Bombardier scion giving up exec chairman job; first-quarter loss narrows

By Allison Lampert

(Reuters) - Bombardier Inc Executive Chairman Pierre Beaudoin is giving up management responsibilities after an outcry over compensation, but will continue to lead the board, the company said on Thursday as it reported a smaller-than-expected quarterly loss.

Beaudoin, a scion of Bombardier's founding family which control the company through a dual class share structure, will continue as non-executive chairman, despite calls from several key shareholders for an independent director at the helm.

Canada Pension Plan Investment Board (CPPIB), and Caisse de depot et placement du Quebec, joined other large Canadian funds this week in withholding their votes for Beaudoin's re-election at Bombardier's annual meeting on Thursday.

It's not clear how non-Canadian investors in the Canadian train and plane maker intend to vote.

"In our view, this decision will likely be perceived positively by investors," wrote Desjardins analyst Benoit Poirier in a note to clients.

Bombardier's decision in March to award its top five executives and chairman with raises of up to 50 percent a few months after announcing thousands of layoffs and receiving more than $1 billion in government funding sparked widespread protests and a dressing down by Canadian Prime Minister Justin Trudeau.

Beaudoin later agreed to forgo his raise while other executives deferred them.

Earlier in the week, shareholders like Caisse, reiterated their support for Bombardier Chief Executive Officer Alain Bellemare, who is leading a five-year turnaround plan.

"This change reflects the very successful transition of Bombardier's executive leadership to Alain over the past

two years," Beaudoin said in a statement about stepping down as executive chairman.

Even without the raise, Beaudoin's 2016 executive chairman compensation of $3.8 million was questioned by a family member, arguing he should focus solely on leading the board, and benchmark his salary to industry norms.

One analyst, who spoke on condition of anonymity because he is not authorized to talk to the media, called the change largely "symbolic" because Beaudoin remains chairman.

A non-executive chairman does not interfere with day-to-day matters and the separation of executive and non-executive chairman roles is often seen as a way to improve corporate governance.

Strength in Bombardier's train-making unit helped the company report a smaller-than-expected adjusted first-quarter net loss, the company reported.

Adjusted earnings in its rail business, before interest and taxes, jumped to $134 million from $23 million a year earlier.

The adjusted net loss attributable to shareholders was $1 million, narrower than the loss of $22.8 million that analysts estimated, according to Thomson Reuters I/B/E/S.

On a per-share adjusted basis, the company broke even. Analysts, on average, estimated a 1 cent loss.

Montreal-headquartered Bombardier reported an 8.6 percent fall in revenue to $3.58 billion, missing estimates of $3.84 billion.

(Reporting by Allison Lampert in Montreal and Arathy S Nair in Bengaluru; Editing by Shounak Dasgupta and Jeffrey Benkoe)