Advisory Committee on Senior Level Retention and Compensation

Table of Contents

• Preface
• Compensation for Executives and Deputy Ministers
  • Methodology
  • Findings
  • Summary of Conclusions and Recommendations
• Compensation for Chief Executive Officers of Crown Corporations
  • Methodology
  • Findings
  • Summary of Conclusions and Recommendations
• Compensation for Other Governor in Council Appointees
  • Methodology
  • Findings
  • Summary of Conclusions and Recommendations
• Human Resources Policies and Programs
  • The Working Environment
  • Modernizing the Legislative Framework
  • Performance Management Program for Executives
  • Summary of Conclusions and Recommendations
• Conclusion
• Appendices
  • Appendix A - Advisory Committee on Senior Level Retention and Compensation Committee Members
  • Appendix B - Committee Mandate

Preface

The Advisory Committee is pleased to provide this report and its recommendations to the Government for consideration. Individually and as a Committee, we feel strongly that the Public Service plays an important role in the economic and social development of Canada, whether providing policy advice to Government or delivering services directly to Canadians.

Although some recent events have underscored the need for specific management improvements and generally increased accountability, the Committee believes that the federal Public Service remains an institution with talented, dedicated leaders, committed to serving their country and their fellow citizens to the best of their abilities. This is supported by the findings of the Public Service Employee Survey and of the health study undertaken by the Association of Professional Executives of the Public Service of Canada (APEX).

Nevertheless, these studies reveal an institution under stress. The Committee strongly supports the Government's announced proposals to modernize the human resource management framework to place more emphasis on decision-making and accountability than on process. Legislative changes are an important first step, but not sufficient to reduce the pressure on the Public Service from without and within: this will require a cultural change that must be led and demonstrated from the top. Public Service leaders at all levels, especially executives and deputy ministers, should be held accountable for making this happen. The Committee believes that strengthening the Performance Management Program for Executives and increasing accountability for how functions are performed and results achieved can contribute significantly to improving the working environment in the Public Service.

In previous reports, the Committee noted that timely adjustments to compensation are an important signal of the value an organization places on its leadership cadre. The Committee, the Treasury Board Secretariat and the Privy Council Office, have made a significant effort to ensure that compensation recommendations for the senior levels of the federal public sector could be considered by the Government as soon as possible after compensation data from comparator markets became available. This report will allow proposed adjustments to be made very close to their effective date.

I and my colleagues on the Committee believe that our reports are not only a vehicle to present recommendations to the Government, but also provide an opportunity to make observations that we hope contribute to public discussion and understanding of the value of the Public Service of Canada. We look forward to continuing our efforts during this challenging time.

Carol Stephenson

Compensation for Executives and Deputy Ministers

Methodology

The current methodology for establishing executive (EX) and deputy minister (DM) compensation was recommended by the first Advisory Committee in 1998. It was reviewed by this Committee in 2002 and found to be sound and appropriate. The methodology is based on total compensation comparability with the Canadian market, including both the broader public and private sectors at the EX01 level, which is the entry level to the EX Group. Total compensation includes base salary, performance pay and non-cash compensation (e.g. pensions, benefits and perquisites) valuated by an independent third party, in this case Hay Management Consulting. Compensation for higher level executive positions and for deputy ministers is based on internal relativities reflecting increased responsibilities at each subsequent classification level.

The EX01 level is the most populous in the EX Group, representing approximately 2,100 positions or 52% of the Group. It includes a mix of different jobs requiring varying combinations of skill and know-how, but all falling within the classification boundaries of an EX01 position. Job evaluation data indicate that the complexity of EX01 jobs has increased recently with the result that a 'representative' EX01 job now matches at a slightly higher level than in previous surveys.

While the Committee does not want to deviate from the existing methodology, it is concerned about the potential instability in the point of comparison that is dependent on the mix and evaluation of EX01 positions over time. We believe that we should be cautious in applying the full measure of the change until we can be sure that the apparent trend towards increased complexity is sustained and not simply a temporary change in the make-up of EX01 level positions.

Findings

The total compensation of an EX01 in the Public Service at the job rate (the maximum rate for fully satisfactory performance) is currently $132,450 while the median actual total compensation for the same level of job in the comparator market as of December 2002 was $137,500. Total compensation for an EX01 appears to have fallen behind similar positions in the external market by 3.8%. However, as noted above, this difference represents not only compensation changes in the total Canadian market in 2002 but also reflects the change in the point of comparison.

