City cannot dictate Enmax corporate salaries, says councillor

Chabot said he is sympathetic to the concerns people had about outgoing CEO Wayne O’Connor’s $3.8 million in total compensation for 2021

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The City of Calgary may be the sole owner of Enmax, but that doesn’t mean council has any power to influence how the company pays its top executives, according to one city councillor.

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Ward 10 Coun. Andre Chabot explained that the city is in a position where it can govern but not manage Enmax, which operates as a for-profit entity.

”Everyone seems to think that somehow we have the ability to directly affect those salaries, and we do not,” he said.

Chabot said he is sympathetic to the concerns people had about outgoing CEO Wayne O’Connor’s $3.8 million in total compensation for 2021.

O’Connor left the organization in October, after 17 months of service.

“I sometimes question the validity of the exorbitant salaries that many of these senior executives are getting in the private sector,” said Chabot. “So I can certainly understand how people would feel that way about a company that they feel as though they owned, and that somehow they should be able to have some ability to regulate.”

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He said regardless of how people feel about how Enmax pays its top executives, the city’s decision to purchase the company for $290 million in 2001 has paid off in spades. He said the company now has an estimated value of $3 billion and would command a much higher price if the city chose to sell it tomorrow.

“We got to this point by hiring the best and brightest (leaders) in the industry,” said Chabot. “And I would say that the rates that we pay our senior executives at Enmax, I’m sure it’s very comparable to what is being paid out there in the private sector.”

Chabot also pointed out that Enmax does not take any taxpayer money, but does put money back into city coffers with its annual dividend, which was $61 million for 2021.

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Councillor Andre Chabot during a council meeting on Monday, November 15, 2021.
Councillor Andre Chabot during a council meeting on Monday, November 15, 2021. Azin Ghaffari/Postmedia

Speaking a day after Enmax’s annual general meeting, Ward 1 Coun. Sonya Sharp said she was left with questions about transparency between Enmax and the city.

“We need to have a conversation about the best practices, and what those would be for information sharing,” said Sharp. “We either need to improve the process or set better expectations.”

Enmax was one of 14 wholly owned subsidiaries that gave annual reports to council this month. But while the rest appeared in council chambers, where the meeting could be recorded and live-streamed, Enmax’s was held in a boardroom.

Ward 11 Coun. Kourtney Penner asked during the meeting why Enmax was treated differently.

She was told part of the reason was that the meeting needed to be chaired by Enmax itself, and not council. There was a concern that holding the meeting in council chambers would give the appearance of Enmax being politically directed.

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Penner was also told the meeting was recorded and would be streamed online at a later date.

Chabot said the appearance of political influence on Enmax has always been an issue, especially because Enmax is subject to regulation from the Alberta Utilities Commission.

He said in the past, the city has intervened at the commission, only to have its intervention lead to negative earning impacts for Enmax.

“It’s always a very challenging thing for us to explain the relationship between city council and administration versus our wholly owned subsidiary that acts independently,” said Chabot.

He said the optics of those sorts of situations led to the decision to no longer have city councillors sit on the Enmax board.

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