need to start respecting the taxpayers,” Ford said. “We need to start putting money back into their pocket.”
Shortly after Ford’s remarks, Tory energy critic Todd Smith acknowledged that the Ontario government does not have the direct ability to dismiss the Hydro One CEO.
The government has put a process in place that allows it to control or replace the company’s board of directors, and only the board can fire the CEO.
Hydro One was partially privatized in November 2015, with the province saying it planned to use the sale of shares to fund transit and infrastructure projects. By December 2017, the province had sold off 53 per cent of its stake in the company.
The decision has come under a lot of criticism, including from the province’s fiscal watchdog, who said earlier this year that taxpayers would have saved $1.8 billion if the government had taken on traditional debt to fund infrastructure projects instead of partially privatizing Hydro One, which has over $25 billion in assets and annual revenues of nearly $6 billion.
Hydro One, which is Ontario’s largest electricity transmission and distribution provider, said Thursday that it will not engage in politics. However, it said its customers “deserve” to know the facts.
“We have heard the feedback from our customers and the regulator about executive compensation,” the company said in a statement. “That’s why we decided earlier this year that customers will only pay for the CEO’s salary as it was at the time of the IPO.”
Hydro One customers pay only two cents on their monthly bill for the CEO’s compensation, the company said, adding that nearly 80 per cent of the total executive compensation package is paid for by shareholders.
Energy Minister Glenn Thibeault said Ford’s plan will do nothing to address the actual issue of keeping hydro rates low, comparing his statement Thursday to the rhetoric and actions of U.S. President Donald Trump.
“The only plan we’ve heard from Doug Ford so far is firing people and laying off people,” Thibeault said. “What I’m seeing a very strong prevalence to is the person running the White House. He’s ben doing a lot of firing as well and that’s not been working out so well for them.”
Ontario’s election is set for June 7.