After examining published survey findings of actual compensation increases for 2002 and projected increases for 2003, we have chosen a conservative and, we believe, fiscally prudent approach, which we feel more accurately reflects recent salary adjustments in the comparator market. We recommend that:

• EX and DM salary ranges be increased by 2.8%, effective April 1, 2003.

The following illustration proposes new job rates. Minimum salaries would continue to be set at 85% of the job rate. No change is proposed to the compensation structure, including the variable at-risk pay for which executives are eligible.

Current and Proposed EX and DM Job Rates and At-Risk Pay

	Current Job Rates $000	Proposed Job Rates $000	At-Risk Pay
Ex01	99.7	102.5	10%
Ex02	111.7	114.9	10%
Ex03	125.0	128.5	10%
Ex04	143.7	147.8	15%
Ex05	160.9	165.5	15%
Dm01	180.1	185.2	15%
Dm02	207.1	212.9	20%
Dm03	232.0	238.5	20%
Dm04	259.9	267.2	25%
Illustration 1

The Committee also reviewed the benefits available to executives in the Public Service and noted that they are generally comparable to those in the private sector and represent a slightly greater proportion of total compensation. However, it was also noted that holiday and vacation entitlements for Public Service executives are somewhat less than what are provided by many organizations in the comparator market. The Committee recommends that:

• EXs and DMs receive one day of personal leave per year to be taken at their discretion, but which cannot be carried over from year to year.

This will contribute to bridging the apparent gap with the comparator market in terms of total compensation without significant ongoing cost.

The Committee also considered the latest information concerning compression and inversion at the EX01 level. Compression is defined by the Canadian Compensation Association as situations when the compensation of a supervisor is less than 10% greater than that of a direct report. Inversion is said to exist when the compensation of a direct report is greater than that of the supervisor. A Treasury Board Secretariat study of the largest government departments indicates that compression or inversion exists in about 6.0% of EX01 positions. Although this is higher than the 3.2% observed in 2002, the Committee notes that it remains largely restricted to situations where an executive supervises the work of highly skilled professionals, such as scientific researchers, medical officers, lawyers or defence scientists. We will continue to monitor compression and inversion but do not feel that it represents a significant problem at this time.

Summary of Conclusions and Recommendations

In summary, we:

• conclude that EX01 job evaluation data should be monitored to determine if apparent increased complexity continues to support a higher point of comparison with the external market;
• recommend that EX and DM salary ranges be increased by 2.8%, effective April 1, 2003;
• recommend that EXs and DMs receive one day of personal leave per year to be taken at their discretion, but which cannot be carried over from year to year; and
• conclude that while the incidence of compression or inversion is higher than it was in 2002, it does not represent a significant problem at this time.

Compensation for Chief Executive Officers of Crown Corporations

Methodology

In its last report, the Advisory Committee recommended that the Privy Council Office conduct a review of the compensation policy and principles for Chief Executive Officers (CEOs) of Crown corporations. Since Crown corporation CEO compensation significantly lags CEO compensation in the private sector and compensation of vice-presidents, which is determined by the corporations' boards of directors, exceeds that of the CEOs in a few cases, the Committee wished to assure itself that the current compensation regime for CEOs of Crown corporations continued to meet the needs of both the corporations and the government.

The existing CEO compensation policy objectives are:

• to provide adequate compensation to recruit qualified individuals;
• to create equity, to the extent possible, within and among Crown corporations and with executives, deputy ministers and otherGovernor in Council appointees;
• to establish compensation levels that recognize the mix of public policy and commercial objectives in Crown corporations; and
• to ensure fiscal prudence.

The compensation policy developed to achieve these objectives was: to evaluate the individual CEO positions; to group the positions by increasing scope and responsibilities; to benchmark the Group 1 CEO job rate at the 25th percentile of the job rate for comparable positions in the private sector market; to establish compensation for higher Groups based on internal relativities; and to provide a portion of the compensation as variable, re-earnable pay based on performance. The Advisory Committee also encouraged flexibility in the application of the resulting compensation structure if recruitment difficulties were encountered.

