In Part Six of The Orca's series on BC ports, Frank Peebles looks at the captains of the ship - so to speak. The CEOs of BC’s ports are some of the province’s top earners, with Vancouver Fraser Port Authority leading the way.
When it comes to compensation, BC’s port bosses are equally all over the map financially as they are geographically.
There are four ports in this province under the federal umbrella of the Association of Canadian Port Authorities (ACPA): Prince Rupert, Port Alberni, Nanaimo and Vancouver-Fraser. Each organization’s respective financial statement showed a gulf of difference between the wages and benefits for their CEOs.
It shouldn’t be any surprise that the salaries escalate as does the cargo volume of each port, but it might be harder to determine a specific pattern in the overall scale.
In 2020, the Port Authority of Port Alberni paid Zoran Knezevic a total of $212,437, combining salary and a small benefits package.
Next is Nanaimo Port Authority’s Ian Marr at a total of $225,302, almost all of it salary.
A big jump up comes for Shaun Stevenson, president and CEO of the Prince Rupert Port Authority, who takes home $523,000 plus a $10,000 allowance package.
After that, the heights are truly giddy. The Vancouver Fraser Port Authority pays president and CEO Robin Silvester a base salary of $587,000, only marginally higher than Stevenson, but in 2020, additional incentives and benefits topped Silvester up to $1.2-million. (Three others at the Vancouver Fraser Port Authority made $400,000 or more.)
At just over twice the compensation, does the harbour in Vancouver do twice as much business as its Prince Rupert counterpart?
The ports in the Vancouver-Fraser collection combined for a total container business of 3.5-million TEUs in 2020 (a TEU is the equivalent of one standard 20-foot shipping container) while Prince Rupert handled 1.1-million TEUs, or less than one-third of Vancouver’s amount.
Containers are not the only items flowing on and off ships at BC’s ports. Looking at overall cargo volume, Prince Rupert handled 32.45-million tonnes of various commodities. Vancouver, meanwhile, handled 145-million tonnes of cargo in 2020. That’s 54 per cent difference, so that’s closer to an accurate comparison, perhaps.
Then there’s overall revenues generated. Vancouver’s activities amounted to $274-million. Prince Rupert raised $67-million in 2020 – less than a quarter of Vancouver’s amount.
When comparing Silvester’s compensation compared to other port CEOs around North America, it is no easier to distinguish a market value for the position. Montreal is Canada’s second largest harbour facility and eastern Canada’s harbour of choice for international shipping. Recently retired CEO Sylvie Vachon made $513,000 in 2018, according to The MacDonald Notebook, but it’s not clear if extenuating benefits were included or not. The container action for Montreal is 1.6-million TEUs and they moved about 40-million tonnes of cargo last year, generating $116-million in revenues. They are, in some ways, only marginally ahead of Prince Rupert on the national cargo podium.
“There is no ‘typical’ ACPA Port because each port is significantly different from the next, resulting from geographic location, size and economic opportunity,” said Theo van de Kletersteeg in an article for Canadian Sailings, the trade and logistics magazine.
“Moreover, with Vancouver handling some 45 per cent of all Canadian federal ports, and responsible for almost two thirds of the comprehensive income generated by all ACPA ports, Vancouver’s stats swamp everyone else’s.”
Looking south of the border, the largest port in North America is Los Angeles, processing almost 1.6-million TEUs annually. As reported in the Torrance Daily Breeze, Executive Director Gene Seroka was given an apology by the port’s commissioners, in 2021, for going so long without a raise, getting a boost in pay to US$400,000 from the US$354,000 had had been collecting the previous four years. It was not mentioned what he also received in other benefits and expenses, but a substantial bonus package is likely.
So how can the continent’s premier port pay substantially less than even the second and third level ports in Canada? Firstly, the exchange rate translates Seroka’s wage to $494,000 Canadian, getting into the right neighbourhood.
It should also be pointed out that Silvester oversees what was, until recently, three separate port authorities now rolled into one sprawling mega-complex. Los Angeles is busy, but compact. In fact, the second busiest port in North America is right next door, where the Port of Long Beach has its own boss, executive director Mario Cordero, making his own $400,000 salary.
