It's all about payEnergy Savings says executives leaving over pay issue
PAUL WALDIE
00:00 EDT Friday, April 07, 2006
Rebecca MacDonald says three senior executives are leaving Energy Savings Income Fund, which she founded and chairs, because they wouldn't accept a 50-per-cent pay cut.
"It's all about money," she said yesterday. "At the end of the day our feeling is, well, I mean, they contributed, no question about it, I'm not taking that away from them, but they got very well paid for it. But their contribution on an ongoing basis did not justify the compensation that they were expecting."
Toronto-based Energy Savings provides fixed-price natural gas and electricity contracts to homeowners and small businesses in Canada and the United States. Yesterday, the company announced the resignations of Dave Ellis, chief operations officer, and Chris Gaffney, vice-president and senior legal counsel. A month ago, the company said president Paul DeVries was resigning. He was replaced by Ken Hartwick, the chief financial officer.
Ms. MacDonald stresses the company expects the men to abide by three-year, non-compete clauses in their employment contracts. The company also said yesterday that it conducted a thorough review of its supply arrangements because "Mr. Ellis and Mr. DeVries were actively involved in Energy Savings commodity procurement." The review turned up no concerns. None of the three men were available for comment. Ms. MacDonald said they were on a biking trip together in Arizona that had been planned earlier.
All three men joined Energy Savings in 2002 from Enron Canada Corp. Each signed a five-year contract which Ms. MacDonald described as "very rich." She said Mr. DeVries earned "north of $15-million," Mr. Gaffney roughly $8-million and Mr. Ellis about $6-million. "Those were the top-paid individuals in our company," she said.
Last January, the start of the final year of the contracts, Ms. MacDonald said the company wanted to negotiate new arrangements with much lower pay. "I certainly was hoping for about 50 per cent."
The company started negotiations with Mr. DeVries, who "was not happy" and said he would leave at the end of September, she said. Mr. Ellis and Mr. Gaffney, whose contracts expire at year-end, also balked at the offer. Ms. MacDonald said they will not be replaced because their duties can be filled by other employees.
"It's a non-issue for us, to be honest with you. Probably it's very much an issue for them," she said. "They did create an opportunity for some very talented people in our organization to move upward."
Ms. MacDonald said the company commented on the non-compete clauses because it is concerned about the issue. "Absolutely they are going to do something together. Are they going to be able to compete with us? No."
I say way to go Rebecca!