In its review of the compensation policy and principles for CEOs, the Privy Council Office surveyed a sample of private and public sector organizations in Canada to determine their compensation policies and practices. In addition, a number of provinces and countries were surveyed to learn how they manage compensation in their state-owned enterprises. The Privy Council Office also examined the extent to which the current CEO compensation policy was meeting the government's need to recruit qualified CEOs.

The Privy Council Office found that the private and public sector organizations surveyed establish their compensation principles as part of a strategic business plan in order to focus on overall performance and to achieve objectives. The basic principles include the need to be competitive in the market in order to attract, motivate and retain high calibre individuals, to reinforce the achievement of vision and goals, to reward equitably and to pay for performance. The comparator market used to establish compensation is mostly industry related, with organizations comparing themselves to like organizations. Compensation policies and practices are in place but remain flexible in their application in order to attract and retain the ideal candidate. A few private sector organizations seek to be industry leaders in the compensation they offer.

The provinces surveyed generally determine and administer CEO compensation centrally, although some organizations have the authority to establish their own compensation policies. The compensation policy objectives are to attract and retain suitable candidates, to neither lead nor lag the compensation of their comparator markets and to provide competitive compensation that is sustainable (i.e. fiscally prudent and supportable now and into the future). The comparator markets used to establish compensation are a mixture of public and private sector organizations. In some instances, both CEO and vice-president compensation are centrally managed, thereby ensuring consistency in compensation policies for CEOs and vice-presidents.

Among the countries surveyed, compensation determination is centralized in some and decentralized in others. The comparator market for determining CEO compensation tends to be the public rather than the private sector. In these cases, compensation levels trail the private sector by a wide margin. Vice-president compensation is centralized in some cases and decentralized in others. In one country where direct report compensation is decentralized, the conservative approach to CEO compensation results in the compensation of direct reports encroaching on that of CEOs. This is accepted as a fact of life.

Overall, the survey found that the compensation policy objectives and the compensation regime for CEOs of Canada's federal Crown corporations are consistent with other public sector practices, whether in Canada or abroad. The Committee noted that the recruitment of qualified CEOs has generally been possible within the current compensation regime. It also noted that some compression and/or inversion of vice-president compensation with CEO compensation can occur in other countries and jurisdictions. Therefore, the Committee is satisfied that the current compensation policy objectives remain sound and that the current compensation structure and methodology should be maintained.

Findings

In applying the compensation methodology, the Advisory Committee found that the current job rate (salary range maximum) for a Group 1 CEO of a federal Crown corporation is $115,800, while the base salary at the 25th percentile for the same level of job in the Canadian private sector market is $119,100. Therefore, the job rate for a Group 1 CEO has fallen behind similar positions in the comparator market by 2.8%.

The Committee recommends that:

• CEO salary ranges be increased by 2.8%, effective the beginning of each Crown corporation's fiscal year in 2003, which date varies from corporation to corporation.

The following illustration proposes new job rates. Minimum salaries would continue to be 85% of the job rate. There is no change to salary structure including at-risk pay percentages.

Current and Proposed Job Rates and At-Risk Pay for CEOs of Crown Corporations

	Current Job Rates $000	Proposed Job Rates $000	At-Risk Pay
Group 1	115.8	119.1	10%
Group 2	129.7	133.4	10%
Group 3	145.3	149.4	10%
Group 4	162.7	167.3	10%
Group 5	182.2	187.4	10%
Group 6	209.5	215.5	15%
Group 7	240.9	247.8	15%
Group 8	277.0	285.0	15%
Group 9	332.4	342.0	20%
Group 10	398.9	410.4	25%
Illustration 2

Summary of Conclusions and Recommendations

In summary, we:

• conclude that the compensation policy objectives for CEOs of federal Crown corporations are consistent with other public sector policies in Canada and abroad;
• are satisfied with the current compensation policy; and
• recommend that CEO salary ranges be increased by 2.8%, effective the beginning of each Crown corporation's fiscal year in 2003.

Compensation for Other Governor in Council Appointees

Methodology

For Governor in Council appointees in agencies, boards and commissions, the current compensation policy is to establish comparability with the Canadian private sector market based on salary at the GC03 level and then establish compensation for other levels based on internal relativities. In determining the appropriate salary adjustment for 2003, the Advisory Committee also considered total compensation for GCs as well as relativities between GC and executive and deputy minister compensation, keeping in mind that the pension and benefit entitlements for GCs are generally the same as for executives.