Over on America’s eastern seaboard, the Port Authority of New York & New Jersey is the largest harbour organization, operating more like the Vancouver-Fraser model with multitudes of operations over a large and disconnected area. The NY&NJ has its ports, but also operates several bridges, a railway, bus terminal, five airports (including LaGuardia and John F. Kennedy), and its own 2,000-member police force. It also owns the World Trade Centre site.
Rick Cotton became Executive Director in 2017, with a US$275,000 base salary that year, according to the news service nj.com.
This appears to be a huge underpayment, but three others at the port authority made more than that, the top being the port’s general counsel at US$295,000. The division of authority is widespread, as many of these ancillary entities have their own bosses. The director of aviation at the port authority oversees JFK, LaGuardia and Newark Liberty airports and has an annual salary of US$326,014, according to the Port Authority’s payroll webpage.
The Daily Press of Virginia reported that in 2015, John F. Reinhart, then CEO of the Port of Virginia (fifth largest in the USA) was making US$618,750 annually, plus more than US$200,000 in potential bonuses. By 2018 he was making US$695,427 according to govsalaries.com.
Across Canada, all ACPA ports are, in essence, owned by the federal government but operated by individual port authorities who can do whatever they wish, as long as they comply with the Canada Marine Act and other legislation. Each port authority is run by a board of directors appointed by various interest groups, most notably the different levels of government. They are public-sector entities operating as close to private-sector corporations as any government in this country will allow.
Looking at other Crown corporations in BC for salary comparisons, the all-in compensation (salary, benefits, bonus, etc.) of direct government organizations top out at BC Hydro’s CEO Chris O’Riley at $566,000, UBC’s president and vice-chancellor Santa Ono at $605,000, and Powerex president and CEO Thomas Bechard at about $938,000.
The BC Investment Management Corporation pays their CEO almost $3-million; in fact, seven executives at the BCIMC make at least $1-million and 26 more people there get a salary of at least $500,000.
The BC Securities Commission is paying their CEO $583,000. BC Ferries, Translink and BC Hydro all pay their CEOs close to $450,000. The CEOs of WorkSafeBC and ICBC get just under $400,000.
The Vancouver Airport Authority has not disclosed their CEO’s specific compensation, saying only that it’s in the range of the high $300,000s to the high $500,000s.
When one compares the incomes of B.C.’s port CEOs to the private sector, the value patterns become dizzying. In the year before Covid-19, the CEO of Canadian Tire made just shy of $600,000 in base salary but bonuses and other incentives took Stephen Wetmore to almost $7-million, according to the Canadian Centre for Policy Alternatives. Their 2018 report also calculated the compensation for food distributor Loblaw-George Weston Ltd. was $1-million base and $7.5-million total for each of outgoing and incoming CEOs Pavinter Binning and Galen Weston respectively. The Hudson’s Bay Company paid governor and executive chair Richard Baker a base of $790,000 and all-in total of $7.7-million, while CEO Gerald Storch got $1.6-million base and almost $6-million total. Mining company Teck paid their CEO Donald Lindsay a base of $1.5-million and all-in total of $9.5-million.
As for logistics companies dealing with the Port of Vancouver, the pre-Covid salary of Canadian Pacific Railway CEO Hunter Harrison was just shy of $3-million and total compensation for him was almost $19-million.
That same year, CN Rail paid their outgoing CEO Claude Mongeau $1.5-million base and $11.5-million total compensation, and also paid their incoming CEO Luc Jobin just over $1-million base and $8.3-million total.
Air Canada’s CEO Calin Rovinescu collected $1.4-million in salary and $9-million in total remuneration.
Shipping and stevedoring company DP World paid their CEO Sultan Ahmed Bin Sulayem a remuneration total of US$ 7,413,211 (base and incentives combined) in 2020 while chief financial officer Yuvraj Narayan took home US$2,292,302.
Is any port CEO in BC overpaid or underpaid? It’s hard to say, given so many different factors apply to each facility and its governing body. Obviously each is well paid but has the weight of their respective community’s economy on their shoulders.
Frank Peebles is a veteran magazine and newspaper journalist based in Prince George. He has won numerous awards for his work, including Canadian Community Newspaper Association and BC-Yukon Community Newspaper Association citations.