Evidence of meeting #18 for Access to Information, Privacy and Ethics in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was carney.
A video is available from Parliament.
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands—Rideau Lakes, ON
That basic reality doesn't change simply because those instruments would be placed in a blind trust. The value would still rise when the value of Brookfield rises. Is that correct?
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands—Rideau Lakes, ON
If someone holds Brookfield options and units in a blind trust or not, they personally benefit when Brookfield performs well. Isn't that right?
Chief Operating Officer, Brookfield Corporation
Anybody who holds those instruments, whether during employment or following employment, derives the benefit from those instruments. That's correct.
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands—Rideau Lakes, ON
Also, any instrument can be sold, bought back, cash-settled or unwound in an instance where, for example, Parliament required, by law, divestment by sale. That possibility exists. Is that correct?
Chief Operating Officer, Brookfield Corporation
The Prime Minister would have certain instruments as part of our long-term incentive plans. There are certain instruments that are less liquid than others. I'm happy to get into the details of that if you wish.
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands—Rideau Lakes, ON
I would, but the premise is what I need to settle. They can be sold, bought back, cash-settled or unwound. It is possible should it be a requirement. Is that correct?
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands—Rideau Lakes, ON
Thank you.
They're long-dated. We get that. However, that's generally how compensation contracts work. That's not something unique to Mr. Carney, since you brought him up.
Chief Operating Officer, Brookfield Corporation
Long-term...yes. In some cases, it's exercisable in shorter horizons, and in some cases, the ultimate value is received far into the future.
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands—Rideau Lakes, ON
Can you explain briefly how stock options or deferred share units and notional long-term incentive plans work at Brookfield? What drives their value?
Chief Operating Officer, Brookfield Corporation
Yes, I would be happy to, and I will try to be brief.
Helpfully, all disclosure relating to Brookfield stock options and deferred share units is disclosed in detail in our public filing, so it's very much available.
In a nutshell, stock options are rights to acquire shares of Brookfield at a certain price. Those exist and, during their pendency, are exercisable subject to vesting, because when we award them, people take subject to vesting schedules. Therefore, even though you were awarded them, they have to vest during the time you are with Brookfield, and then they're exercisable for stock that can then be sold into the market.
Deferred share units are slightly different. They also track the value of a Brookfield share, but they are not actually shares. When they mature, they are paid out to the individual, based on the value of the share at that time. They are the second component to some of our LTIP programs.
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands—Rideau Lakes, ON
Are you able to give us an approximate value range of the options and deferred share units that Mr. Carney still holds?
Chief Operating Officer, Brookfield Corporation
As I said in my response letter, that's personal and private information. That's not something that Brookfield is permitted to disclose to the committee.
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands—Rideau Lakes, ON
I will say that you enjoy parliamentary privilege while you're at this table, and this committee is not constrained in its ability to request information or documents. However, I'll move on for the moment.
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands—Rideau Lakes, ON
Increases in Brookfield's performance increase the value of the instruments that Mark Carney still holds, so he makes more when Brookfield does better. Is that correct?
Chief Operating Officer, Brookfield Corporation
In relation to the stock options and deferred share units...yes. As the value of Brookfield increases, the value of those instruments increase. There are also carried interest entitlements that relate more specifically to funds we manage.
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands—Rideau Lakes, ON
Speaking of funds, the global transition fund is one that Mr. Carney was directly involved in. Are you able to provide us with details of the investments inside it that drive the value of his position or of those who hold a position in it?
Chief Operating Officer, Brookfield Corporation
I believe you're referring to Brookfield global transition fund I, which was launched during the time that the Prime Minister was with Brookfield. I can confirm that all of the investments made in that fund are contained in the annexure to the commissioner's screen document, which has been published.
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands—Rideau Lakes, ON
We're going to have to come back to some of this, but this is my last question. With the Prime Minister still holding compensation that rises with Brookfield's performance, how would Canadians be able to have confidence that a blind trust and a private screen are enough to protect the public interest? You agreed that when Brookfield does better, the Prime Minister is going to do better.
Chief Operating Officer, Brookfield Corporation
That's a very fair question.
Conservative
Chief Operating Officer, Brookfield Corporation
I think it's based on whether or not the conflicts can be managed, and I'm happy to talk about that further.
Conservative
The Chair Conservative John Brassard
Thank you, sir.
Ms. Lapointe, you have the floor for six minutes.
Mr. Beber, I believe you speak both official languages.
Maybe put your earpiece in, just in case. Thank you.
Go ahead, Ms. Lapointe.