Findings

The Advisory Committee found that the job rate (salary range maximum) for a GC03 is currently $93,900, while the median base salary for the same level of job in the Canadian private sector market is $96,300. Therefore, the job rate for a GC03 has fallen behind similar positions in the comparator market by 2.6%.

To maintain the current compensation policy and structure, as well as the relativities with executive and deputy minister compensation, the Committee recommends that:

• GC salary ranges be increased 2.6% and that the GC-Q salary ranges be adjusted accordingly, effective April 1, 2003; and
• the terms and conditions of employment for appointees continue to parallel those of executives and be amended to provide for one day of personal leave per year to be taken at their discretion but which cannot be carried over from year to year.

The following illustrations propose new job rates for the GC and GC-Q Groups respectively. Minimum salaries would continue to be 85% of the job rate. There is no change to salary structure including at-risk pay percentages. As the Committee has noted in previous reports, the GC-Q Group consists of positions whose independence from the government makes performance pay inappropriate. Therefore, the job rates for the GC-Q Group include two-thirds of the available at-risk pay for the GC Group added to the GC job rates, since this amount of at-risk pay tends to be the average awarded.

Current and Proposed GC Job Rates and At-Risk Pay

	Current Job Rate $000	Proposed Job Rate $000	At-Risk Pay
Level 1	71.0	72.8	10%
Level 2	81.7	83.7	10%
Level 3	93.9	96.3	10%
Level 4	108.0	110.7	10%
Level 5	124.2	127.3	10%
Level 6	142.8	146.4	15%
Level 7	164.2	168.4	15%
Level 8	188.8	193.7	15%
Level 9	217.1	222.8	15%
Level 10	249.7	256.2	20%
Illustration 3

 

Current and Proposed GC-Q Job Rates and At-Risk Pay

	Current Job Rate $000	Proposed Job Rate $000	At-Risk Pay
Level 1	75.7	77.7	N/A
Level 2	87.1	89.3	N/A
Level 3	100.2	102.7	N/A
Level 4	115.2	118.1	N/A
Level 5	132.5	135.8	N/A
Level 6	157.1	161.0	N/A
Level 7	180.6	185.2	N/A
Level 8	207.7	213.1	N/A
Level 9	238.8	245.1	N/A
Level 10	283.0	290.4	N/A
Illustration 4

Summary of Conclusions and Recommendations

In summary, we recommend that:

• GC salary ranges be increased 2.6% and that the GC-Q salary ranges be adjusted accordingly, effective April 1, 2003; and
• the terms and conditions of employment for appointees continue to parallel those of executives and be amended to provide for one day of personal leave per year to be taken at their discretion but which cannot be carried over from year to year.

Human Resource Policies and Programs

A number of notable reports have been released and events taken place since the release of the Advisory Committee's last report in August 2002. Two major studies were undertaken of the Public Service working environment. The first was the Executive Health Study undertaken by the Association of Professional Executives of the Public Service of Canada (APEX) and the second was the 2002 Public Service Employee Survey. In addition, on February 6, 2003, the President of Treasury Board introduced legislation on behalf of the Government to modernize the human resource management framework of the federal Public Service.

The Working Environment

The APEX study was a follow-up to a 1997 study of executive health. Using standardized instruments that allow for some comparisons with other private and public sector organizations, as well as to Canadian norms, preliminary study findings include that:

• the overall health of Public Service executives has not improved since 1997;
• as a group, executives are less healthy than would be expected for their socio-economic status; and
• executives are showing signs of fatigue, overwork, burnout and gradual wearing down.

While APEX and the supporting research team have only begun to analyze all of the data gathered, for the moment these trends are sufficient cause for concern. The Public Service is heading into a period of significant transition: its human resource management framework will be changing; the economy, the environment, health care and international relations present serious challenges; and, next year, the political leadership of the Government will change with the announced retirement of the current Prime Minister, followed by a federal election at the end of the current mandate. All this will occur at a time when many baby-boom generation executives will be retiring. If the Public Service is not able to rely on a core of executives to lead and support the coming transitions, there will be serious repercussions for the Public Service and for Canada.

