by arthurdent » Sun Mar 08, 2015 8:04 am
Well, Cool Cat, there are many different perspectives, yours being one of them. First, I'm with you on CEO pay generally...something has distorted this situation very badly over time and it was interesting to see a move in Switzerland to peg a CEO's salary at no more than six times the pay of a benchmark person in the organization. You're also correct that most public services are not set up to be profit centres, although both BC Hydro and ICBC are being tapped for 'dividends' by the province. So to make turning a profit is at best a questionable criteria for setting executive pay. How it works for most public sector companies is that an outfit like William Mercer does an analysis of similar public and private organizations to see what people doing the same work are getting paid. Then, the Board of Directors or, in some cases, an external body, determines that wages in the company will be no higher than a percentage of the comparator organizations; sometimes it's the median, sometimes up to about 70%.
In TransLink's case, you need fairly competent people to handle an organization with an annual budget of $1.4 billion and a capital program of $2 billion. The reason I've been on here defending my old gang is that I know they have proven themselves extremely competent. Contrary to your perception, TransLink is held up to comparisons and benchmarks both domestically and internationally, and consistently rates among the best. I posted a link to a report with the details a few messages ago.
Even the Compass project, as behind schedule and over budget as it is, is still being better managed than most similar roll-outs in other places. Sydney Australia's program was over budget by about twice the total cost of ours. Toronto's system was over, Ottawa's crashed when it was first launched. At one point, Calgary gave up, ripped out all of the equipment and sent it back to the supplier, although both sides there have decided to have another go at it. This is very tricky technology, and TransLink has not done anything like a good enough job of describing the unique challenges it has had. But here's a similar story: TransLink did a significant upgrade to the bus communication system and, like Compass, set some stringent performance targets that had to be met before the new system would be accepted. It took over two years for this new system to reach performance targets and only then was the supplier paid the final amount. It's the same situation for Compass...the supplier will need to perform before they get the entire contract price.
We have critical decisions to make, and it is simply not good enough to assume the default position so many take -- that public institutions are badly managed and wasteful. It may be a convenient way to rationalize objections to taxes, but it won't do us much good in the long run.