He may have lost out on becoming the CEO of Norfolk Southern, but E. Hunter Harrison has 15 million reasons to be happy with being the head of Canadian Pacific.
Trains magazine reported that Harrison is the highest paid CEO among North American Class I railroads.
In 2015, he took home $15.4 million in compensation (C$19.9 million). That was well above the $10 million made by Union Pacific CEO Lance Fritz.
E. Hunter Harrison
Other CEO pay last year included: Michael Ward, CSX, $9.2 million; James Squires, NS, $7.9 million; David Starling, Kansas City Southern, $7.9 million; and Claude Mongeau, Canadian National, $7.7 million.
BNSF is a part of privately-owned Berkshire Hathaway and executive compensation figures are not publically available.
Not everyone at CP believes Harrison should be so well compensated. At last month’s CP annual meeting, stockholders rejected by 50.1 to 49.9 percent CP’s executive compensation package.
In response, the CP board of directors said it would take the non-binding resolution into account when setting the pay for executives this year.
However, Harrison and the CP board won re-election to their posts, receiving 96.6 percent of the votes cast.
In 2015, Harrison was paid a base salary of $2,803,522, stock awards of $4,749,089, options awards of $5,163,279, non-equity incentive plan compensation of $6,002,537, and other compensation of $1,184,026. All figures are in Canadian dollars.
Trains reported that Harrison’s base salary is high because he had to forfeit $1.5 million in annual CN pension payments in order to take the job at CP. Harrison was the CEO of CN before joining CP in June 2012.
In a proxy filing, CP asserted that by subtracting the pension makeup payments, Harrison’s base salary is $700,000, which the Calgary-based company said is “significantly below his prior salary at CN, industry norms, and CEO salaries in CP’s comparator group.”
The proxy filing justified Harrison’s pay package by saying that under his leadership CP has transformed from the industry’s worst financial performer to among its best.
“Although Mr. Harrison’s total compensation is much higher than his peers, the return to shareholders during his tenure is equally impressive,” CP said, adding that during Harrison’s tenure as CEO that CP added $14.2 billion in total additional shareholder value.
Fritz, who became CEO of UP in February 2015, earned a salary of $966,000, a bonus of $2 million, stock awards of $3,600,488, option awards of $2,400,008, change in pension value and deferred compensation earnings of $980,911, and other compensation of $139,220.
Ward of CSX had a base salary of $1.2 million, stock awards of $7,064,833, non-equity incentive plan compensation of $864,000, and other compensation of $80,728.
Squires took over as NS CEO on June 1, 2015, and was paid a base salary of $837,500, stock awards of $1,625,268, option awards of $4,375,050, a change in pension value and deferred compensation earnings of $1,036,596, and other compensation of $115,151.
Starling at KCS pulled down a base salary of $900,000, a bonus of $326,669, stock awards of $5,529,963, option awards of $551,195, non-equity incentive plan compensation of $468,000, and other compensation of $124,683.
CN’s Mongeau received a base salary of $1,075,000, an incentive bonus of $1,290,000, performance share units of $3,256,065, and stock options worth $2,144,000.