Remuneration of Directors

The following table provides the various fees to which the members of the Board of Directors of Bombardier were entitled during the financial year ended December 31, 2012 with the exception, however, of Mr. Pierre Beaudoin, who was not entitled to any fees:

Type of fees Fees (1) 
All inclusive Annual Retainer
Chairman of the Board of Directors (1) $600,000
Board Members
(other than the Chairman of the Board of Directors)
$150,000
Additional Retainers (1)
Lead Director of the Board of Directors $15,000
Audit Committee Chairman $20,000
Other Committee Chairman $10,000
Committee Members
(other than the Chairman)
$5,000
Travel Fees
Travel Fees (2) $2,500
  1. The Chairman of the Board of Directors does not receive any additional retainer or annual fees.
  2. Every time a non-executive director has a one-way travel time of three hours or more from his/her residence in order to attend in person a meeting of the Board of Directors and/or one of its committees, he or she is entitled to travel fees.

The PDF link below shows the remuneration earned during the financial year ended December 31, 2012 by the directors of the Corporation who are entitled to receive them.

Read the Director’s Remuneration Table

Director Deferred Stock Unit Plan

To encourage the directors of Bombardier (other than Messrs. Laurent Beaudoin, Chairman of the Board of Directors, and Pierre Beaudoin, President and Chief Executive Officer) to better align their interests with those of the shareholders by having an investment in the Corporation, a Director Deferred Stock Unit Plan (the DDSU Plan) was implemented on April 1, 2000; it was amended in 2003, 2006, 2007, 2008 and 2011.

The DDSU Plan provides that the eligible directors of Bombardier are required to receive the entirety of their all inclusive annual Board retainer fees in the form of Director Deferred Stock Units (DDSUs) until the minimum shares and/or DDSUs holding requirement (as further explained below) is met. Thereafter, they have the option to be paid not more than 50% of their all inclusive annual Board retainer fees in cash and to keep receiving the remaining portion of such fees in the form of DDSUs. In addition, they may elect to receive any portion of any other fees (i.e., additional annual retainers and/or travel fees) in the form of DDSUs.

DDSUs have a value equal to the weighted average trading prices of the Class B subordinate shares of the Corporation on the Toronto Stock Exchange (TSX) for the five trading days immediately preceding the date of grant. DDSUs are vested on the date of the grant and take the form of a bookkeeping entry credited to the eligible director’s account for as long as he/she remains a director. DDSUs will be redeemed for cash upon request after the eligible director ceases to be a director, failing which the DDSUs will automatically be redeemed for cash upon the expiry of a pre-determined period. The value of a DDSU, when redeemed for cash, will be equivalent to the closing price of the Class B subordinate shares on the TSX on the last trading day preceding the day of the redemption. DDSUs earn dividend equivalents in the form of additional DDSUs at the same rate as the dividend paid on the Class B subordinate shares. The DDSU plan is not dilutive.

Minimum Shares and/or DDSUs Holding Requirement

The Board believes that it is important that directors demonstrate their commitment to Bombardier’s growth through their respective shares and/or DDSUs holding.

On February 1, 2008, the Board of Directors implemented a minimum shares and/or DDSUs holding requirement, as amended in 2011, pursuant to which each director has to hold shares and/or DDSUs having a minimum value of $400,000 CDN (equal to $401,700 based on an exchange rate of 1.0043 as of December 31, 2012 and to $391,600 based on an exchange rate of $0.9791 as of December 31, 2011) throughout his/her tenure as a director.

The DDSU Plan provides that until a director meets this minimum shares and/or DDSUs holding requirement, his/her annual Board annual retainer fees will be entirely credited to him/her in the form of DDSUs. Once the prescribed threshold is met, the director must continue to receive at least 50% of his/her annual Board retainer in in the form of DDSUs.

Pursuant to Bombardier’s Code of Ethics and Business Conduct, directors shall not engage in hedging activities or in any form of transactions of publicly-traded options in Bombardier securities, or any other form of derivatives relating to Bombardier securities, including “puts” and “calls”. In addition, directors shall not sell Bombardier securities that they do not own (a “short sale”).

The PDF link below provides information on the number and value of the Class A shares and/or Class B subordinate shares of Bombardier and/or DDSUs/DSUs held by the directors of Bombardier, excluding Mr. Pierre Beaudoin who is a Named Executive Officer.

Read the Directors’ Shares and/or DDSUs/DSUs Holding Table