The good news is that both the APEX study and executive responses to the Public Service Employee Survey indicate a high level of commitment and a high level of job satisfaction among EXs.

Just over half (50.8%) of the executive community completed the Employee Survey; overall, they responded very positively. For example:

• 97% are proud of the work they do;
• 92% believe that their department or agency is a good place to work;
• 100% are committed to making their organizations a success;
• 95% believe that their organizations treat them with respect; and
• 93% are satisfied with their careers in the Public Service.

However, there were negative responses that mirror some of the APEX findings:

• 49% of executives feel pressured to work extra hours;
• only 22% believe that they can complete their work within regular hours; and
• 60% of executives don't believe that they can balance their personal, family and work lives.

The Committee discussed the results of these studies, particularly the APEX health study, and concluded that no specific recommendations could be made. Public Service work environment issues are cultural and can only be effectively addressed by the leaders of the Public Service themselves with support from the political leaders of the federal government. The Committee believes that the human resource modernization proposals tabled by the Treasury Board President can begin this change process. The Committee strongly supports and applauds this initiative.

Modernizing the Legislative Framework

The briefing that the Advisory Committee received about proposals to modernize the human resource management framework indicated movement on a number of fronts, many of which were identified in the third and final report of the previous Advisory Committee on Senior Level Retention and Compensation, known as the Strong Committee after its Chairman, Lawrence F. Strong.

In its Third Report, the Committee made specific mention of simplifying the staffing process and establishing a direct link between the authority to choose/hire managers and the accountability for their performance. With respect to compensation, the Third Report stated the Committee's belief that it would be increasingly important to ensure a meaningful link between results and rewards. The Committee suggested that the demographics of the Public Service leadership cadre, as well as the scale and uniqueness of the institution and the need for cultural change, underscored the importance of having leading-edge management development programs. Finally, the Committee noted that clarifying accountabilities for human resource management was key. All of these are addressed in the Government strategy to modernize human resource management in the Public Service recently announced by the President of the Treasury Board.

Overall, the Committee is pleased with the Government's proposals. While increasing managers' responsibilities for human resource management, these proposals will provide managers with additional tools and flexibilities to achieve what is expected of them. The next critical piece is the accountability to use the new tools and flexibilities with demonstrable fairness to ensure a highly qualified, professional, representative and non-partisan Public Service.

Performance Management Program for Executives

The Performance Management Program for Executives (PMP) can play a significant role in ensuring that the proposed human resource management strategy is successful and that the working environment improves to relieve some of the pressure on executives and employees alike.

In its Fourth Report, the Advisory Committee expressed concern about the application of the PMP and indicated its intention to review the Program Guidelines. The Fifth Report encouraged the Treasury Board Secretariat to follow-up on the results of a preliminary effectiveness assessment of the Program which confirmed that, though generally well designed, the PMP was not being applied as rigorously as it should.

At-risk pay is an integral part of executive total compensation. The valuation of Public Service executives' total compensation for comparison with the outside market presumes that a fully competent executive achieving significant results and making a substantial contribution to the achievement of the organization's priorities will receive a reasonable lump sum award. However, at-risk pay must be earned; it is not an entitlement.

The Performance Management Program was designed and intended to be more than just another vehicle by which to provide compensation: it was intended as a tool to support organizational and individual accountability for the achievement of results and to promote continuous performance improvement. For the PMP to be truly effective it must be rigorously, fairly and consistently applied to differentiate and reward individual performance linked to the achievement of organizational plans and priorities.

The Committee believes that the current application of the Program by departments is resulting in an unreasonable distribution of ratings, which could undermine the PMP's credibility. The Committee is aware that the existing three level rating scheme (Did Not Meet, Succeeded, Surpassed) is limited and that some departments are wisely using the Program's flexibility to assign varying lump sums to different standards of performance even within the same rating level. (This is the common practice of denoting plus and minus performance, e.g. Succeeded Plus). Nevertheless, the Committee is also aware that other departments and agencies are simply 'averaging out' at-risk lump sums so that everyone receives roughly the same amount, effectively an entitlement approach. This latter practice is clearly contrary to the intent of the PMP.

