NB Power executives and board members are hoping to extinguish the firestorm that ignited over reports of secret bonuses and retroactive pay increases last month, they could call a public relations expert to understand what went wrong.


Or they could call an economist.


Charles Cirtwill, of the Atlantic Institute for Market Studies, says NB Power could have avoided a public backlash, and made executive compensation a frivolous issue, if they were able to offer lower rates.


“If they did their job well and power rates were going down and consistently going down, people wouldn’t be worrying about how much they are making,” said Cirtwill.


“When rates are going up, people start to wonder where all this money is going, and it would seem that a bit of that money is going in directions people aren’t very comfortable with.”

But while Energy Minister Jack Keir says he understands the outrage of ratepayers and taxpayers, he is still disappointed with the way the information was made public.


“I think the message got lost, and I appreciate as much as anybody when they look at some of the salaries of the folks at NB Power. I understand that.”


Despite the fact that NB Power’s board approved retroactive pay increases that had originally been rejected by the previous government, and secretly reactivated a cancelled bonus program, Keir said the former Conservative government’s role in the controversy was missed.


“Is it a shame for NB Power? Does it reflect on NB Power. Yes it does. It is too bad that it does, and it is too bad the previous government played politics in it.”


Keir said he is satisfied with the discussions he has had with NB Power CEO David Hay and chairman Francis McGuire, since the bonuses and pay hikes were made public.

Keir learned about the bonus and retroactive pay hikes when they were reported in the Times & Transcript.

“Would I have liked the communication on this to have come out differently, absolutely,” said Keir, who receives minutes of the board of directors meetings in which the bonuses and pay increases were approved. But Keir said that doesn’t mean he has asked Hay and McGuire to include him on a greater number of NB Power decisions.


“I don’t need to do the day-to-day operations of NB Power. That’s why we pay them the money we pay them, because they are very, very good at running the operations at NB Power.”


As the Liberal government works to build an energy hub in the province, Keir says he doesn’t disagree with the compensation that is being offered to CEO David Hay, which can now reach $500,000 when his bonus is calculated, and his vice presidents.


“I agree that you get what you pay for, and I want the very best running our utility because we are in a very competitive environment, and what we want to do with our Energy Hub, NB Power is going to be a big player in that.”


Hay said NB power is working to become more transparent by publishing quarterly reports.

“We absolutely believe in transparency. We have taken all kinds of steps to make sure that that transparency occurs,” said Hay.


A new executive bonus scheme based on performance was announced publicly in July, with the intent of making executive salaries more transparent.


That announcement was made after NB Power’s board had issued retroactive pay increases and bonuses without notifying Keir or the public, earlier in the summer.


“The question of executive pay is a question for the board,” said Hay yesterday when asked whether the controversy had damaged the accountability efforts.


He said NB Power’s relationship with its customers has not changed.


“We have continued the same level of reliability and of service to our customers that we have provided over the last year. There has been no changes to that.”


NB Power’s board of directors cancelled the executive bonus program for 2008-2009 at the request of Finance Minister Victor Boudreau.


Boudreau has not asked for the retroactive pay hikes and bonuses to be repaid.