Power Corp owners target of student protests in Montreal
May 15, 2012
Nicolas Van Praet, Financial Post
MONTREAL — One of Canada’s wealthiest and most politically connected families has come under attack as the force and rhetoric of Quebec’s student protests move from the streets into corporate shareholder meetings.
The Desmarais clan, which controls Power Corp., was the target Tuesday of angry demonstrators gathered in Old Montreal outside a hotel where the company’s annual general meeting was taking place.
A line of police in riot gear guarded the hotel’s main entrance while protesters chanted in French : “We must fight the thieves in ties” and “Your wealth is our poverty.”
‘There are radical groups that systematically want to destabilize the Montreal economy’
The demonstration was called by a student group. But Quebec finance minister Raymond Bachand said many of the protesters have nothing to do with students demanding a tuition freeze. “There are radical groups that systematically want to destabilize the Montreal economy,” he said Tuesday. “They are anti-capitalists, Marxists.”
While company chairman and chief executive Paul Desmarais Jr. shared the details of Power’s $264-million first- quarter net profit with shareholders, officers on horseback outside were pushing demonstrators back. “Our results show we have a solid risk management strategy,” he said.
Risk, as it turns out, was on the minds of many of the assembled investors. Some were checking the Montreal Police’s twitter feed on their BlackBerries for updates on the clashes. Others eyed officers stationed in the hotel corridors.
Daniel Thouin of Quebec shareholder rights group Médac made a reference to the protesters with this comment : “[Our organization] has been making proposals for the last 15 years. And those proposals aim to improve the management of publicly traded companies. They also aim for a certain justice in the distribution of wealth created by the capitalist system. You’ve all seen this morning people in the streets shouting ‘Occupy Montreal’, ‘Occupy Wall Street… We’re fighting to bring a different voice to shareholder meetings.” Advertisement
Mr. Thouin denounced Power Corp.’s executive pay, noting the average salary of the top five senior officers was $3.4-million last year. That’s 73 times the average Canadian salary of roughly $46,000, he said, and comes even as the company’s share price has fallen 37.7 % over the past four years.
Médac official Fernand Daoust made the same argument last week at Bombardier Inc.’s annual meeting, saying the company’s remuneration for senior leaders was “shamefully high” considering its stock performance. “These exorbitant pay packages are provoking disapproval within the general population,” he said. “We have to listen to the sound of this disapproval, which can appear with force.”
‘We’re fighting to bring a different voice to shareholder meetings’
Mr. Desmarais spent a significant amount of time talking about Power’s social and corporate responsibility. The company, which controls insurer Great West Lifeco and the Gesca Inc. newspaper group among other investments, needs to better communicate its efforts, he said, adding Power creates jobs and donates time and money to the various communities where it operates.
“How could you not be concerned right now in terms of what’s going on?” Mr. Desmarais said in response to a question by a reporter on the protests that have shaken Quebec’s political class and caused millions worth of dollars in lost productivity.
“Like all citizens, we are concerned. But we want this issue to be resolved hopefully in a respectful fashion. Let’s start with respect. With a democratic way. Within the rule of law. And that we come to an agreement that makes sense and where everybody invests in the future of our students. But everybody’s got to participate in that.”
For more than three months, Quebec has been gripped by protests and public disorder over the government’s plan to raise university and college tuition. Many gatherings have turned violent and police helicopters have become an almost nightly noise in central Montreal. Students are defying court orders by blocking others from attending class.
The government’s latest offer of a $254 annual increase over seven years has been met with a sound rejection by students, who have been joined by non-students in their fight.
