Two of Canada’s massive public pension funds are blasting a plan by Magna International Inc. to simplify its share structure and pay the Stronach family US$863 million, wrote Canwest News Service June 3.
Both Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan are expressing outrage at the compensation arrangement and are hoping to draw a line in the corporate sand as a warning to other companies that might be considering similar manoeuvres.
“It’s turning into a bit of a showdown,” said Richard Leblanc, professor of corporate governance and ethics in York’s School of Administrative Studies in the Faculty of Liberal Arts & Professional Studies. “Magna is an incredible success story and there has been wide latitude for past consulting payments made to (board chair Frank) Stronach, but with a premium this large, the eyebrows have been raised…. The (pension plans) are sending an unambiguous message to the market that this is unacceptable,” Leblanc added.
Republished courtesy of YFile– York University’s daily e-bulletin.