Performance and the achievement of results have two components: what is achieved and how it is achieved. Based on some of the results of the APEX health study and the Public Service Employee Survey, the Committee believes that inadequate attention and weight are being given to how executives are achieving results and how they are managing people and priorities. Improving leadership and management skills ought to be an important focus for the Government, for the benefit of the Public Service as a whole and for the benefit of executives and employees as individuals. Strengthening the Performance Management Program and increasing accountability for how functions are performed and results achieved can contribute significantly to improving the working environment in the Public Service.

Combining a more rigorous assessment of what results are achieved, linking them to departmental plans and priorities and assessing how results were achieved, provides ample opportunity for clearly differentiating performance and rewarding it accordingly.

The Committee reviewed proposals developed by the Treasury Board Secretariat to bring about the required improvement to the Performance Management Program. These proposals included revised Guidelines to assist departments and to clarify expectations for the Program, with communications and learning events to support the desired changes. In order to improve the PMP and support the cultural change represented by the strategy to modernize human resource management in the Public Service, the Committee recommends that:

• revisions to the PMP Guidelines be finalized and implemented immediately with the 2003-04 performance cycle.

Finally, the Committee reiterates its earlier recommendations that the government consider:

• publishing the results of the Performance Management Program annually; and
• adopting the private sector practice of using reasonable financial compensation when it is in the best interests of the individual and the government that the employment relationship be terminated.

Summary of Conclusions and Recommendations

In summary, we:

• believe that trends indicating that stress and workloads are wearing down Public Service executives are cause for concern, particularly as the institution heads into a period of significant transition;
• are very supportive of the human resource modernization proposals tabled by the Treasury Board President;
• conclude that the Performance Management Program for Executives (PMP) can play a significant role in ensuring that the proposed human resource management strategy is successful and that the working environment improves for executives and employees alike;
• believe that the application and results of the PMP must continue to improve;
• recommend that revisions to the PMP Guidelines be finalized and implemented immediately with the 2003-04 performance cycle;
• recommend that the government consider publishing the PMP results annually;
• recommend the government consider using reasonable financial compensation to facilitate the termination of employment when it is in the best interests of the individual and the government; and
• believe that improving leadership and management skills should be an important focus for the Government.

Conclusion

There were many positive things for the Advisory Committee to point to in this Report. The compensation methodology for EXs and DMs has proven itself to be sensitive and responsive. The compensation principles, structure and methodology for CEOs of Crown corporations have been reviewed and found to be consistent with practices both in Canada and abroad. The APEX health study and executive responses to the Public Service Employee Survey indicate a high level of commitment and a high level of job satisfaction among EXs. The Government's proposals to modernize the Public Service human resource management framework clarify responsibilities and provide improved tools to managers at all levels. Changes to the Performance Management Program for Executives, developed by the Treasury Board Secretariat, will provide strong support for organizational change efforts that are important to modernization by strengthening links to accountability for results, leadership competencies and people management skills.

Nevertheless, senior level federal public servants will continue to face many challenges during the next few years. The Government and the senior levels of the Public Service must not only drive the change process but also provide leadership by demonstrating, recognizing and rewarding management competency, particularly for leading and inspiring other employees.

It is imperative for all Canadians that the Public Service remains capable of attracting and retaining highly qualified, competent leaders. The Committee, through its work and recommendations, strives to support the accomplishment of this objective. The Committee believes that the Public Service is a good place to work and that efforts to improve management and accountability will make it even better.

Appendix A

Advisory Committee on Senior Level Retention and Compensation
Committee Members

Carol M. Stephenson, B.A. (Committee Chair)

Dean, Richard Ivey School of Business

Ms. Stephenson has been elected Dean of the Richard Ivey School of Business at the University of Western Ontario. She takes up her new duties as of July 1 of this year. As President and Chief Executive Officer of Lucent Technologies Canada from July 1999 to February 2003, Ms. Stephenson led the Lucent Canada team in growing the company's business across Canada and expanding and developing Lucent's involvement in the communications industry. Prior to this she was President and Chief Operating Officer (The Americas) of BCE Media, Inc.; President and Chief Executive Officer of Stentor Resource Centre Inc.; and Vice-President of Bell Canada. Ms. Stephenson is a graduate of the University of Toronto. She has also completed the Executive program at the Graduate School of Business Administration, University of California at Berkeley, as well as the Advanced Management Program at Harvard University. She also holds an honorary doctorate in engineering from Ryerson Polytechnic University.

