Ontario Power Generation
OPG's Commitment to Openness and Accountability
A Message from The Honourable Jake Epp, Chair of the Board of Directors
October 2009
The appointment of the CEO and establishment of appropriate compensation is the accountability of the Board of Directors. In 2008, in preparation for the retirement of OPG’s President and Chief Executive Officer, Jim Hankinson and the retirement of OPG Chief Operating Officer, Pierre Charlebois, the OPG Board of Directors engaged the executive search firm, Russell Reynolds to search for a new President and CEO.
After an extensive international search, the board selected OPG's Chief Nuclear Officer, Mr. Tom Mitchell. Given Mr. Mitchell's extensive experience, we also decided not to fill the COO vacancy. Mr. Mitchell agreed to fill both the President and CEO role and assume the COO responsibilities.
The compensation level in his employment contract was significantly less than the previous CEO and below the benchmarked 50th percentile of an equal mix of private and public comparator companies.
Given the size, scope and complexity of Mr. Mitchell's accountabilities, I believe his compensation package represents excellent value for money. And, given his strong technical and leadership skills, the people of Ontario can rest assured that OPG will continue to produce safe and reliable power.
The Honourable Jake Epp
A Message from Tom Mitchell, President and CEO
October 2009
As a public power business, OPG believes that “value for money”, “cost efficiency”, “performance”, and “accountability” are essential to good business. Our commitment to accountability includes developing clear and ethical policies and guidelines when it comes to spending money. Accountability also means being open and transparent. That is why I decided to take this unique step of publicly posting information regarding my salary and business expenses well in advance of the formal disclosure requirements.
Tom Mitchell
Tom Mitchell's Compensation Effective July 1, 2009
Effective July 1, 2009 Mr. Mitchell accepted the position of OPG President and CEO. His annual salary in the position was set at $800,000 and will be prorated for the period July1-December 31, 2009. Mr. Mitchell also has an opportunity to earn an annual incentive up to 100% of his salary if he meets target performance.
His base salary is reviewed annually by the Board of Directors.
Mr. Mitchell’s Award for performance will be based on the Board’s assessment of his performance against the Company’s achievement of annual financial and non-financial goals. The company’s goals are set out in the Corporate Scorecard. Each of the strategic objectives is backed up by a Board approved detailed performance measurement scale.
2009 Expenses
Tom Mitchell, Chief Nuclear Officer (January 1, 2009 to June 30, 2009)
Tom Mitchell, President & CEO (July 1, 2009 to September 30, 2009)
Paid Business Expenses for the Period January 1, 2009 to September 30, 2009
Summary by Expense Type
|
Amount |
|
|
Airfare and Other Transportation (Note 1) |
$15,893 |
|
Hotel |
$3,023 |
|
Meetings and Recognition |
$4,265 |
|
Meals |
$513 |
|
Telecommunications |
$3,005 |
|
General and Other (Note 2) |
$1,103 |
Note 1: This includes pre booking for a World Association of Nuclear Operators meeting in February 2010.
Note 2: Mr. Mitchell's General and Other expenses were comprised primarily of conference fees for the 2009 Canadian Nuclear Association Conference and Trade Show - $525 and the Canadian Nuclear Society Conference - $340.
2009 Corporate Scorecard
Click here to download the 2009 Corporate Scorecard (PDF).
Compensation Governance
OPG maintains a compensation philosophy that is designed to ensure that it attracts and retains key talent in a highly specialized and technical industry that is facing increasing competition for resources. In addition, the OPG Board of Directors follows best practices when dealing with compensation. There is a six member Compensation and Human Resources Committee (CHRC) of the Board.
The current Committee members are former and seasoned CEO’s and Senior Executives of large, complex multi-national corporations including international nuclear companies, each of whom brings considerable financial and human resources experience to the Committee. The Committee is responsible to oversee all significant compensation matters including:
- Reviewing compensation structures, decisions, and payouts (base pay, incentive, etc), and ensuring the link between pay & performance;
- Reviewing annually and approving changes, as appropriate, to OPG compensation, including compensation principles, and objectives for total compensation, desired competitive positioning and comparator groups;
- Ensuring that executive compensation levels and performance targets are consistent with the Board’s compensation philosophy and aligned with and designed to achieve OPG’s strategic and operating objectives;
- Overseeing senior executive pay as it relates to corporate governance, including total compensation, individual contract provisions on senior executive employment offers, plus severance agreements.
The Committee reviews management recommendations and makes recommendations to the full Board for approval. The Committee meets at least 4 times per year, has full access to management and company data, and has hired an independent Compensation Advisor (Towers Watson). In addition, the CHRC receives independent legal advice from the law firm of Hicks Morley on employment law.
OPG continues to enhance compensation transparency by providing compensation disclosure annually through the Public Sector Salary Disclosure Act.
OPG's executive compensation disclosure is available on opg.com under Investor Relations > Regulatory Filings, and filed with Sedar.
