Hydro CEO supplements $515-K pay with $250K in cash, shares to sit on U.S. board, committees

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This article was published 18/10/2023 (714 days ago), so information in it may no longer be current.

Questions are being asked about why Manitoba’s highest-paid CEO at its most powerful Crown corporation is serving on the board of a publicly traded U.S. company at such a critical time.

Manitoba Hydro president and chief executive officer Jay Grewal has, since 2021, been a director of Civeo Corp., one of the world’s largest providers of workforce accommodations that offers lodging and services at work camps in Canada, Australia and the United States.

“I think the optics are not so good,” said University of Winnipeg Prof. Malcolm Bird, who studies Crown corporations.

“When you’re an employee of a company, I think you need to focus all your energies on that company and this would be a slight distraction from focusing on Hydro. She’s very well compensated and paid.”

Grewal has been at the helm of Hydro since 2019. In 2022, she received $515,416 in compensation.

Also in 2022, she attended six Civeo board of directors meetings, seven audit committee meetings, three finance and investment committee meetings, and the annual general meeting of shareholders, according to the Houston-headquartered corporation’s 2023 statement to shareholders.

The report said all directors and committee members attended 100 per cent of meetings, for which attendees’ expenses were reimbursed.

Non-employee directors of Civeo, such as Grewal, received an annual cash retainer of US$65,000 and an annual equity retainer of $125,000 worth of shares. She also received a US$18,000 cash retainer as an audit committee member and US$13,000 as a finance and investment committee member.

On Tuesday, US$96,000 was equal to roughly $129,000 in Canadian funds.

Manitoba Hydro dismissed any concerns about Grewal’s appointment to the Civeo board, saying it it was disclosed to and approved by Hydro’s board, and has never been an issue.

“It is common for CEOs of companies to sit on the boards of charitable organizations or other corporations to both share their expertise and gain insight into other business and governance practices as part of their ongoing professional development,” corporate communications director Scott Powell told the Free Press in an email.

Bird said he doesn’t see Grewal having a conflict of interest serving on Civeo’s board — he’s more concerned Hydro is at a crucial juncture that requires undivided attention.

“I don’t see this as that big of an issue in comparison to the real issues that Hydro faces,” he said.

“This company owes $25 billion and that debt is coming due. It’s not being renewed at two per cent and 2.5 per cent, it’s being renewed at five or six per cent. That’s a huge problem for Hydro, for us, for taxpayers, for the government.”

Servicing debt and the growing demands for carbon-free electricity are major challenges, he added.

“If we’re going to go down this energy transition path and we’re all going to be driving electric cars and using electricity to heat our homes, then we need to really think about the role that Hydro’s going to play in this,” Bird said.

“Wind and solar are not going to solve this.”

Hydro may need to consider partnering with the federal government to fund more hydro or nuclear power generation to meet its climate-change goals, Bird said.

“That’s a huge issue.”

Serving on a board, however, doesn’t require the same time commitment as management, Powell countered.

“Jay is extremely busy running Manitoba Hydro and performs her board duties for Civeo in her off-hours from Hydro, including evenings, weekends,” he said.

“Any time spent in a board meeting on a work day she makes up for during her personal time. This is what many CEOs do when sitting on corporate or charitable boards, including those who sit on the board of Manitoba Hydro.

“To be clear, she is virtually always available even during times she is away from the office and on vacation.”

The most pressing issue Grewal may be concerned with right now is Wednesday’s change in government, which may result in a change of Hydro’s board, Bird said.

“Manitoba is very unique in that when the governments change, they fire all the boards of the Crowns… It’s not a good governance model,” he said. “This doesn’t happen in other provinces. It doesn’t happen in the federal government.”

Retaining the institutional memory, knowledge and experience of board members who are there to serve the Crown corporation is vital for success, Bird said.

“If I could say one thing to (Manitoba premier-designate Wab) Kinew, I’d say: ‘Don’t fire the boards.’”

carol.sanders@freepress.mb.ca