Robert E. Brown, B.Sc.

Vice Chairman, Board of Directors, Air Canada

Mr. Brown was appointed Vice Chairman of the Board of Directors of Air Canada in April 2003 and will become Chairman of the Board in May of 2003. He was President and Chief Executive Officer of Bombardier, Inc from February 1999 to December 2002. Prior to that he was President and Chief Operating Officer of Bombardier Aerospace; President of the Bombardier Aerospace Group - North America; Senior Vice-President, Corporate Development and Strategic Planning - Bombardier; Vice-President, Corporate Development - Bombardier. In addition, Mr. Brown has held senior federal public service positions, including Associate Deputy Minister, Department of Regional Industrial Expansion. He has also held positions with Atomic Energy Canada, the Public Service Commission, the Treasury Board Secretariat and the Council of Maritime Premiers. Mr. Brown holds a Bachelor of Science degree from the Royal Military College in Kingston and has attended the Advanced Management Program at Harvard Business School.

John L. Fryer, C.M., B.Sc. (Econ.), M.A.

Adjunct Professor, University of Victoria

Adjunct Professor, School of Public Administration, University of Victoria; President Emeritus, National Union of Public and General Employees (NUPGE). Mr. Fryer is a member of the board of directors of the International Centre for Human Rights and Democratic Development; former Chair of the Advisory Committee on Labour-Management Relations in the Federal Public Service (1999-01). Mr. Fryer was a member of the Advisory Committee on Senior Level Retention and Compensation (1997-2001), chaired by Lawrence F. Strong.

Gaétan Lussier, O.C., B.Sc. (Agr.), M.Sc., Ph.D.

President, Gaétan Lussier and Associates

Past Assistant Deputy Minister and Deputy Minister, Québec Ministry of Agriculture; Past Deputy Minister of Agriculture Canada; Past Deputy Minister and Chairman, Employment and Immigration Canada; Past President, Les Boulangeries Weston Québec Inc.; Past President and Chief Executive Officer Culinar Inc. Mr. Lussier was a member of the Advisory Committee on Senior Level Retention and Compensation (1997-2001), chaired by Lawrence F. Strong. Mr. Lussier serves on a number of boards of directors.

Sarah E. Raiss, B.Sc., M.B.A.

Executive Vice-President, TransCanada Pipelines

Sarah Raiss is currently Executive Vice-President of Corporate Services and is responsible for human resources, government relations, community investment, communications and information systems. Prior to this position with TransCanada Pipelines Limited, she was President, of S.E. Raiss Group, Inc.; Vice President of Customer Service, Training and IT Support at Ameritech; Senior Consultant at Metzler & Associates; as well as holding various positions with Michigan Bell. Ms. Raiss holds a Bachelor of Science in Applied Math and a Masters of Business Administration in Strategic Marketing and Organization Behaviour from the University of Michigan.

Tom Traves, B.A., M.A., Ph.D.

President, Dalhousie University

Dr. Traves has been the President of Dalhousie University since 1995. He serves on the Boards of the Directors of the Maritime Life Assurance Company, Clearwater Fine Foods, InNOVAcorp, Greater Halifax Partnership and is Chair of the Academic Advisory Committee of the Institute of Canadian Bankers. He is past-Chair of the Atlantic Association of Universities and the Association of Universities and Colleges of Canada Standing Committee on Educational Issues and Funding. Previously, he served as Vice-President (Academic) at the University of New Brunswick in Fredericton and as Dean of Arts at York University in Toronto. Dr. Traves has a B.A. from the University of Manitoba, an M.A. and Ph.D. from York University and an honorary doctorate from Umea University in Sweden in 1997.

Appendix B

Committee Mandate

To provide independent advice and recommendations to the President of the Treasury Board concerning executives, deputy ministers and other Governor in Council appointees of the federal Public Service and public sector on:

• developing a long-term strategy for the senior levels of the Public Service that will support the human resource management needs of the next decade,
• compensation strategies and principles, and
• overall management matters comprising among other things human resource policies and programs, terms and conditions of employment, classification and compensation issues including rates of pay, rewards and recognition.

To present recommendations in a report to the President of the Treasury Board. The report will be made public by the President of the Treasury Board.