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A BC Ferried vessel in Swatrtz Bay, B.C .on Friday, November 21, 2008.

Arnold Lim For The Globe and Mail/arnold lim The Globe and Mail

The BC Ferries board of directors has come to the defence of president and CEO David Hahn's $313,000 pension, directly contradicting Premier Christy Clark who has been highly critical of his compensation package.

Less than 24 hours after Ms. Clark said the pension was "way, way too big," Donald Hayes, chair of the BC Ferries board of directors, said in a news release that the board "fully supports" the decision to pay a pension of $313,000 to Mr. Hahn after 10 years of service.

Mr. Hahn is compensated at private-sector rates, reflecting the expectation that BC Ferries would achieve private-sector standards of performance, Mr. Hayes stated. He declined a request for an interview.

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Mr. Hahn's salary and pension were intended to keep him in B.C. regardless of recruiting efforts from large private-sector corporations in Canada, Mr. Hayes said. His compensation and pension benefits were set after receiving advice from a human resource company, he said.

Mr. Hayes praised the leadership that he said Mr. Hahn provided since his appointment in 2003. "Everyone needs to recall the sad state of affairs that existed just eight years ago when BC Ferries was created as an independent entity," Mr. Hayes said. "BC Ferries was in a crisis state and the organization needed a complete overhaul by private-sector leaders with a track record of success," he stated.

NDP critic John Horgan said Mr. Hahn should be replaced as BC Ferries chairman if he could not justify the compensation package to Ms. Clark's satisfaction "and the satisfaction of British Columbians."

Compensation for the head of BC Ferries, which is a public-sector monopoly, should not be based on private-sector rates, Mr. Horgan said.

The infrastructure - boats, transportation links, terminals and a pattern of traffic over 50 years - was there when Mr. Hahn started working at BC Ferries, Mr. Horgan said. Mr. Hahn was not the only person that could make that work, he said. "I do not believe BC Ferries would stop operating if David Hahn had gone on to work with Coke or Nike," he said.

Ms. Clark should take action, he said. "It is very difficult to justify a compensation package of that magnitude for an executive that came in with … no marine experience and, after 10 years, can head to the doorway with a $300,000 pension. That is just not acceptable," he said.

Mr. Horgan declined to say what he would do with Mr. Hahn's compensation package if he were transportation minister. He said he could not comment without looking at Mr. Hahn's contract.

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The Liberal government turned BC Ferries into a quasi-independent non-governmental corporation in 2003 but continues to provide an annual operating subsidy. This year, the subsidy was $26.9-million.

Under B.C.'s Public Service Pension Plan, Mr. Hahn was entitled to an annual pension of $75,948 if he retired on March 31. BC Ferries makes the full required pension contribution in a defined benefit plan on behalf of Mr. Hahn. BC Ferries negotiated a supplemental retirement benefit agreement with Mr. Hahn in 2006 that provided for an additional annual pension of $237,100 beginning in 2013, when he will be 62.

Mr. Hahn's pay package for 2011 includes a salary of $500,000, incentive pay of $398,735 and a $98,464 payment toward his pension, for a total of $997,199. He also receives a $10,000 payment for health-related expenses, a $10,800 annual vehicle allowance and a ferry travel pass for himself and his family.

Ms. Clark told reporters earlier this week that his annual pension should be in line with pensions in B.C.'s public service.

"Talk about ordinary British Columbians, trying to figure a way to get ahead, and [they]see that pension, funded by our ferry rates. I understand people are concerned about that. I am concerned about that," she said.

"I'm with the rest of B.C. on this. I have trouble understanding this," Ms Clark said.

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But she could do nothing about a pension that was provided five years ago under a legally binding contract, she said. "We are - as far as I can tell - stuck with it," Ms. Clark told reporters Monday.

Neither Ms. Clark nor Transportation Minister Blair Lekstrom were available for an interview Tuesday.

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