Bell Canada (BCE Inc.)’s 4,800 job cuts sparked frustration at its annual general meeting, with investors and employees questioning executives’ compensation. Board chair Gordon Nixon and Bell Canada CEO Mirko Bibic defended the decision.
Bell’s Job Cuts and Dividend Hike
- Bell announced job cuts in February amid restructuring plan.
- Restructuring included selling 45 radio stations and closing 107 stores.
- Prime Minister Justin Trudeau criticized the decision, calling it a “garbage decision.”
- On the same day, BCE raised its quarterly dividend to 99.75 cents per share.
- Questions raised about the disconnect between job cuts and annual profits and dividend hike.
Nixon’s View on Earnings Growth
- Acknowledges large earnings but not growth rate desired for share and dividend growth.
- Asserts growth, investment, capital attraction, and capital investments depend on earnings growth, dividend growth, and performance.
BCE Cuts Impact on Staff
- Company eliminated vacant positions to minimize impact on current staff.
- Unionized employees offered voluntary buyout.
- Changes at all company levels.
- Number of vice-presidents down 20% since 2020.
- Executive roles are collapsing across the company.
- Chief executive Bibic criticized for considering lowering compensation.
- Bibic’s Total compensation increased by 3% to $12.4 million.
- The increase is due to a $500,000 “long-term incentive award.”
- No changes planned for Bibic’s 2024 target compensation.
BCE’s CEO Pay and Executive Compensation
- BCE ranks below competitors in CEO pay and executive compensation.
- Compensation is determined by a consultant assessing performance and competitive environment.
- Board acknowledges challenges and aims to maintain top talent across the board.
Unifor Urges Shareholder Pressure on BCE
- Unifor, representing 19,000 telecommunications workers at BCE and 2,100 members at Bell Media, has urged shareholders to pressure the company for answers.
- BCE reported a decrease in first-quarter profit due to higher severance, acquisition, and other costs related to job cuts.
- Increased net mark-to-market losses on derivatives, higher interest costs, and increased depreciation and amortization expenses were also noted.
- BCE’s profit attributable to common shareholders was $402 million for Q3, down from $725 million in the same quarter last year.
- Bell’s restructuring plan, expected to save $250 million annually, was not captured in the first-quarter results.
BCE Q1 Q1 Results and Analysis
- Operating revenue decreased from $6.05 billion in Q1 2023 to $6.01 billion.
- Adjusted earnings per share increased from 85 cents per share to 72 cents per share.
- Desjardins analyst Jerome Dubreuil noted BCE’s results were slightly ahead of expectations.
- BCE added 45,247 net postpaid mobile phone subscribers, its best first-quarter result since 2018.
- Monthly churn rate for the category increased from 0.9% to 1.21 per cent.
- Bell’s wireless mobile phone average revenue per user was $58.14, down a penny from Q1 2023.