As the deficit-fighting Premier of Ontario, Mike Harris stared down furious teachers and civil servants on the picket line. He advised welfare recipients to "try and work a few hours a week" if they wanted to eat better. He loudly accused Paul Martin of "stealing" billions from the province's taxpayers. He needed to be tough as rawhide, and he was.
As the top-ranking independent director at Magna International, Mike Harris was sent to negotiate with company founder Frank Stronach in early May. His mission: to talk down the extraordinary price - nearly $1-billion, including future consulting fees - that the irascible Mr. Stronach was asking for his family's controlling stake in Canada's most important auto parts business.
CIBC prepared some speaking notes for Mr. Harris, including a reasonable counteroffer worth about $400-million less. He needed to be tough, and, um, can we get back to talking about how he slew the deficit?
Ah, well. He wouldn't be the first to go a bit soft in his golden years. Time and corporate comforts can do that. And life after politics has been good to Mr. Harris; in large measure he has Mr. Stronach to thank.
In 2001, Mr. Harris was paid a salary of $143,013 for running the province. In 2009, he earned $556,100 in retainers and other fees from Magna, the bulk of which was for being its lead director - in essence, the No. 2 man in the boardroom next to His Frankness.
The first job was a seven-day-a-week commitment, leading a government responsible for the hospitals and schools that serve about 12 million people and a provincial economy with output of about $450-billion (at the time of his departure). The second job, which pays nearly four times as much, involved 23 meetings last year, plus some other duties.
Readers can make up their own minds about whether the pay-for-effort equation here makes sense. Nobody - or at least, nobody in his right mind - goes into politics in Canada thinking he'll get rich while in office. The financial payoff, when there is one, comes later, and from the moment he left the legislature in 2002 there were rumours Mr. Harris was hunting for a Bay Street job with a sizable paycheque.
No one could begrudge him for doing so. A smart person markets his best assets. Influence and political experience are valuable assets in Corporate Canada. That's particularly the case where Mr. Stronach is concerned. Former Ontario premiers Bill Davis and David Peterson each found homes in the Magna empire, as did Ed Lumley, a federal Industry minister from the early 1980s. This is a perfectly reasonable thing for Magna to do, given how closely the auto industry is entangled with government.
Politicians-turned-directors have another advantage, too. Since they usually come without specific business or family ties, they usually qualify as "independent" directors, making them eligible for a whole bunch of important jobs.
So it was no surprise that Mr. Stronach hooked Mr. Harris less than a year after he left Queen's Park to join the Magna board. This was the first of many; the ex-premier now sits on seven public company boards, including Canaccord Capital and FirstService. But Magna remains the meal ticket, and by this spring, Mr. Harris was sitting on $2.7-million worth of Magna deferred share units.
Multimillionaire Mike Harris: The mere phrase is enough to make Buzz Hargrove's hair curl.
The question at hand, however, is what shareholders are receiving in return, since they are paying the bill. CIBC was paid to give Mr. Harris some advice and gave him a specific idea to knock down the price. And when Mr. Harris entered that room with Mr. Stronach, he kept the proposal in his pocket. Didn't even bring it up.
On Friday, when asked why, Mr. Harris referred to new documents released by Magna, which essentially repeated his testimony to an Ontario Securities Commission panel last month: that Mr. Stronach had already dug his heels in, that it would have been "counterproductive" to spend much energy trying to seek a better deal. He'd given up before the negotiation had even started.
The subtle implication is that somehow the leader of the Common Sense Revolution feared the wrath of Frank Stronach. We'll leave it to you to decide why that might have been the case.
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