Abitibi CEO offers to forgo $1.7M in compensation
(News article : The Montreal Gazette by Robert Gibbens, Freelance) - November 1, 2011 - Veteran forest products industry leader Richard Garneau had a message Monday for critics of AbitibiBowater Inc.'s level of executive pay as it emerges from a major restructuring and faces highly competitive world markets.
"I want to be clear to those with whom I interact," the company's CEO told analysts.
"My top priority is the long-term success of AbitibiBowater and I'm prepared to forgo $1.7 million in personal compensation this year to make my point."
Other senior executives accepted special compensation last week but he said companies with a long-term future must be able to attract and retain talented executives. "The critics were misguided and shortsighted," he said.
AbitibiBowater, which resulted from the 2007 megamerger of heavily indebted Abitibi-Consolidated and Bowater Inc., emerged from creditor protection at the end of 2010. Garneau took over leadership immediately and has led what will become Resolute Forest Products Inc. into a new recovery phase.
Newsprint demand is still slipping at about seven per cent annually in North America, and commercial printing and specialty papers by about six per cent, as advertising moves to the Internet. Pulp is down to $800 to $850 U.S. per tonne, with heavy discounting in the spot market, but analysts expect it might rebound next year. Export markets are steady.
Garneau said the firm's South Korean mill has been heavily restructured to help it compete against Chinese competition. Overall, the company now operates 18 pulp and paper mills and 24 lumber and wood products mills - down about half from 2007.
The worry comes from a further 11-per-cent reduction in Quebec harvesting rights, following an 18-percent cut in 2008. "We've got to talk to the employees and the communities where we operate about the challenges this will bring," he said. "We can't rule out layoffs or even sawmill closures ... it's sales to third parties that will be affected ... our own mills are assured of enough fibre."
AbitibiBowater reported adjusted (excluding special items) thirdquarter earnings of $52 million, or 53 cents a share, on sales of $1.2 billion, little changed from a year earlier. Including special items, there was a quarterly loss of $44 million, or 46 cents a share.
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Source: The Montreal Gazette
