Ed Martin severance not extravagant, says expert on salaries and perks

An Ontario expert on salaries and perks forexecutives says thethe$6.1-million dollar package of severance and other benefits given to departing Nalcor CEO Ed Martin is "in line with expectations."

• Former Nalcor CEO Ed Martin releases severance agreement, details exit pay

StevenOsiel isahuman resources consultant andexecutive compensation is his specialty. He saidthe salary and severance paid to the former CEO of Nalcor Energy hardly makes him blink.

"Eventually I get numb to how much everybody makes," the vice-president ofAccompass and university lecturer told CBC Radio's St. John's Morning Show Friday.

The headlines are now focussed on the political fall-out as premier Dwight Ball faces accusations of incompetence for his role or lack of a role innegotiating Martin's severance package.

"The number is large and it's always shocking to see a large number," Osiel said from Toronto. "But in the world of executive compensation [Martin's package]seems to be in line with expectations and I haven't seen anything egregious really happening here."

Osiel saidthe $6.1 million dollars includes pension benefits totalling $4.7 million. That pension was negotiated as part of Martin's original contract and, like any employee's pension, would be paid out at one time or another.

"We can comment how large that pension is. But [paying it out]is a normal part of any public sector organization."

Crown corporations different

Osiel saidthe relevent question concerns the true severance package of $1.4 million dollars. And in this case he said the payment passes the sniff test.

"Any individual at any level at any organization for many years can get 24 months salary," he said.

Another factor that makes it harder to compare executive salaries is that crown corporations pay differently than private or publicly traded corporations, which usually offer shares as part of their compensation package.

Crown corporations don't have that option. In order to compete for talented people,"sometimes you need to provide pay that will come at the end of one's career, rather than through one's career," he said. "Not paying less, just paying differently."

To illustrate that point you only have to look to Stan Marshall, the new CEO of Nalcor Energy. The former president and CEO of Fortis Inc.a publicly traded companytook a big cut in pay when he assumed Martin's salary.

According to the Canadian Centre for Policy Alternatives, Marshall was paid more than $11.5-million dollars in salary and bonuses his last year at Fortis.

Marshall made it clear he's only coming back to finish Muskrat Falls and he won't be getting a severance package when he leaves Nalcor.

"Sometimes people work for for reasons other than compensation," Osiel said. "You reach a point in your life where it's not just about money."