Bombardier stocks (TSX:BBD.B) jumped over 8.29 per cent Thursday morning after Pierre Beaudoin, the scion of the family that controls Bombardier, announced that he is relinquishing his role as executive chairman.
Beaudoin will step down from the position at the Montreal-based plane and train making company as of June 30 but will remain non-executive chairman of the board of directors, Bombardier announced just hours before the start of its annual shareholder meeting.
Alain Bellemare, who replaced Beaudoin as CEO in 2015, will remain in place as chief executive officer.
“This change reflects the very successful transition of Bombardier’s executive leadership to Alain over the past two years,” Beaudoin said in a statement.
“As chairman I look forward to working with the board of directors to provide continuing support to Alain and the leadership team. The company is firmly on the right path, with a very strong leadership team now in place to execute its turnaround plan and return Bombardier to long-term, sustainable growth.”
Beaudoin, who is the grandson of Bombardier founder Armand Bombardier, was re-elected to the board of directors with 92.32 per cent of votes, later Thursday morning, despite opposition from five of Canada’s largest pension fund managers along with several large American institutional investors.
The downgrading of Beaudoin’s functions came following an outpouring of shareholder dissatisfaction over the company’s leadership at the executive level and protests over the executive pay after Bombardier had proposed to award Beaudoin and its top five executives compensation hikes of nearly 50 per cent.
Amid growing public anger over the pay increases even as the company was forced ask federal and provincial assistance to bankroll its operations, Beaudoin was forced to renounce the increases and other executives postponed the compensation plan by a year until 2020.
The announcement Thursday coincided with the release of first-quarter results that showed revenue was down nine per cent to US$3.58 billion for the three-month period ending March 31. Losses were US$31 million or two cents per share, down from US$138 million or seven cents per share.
“We feel very good about where we are,” Bellemare told analysts during a conference call.
He warned, however, that an anti-dumping complaint from Boeing alleging Bombardier has sold its CSeries passenger jet in the U.S. below cost could have ramifications for the American and Canadian economies. Bombardier has said the company complies with the laws and regulations in countries where it operates.
“Much of the content on the CSeries is sourced from companies and suppliers in the U.S., making Boeing’s position a direct threat to the high-scale, well-paying jobs in the U.S. and in Canada,” he said.
With files from The Canadian Press
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