The Chartwell entrance of two senior home residences in Quebec City.Jacques Boissinot/The Canadian Press
Executive bonuses rose last year at Chartwell Retirement Residences as the company said it responded effectively to the COVID-19 pandemic and gave itself perfect scores for employee engagement, customer satisfaction and its reputation with the public.
The corporate scorecard meant Chartwell paid out bonuses a higher level of its target goals than it did in 2019. Chartwell paid all four of its top executives in excess of $1-million, and each of the four received bigger bonuses than in 2019, when they served in lesser roles.
Chartwell is Canada’s largest operator of retirement homes. Long-term care, specifically, is only about 10 per cent of Chartwell’s business. In the COVID-19 crisis, however, the company has attracted outsized attention from critics of the deregulation of the long-term care sector in Ontario more than two decades ago. Former Ontario premier Mike Harris presided over that effort, and he has served as the chairman of the company’s board since 2003, collecting $223,000 in director’s fees in 2020.
In management’s discussion and analysis reviewing the 2020 year, Chartwell said 12 of its retirement residences and four of its long-term care homes had been declared by public-health authorities as of March 4 to be in COVID-19 outbreak. “Despite extraordinary efforts, COVID-19 tragically claimed the lives of some of our residents. Our thoughts are with those who lost loved ones to this disease.”
The pay information is included in the company’s proxy circular, which also includes two unitholder proposals. (Chartwell, structured as a trust, technically has “unitholders” rather than shareholders.)
One, from IBVM Foundation of Canada Inc., asks for a “human capital disclosure” on how Chartwell manages employees and the risks to them. The second, from Vancity Investment Management Ltd. on behalf of the IA Clarington Monthly Income SRI Class fund, asks the company to undertake a study of possibly implementing a living wage for its employees. Both proposals cite COVID-19 as a reason for them.
Chartwell asks unitholders to vote against both. It says increased human-capital disclosure in the 2021 circular should be satisfactory. And it says the living-wage proposal is oversimplified, restrictive and an inefficient use of resources. About 80 per cent of Chartwell’s employees are represented by labour unions, the company said.
Chief executive officer Vlad Volodarski, promoted to CEO on March 16, made $1.91-million, including a $323,967 bonus. It was more than double his 2019 pay, when he served as chief financial officer. His predecessor, Brent Binions, made $2.46-million in 2019.
Three other top executives made bonuses between $187,187 and $207,627, with total paycheques ranging from $1.04-million to $1.17-million.
Chartwell said its board decided to tweak its compensation plans in light of the pandemic. It divided the year by what occurred through March 15, and what happened after, awarding 100-per-cent bonuses for beating cash-flow targets through March 15. It awarded 50 per cent of bonuses for the post-March 15 performance.
All told, Chartwell reported adjusted funds-from-operations per unit of 81.4 cents, versus a goal of 98 cents. The company also made no payouts based on one- and two-year unitholder return, which had weights ranging from 15 per cent to 20 per cent of bonus for the executives. Chartwell units dropped by 14.5 per cent in 2020.
Overall, Chartwell paid out at 85 per cent of its targets until March 15, and ranges of 50 per cent to 67.5 per cent of target for the remainder of the year.
“The impact of the pandemic on Chartwell’s business was largely out of Management’s control,” the board explains in the circular. “For example, Chartwell’s business was significantly impacted by federal, provincial and local regulatory directives which prevented or delayed the acceptance of new residents into Chartwell residences as well as by the costs on the business to provide additional staffing in Chartwell residences and to provide appropriate personal protective equipment to Chartwell’s employees.”
The determining factors in executive pay, the board said, included its view that “Chartwell effectively responded to the many challenges presented by the pandemic,” including “sourcing of sufficient quantities of personal protective equipment,” and “providing meaningful and frequent communication to residences, residents, families and employees, and advocacy through industry associations and supporting sector peers.”
Also, it added, “None of Chartwell’s long-term care residences in Ontario required regulatory intervention in the operation of the residences.”
When Chartwell tweaked its plan in March, if shifted emphasis in the bonus plan away from the cash-flow goals and added weight to its employee engagement and “customer satisfaction and reputation” goals.
Chartwell said in surveys, 96 per cent of its residents and 95 per cent of residents’ families and friends responded that Chartwell “took important steps to keep them safe” and 94 per cent of residents’ families said the residents were safe living at Chartwell.
Chartwell said 44 per cent of employees in residences and 58 per cent of employees in the corporate offices strongly agreed with the statement “I am satisfied with Chartwell as a place to work,” up from 43 per cent and 52 per cent, respectively, in 2019.
Editor’s note: Chartwell paid out at 85 per cent of its targets until March 15, and ranges of 50 per cent to 67.5 per cent of target for the remainder of the year. A previous version of this story misstated the percentages of bonus payout for executives.
Editor’s note: Ontario deregulated the long-term care industry, not private-pay retirement residences. A previous version of this story was unclear.
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