The CEO of Hydro One is refusing to shoulder the blame for high electricity rates in Ontario.
“We’ve taken accountability in terms of our own productivity and efficiencies which leads to cost reductions,” Mayo Schmidt told BNN Bloomberg’s Amanda Lang in an interview Wednesday.
Schmidt says he’s also taken $89 million in costs out of his business, in addition to negotiating with price makers to get a 31 per cent reduction in hydro costs for his customers.
The burden of high electricity rates, he says, falls on the entire industry, including operators, regulators and the government.
“It’s all our responsibility,” he said. “Our name is on the bill, so we take accountability for the bill.”
“We’re not a price setter, but it doesn’t mean we can’t get our costs down, which is what we’ve been focused on as an organization.”
Compensation packages for Schmidt and the Hydro One board of directors has come under fire recently, partly because of the high electricity rates for Ontario consumers and businesses.
Schmidt has most recently been criticized by Ontario Progressive Conservative Leader Doug Ford, who vowed to get “rid of the $6-million man,” referring to Schmidt and his compensation, in a rally he held outside Hydro One’s annual meeting on Tuesday. Ford has made the pay packages for Schmidt and Hydro One’s board of directors a key focus in his provincial election campaign.
Schmidt’s compensation package last year was $6.19 million and in the event of a change of control, he would receive a $10.7-million severance package.
“There’s no doubt when you think about the arenas in which we work as public companies in the capital markets, as compared to average compensation in any province, in any state in North America, there are certainly significant differences,” Schmidt acknowledged in the BNN Bloomberg interview, when asked about whether he was surprised about the public debate that has spurred over his compensation.
He noted Hydro One, like every public company in Canada, follows “rigid” processes in determining executive compensation. Schmidt said there’s a number of financial metrics considered to reach a salary figure, including the company’s enterprise value, total gross sales, net income, and EBITDA (Earnings Before Interests, Taxes, Depreciation, and Amortization).
Schmidt maintains his focus remains on running his business in the wake of the political firestorm that has put his salary in the spotlight.
“What we really do is we focus on running the busisness,” he said. “We don’t get distracted by what is occuring in politics – and we really shouldn’t.”
He elaborated to say his company’s main focus right now is getting the $6.7-billion transaction complete to acquire U.S. energy company Avista, which he says is “tremendous step” for Hydro One, and hopes to create more growth outside the province.
“We see the opportunity to create a great Canadian championship company here.”