Not long after Mike Harris left the Ontario Premier’s Office in 2002, he embarked on a new career as a corporate director. Nearly two decades later, Chartwell Retirement Residences – Canada’s largest operator of retirement homes – has become his longest-running, and likely most-lucrative, part-time gig.
It might also become his most controversial. Chartwell, like many other operators of retirement and long-term care homes, is in the spotlight as COVID-19 kills thousands of Canadians, many victimized as the virus sweeps through their care facilities. This has amplified the concerns of elder advocates, who have long questioned deregulation of the long-term care industry and the proliferation of the for-profit model in retirement care. (Long-term care, specifically, is about 10 per cent of Chartwell’s business.)
As it happens, Ontario’s deregulation of the sector occurred during Mr. Harris’s “common sense revolution” of the late 1990s. And about a year after his premiership ended, he joined Chartwell’s board as its chairman.
Through Chartwell, Mr. Harris declined to speak to me for this piece. In a statement, Chartwell spokeswoman Sharon Ranalli said Mr. Harris’s government “undertook the largest reform and investment in Ontario’s history to expand long term care for the province’s seniors … Mr. Harris’s drive and passion to provide great services and quality care to our aging population was one of the reasons he was asked to join Chartwell as Chair in 2003 and continues to serve in this capacity to this day.”
Here’s what has been in it for Mr. Harris: A review of Chartwell’s proxy circulars shows that over those 18 years, Chartwell has paid him about $3.5-million for his services, the bulk of it in Chartwell stock. It’s an average of roughly $200,000 a year for what is supposed to be a part-time job.
Those compensation numbers do not include dividends on his shares. For example, while Chartwell reported his board compensation as $229,500 in its proxy circular in 2019, stock-ownership records filed with regulators show Chartwell gave Mr. Harris shares worth $405,000 that year, when the dividends are included.
Mr. Harris must hold the shares until he leaves the board. All told, his holdings, which include shares purchased on the open market, are worth roughly $6-million today. The stock holdings “represent his personal belief in the value Chartwell provides to society and his confidence in Chartwell as a sound investment,” Ms. Ranalli said.
On several occasions from 2003 to 2014, Mr. Harris received a low-interest loan to purchase a total of roughly $600,000 in shares as part of a long-term incentive plan. Chartwell placed the shares in a special account, where the dividend payments on the shares were used to pay off the loan so Mr. Harris could own the stock free and clear. (In response to questions, Ms. Ranalli of Chartwell says these shares “are not compensation” and should not be included in his pay total.)
Also, from mid-2010 to 2019, Chartwell directors who chose to get their directors’ fees paid in stock, rather than cash, got a one-for-one additional company match – effectively doubling their pay. That meant that in each year of the plan, Mr. Harris received about $230,000 in annual compensation, rather than the roughly $115,000 in annual cash fees.
Ms. Ranalli says the company’s stock plans have created “alignment of participants with the interests of Chartwell and its unitholders,” and its outside compensation advisers have told Chartwell the company’s pay plans are “at or slightly below” similarly sized companies.
To focus too much on Chartwell, however, would overlook how Mr. Harris turned corporate-board work into a highly lucrative full-time career.
A review of corporate filings shows Mr. Harris has sat on at least 16 public- or private-company boards at various times in the 18 years since he left the premier’s job and made more than $14-million in compensation for his work. For several years, he sat on six or seven company boards and his total board income ranged from $1.2-million to $1.5-million annually. (In recent years, governance advocates have increasingly trained their eye on “overboarded” directors, who they felt couldn’t devote an appropriate amount of time to every board they sat on if they had four or more assignments.)
For several board seats, he collected more than $1-million in cash and stock over his tenure, including his current seat Canaccord Genuity Group Inc., held since 2004, and Colliers International Group Inc. He may also have received as much from EnMax, the City of Calgary’s utility, where he served from 2006 to 2017 and received total of nearly $800,000 in his final eight years on the board.
Mr. Harris’s history as a director shows that he likes to be paid in stock and stock options. That means that Mr. Harris has probably taken home even more than $14-million: Over time, as the stock has grown in value, he’s presumably sold shares after leaving boards (and when disclosure requirements no longer apply, making the numbers impossible to tally).
Some of the companies failed to assign any value to his stock options, thereby understating his pay at the time. In several cases at tiny public companies, the options expired unused, because the company’s stock simply didn’t do so well. One example: Route 1 Inc., a money-losing, TSX Venture Exchange-listed data-security company where he received a combined three million stock options soon after becoming chairman in 2009. Had the company boomed, it could have been his most lucrative directorship. Alas, all those options expired with no value.
But other directorships have been winners. Mr. Harris spent five years on the board of what is now known as Element Fleet Management. He received stock options initially valued at just under $400,000 – but when he left in April, 2015, the unrealized profits were about $1.5-million.
Previous to Chartwell, Mr. Harris’s most-lucrative public-company gig was Magna International Inc., his first board assignment after leaving office. He served as its chairman during the controversial period when Magna cashed out its founder Frank Stronach for more than $1-billion; the sheer number of meetings Mr. Harris attended helped his compensation range from $550,000 to $750,000 four years in a row.
Mr. Harris left Magna’s board in 2012, and he has a lighter load today than in his peak years of service. He turns 76 on Saturday, and he’s already been forced to offer his resignation at Canaccord because of its age-based retirement policy, an offer that Canaccord’s board has declined. But as Mr. Harris continues his golden years of gold-plated board service, he may decide the challenges will outweigh these very considerable rewards.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.
Donald Trump's political organization builds war chest topping $100 million – CNN
Biden's Buy American push is good politics but bad economics – CNN
‘It’s like being for puppies’
ANC factions stir ‘dangerous politics’ in South Africa’s towns – Financial Times
Thapelo Mohapi looks at the mangled and scorched scraps of what were once shacks and reflects quietly that, at 38, twice now have the flames of political violence in South Africa left him without a home.
The first time, as a boy in the 1980s, Mohapi was given shelter by Indian neighbours in the Durban settlement of Phoenix when the brutal last days of apartheid engulfed the nearby black township where he lived. It was part of solidarity that would in time give rise to a multiracial democracy. “The Indian community never said at any stage that you are not part of us,” he says.
The second time was the night of July 14. As riots and looting sparked by a power struggle in the ruling African National Congress swept heartland regions, destroyed businesses and left more than 300 dead, a fire burnt through the homes of Mohapi and hundreds of others in an informal settlement in Durban’s Briardene suburb. “The fire brigade couldn’t reach it in time because of the unrest,” Mohapi says. For now, he is living in a friend’s car and in donated clothes.
What President Cyril Ramaphosa labelled an “attempted insurrection” in Gauteng and KwaZulu-Natal, two provinces that make up half of the gross domestic product of Africa’s most industrial nation and nearly half of its population, was only put down with the deployment of tens of thousands of troops.
The violence had begun as reprisals for the jailing of former president Jacob Zuma for contempt of court — a victory for the rule of law and the country’s democratic principles under Ramaphosa. Zuma had defied a constitutional court order to attend an inquiry examining his role in corruption so widespread that it hollowed out institutions under his presidency, according to the testimony of dozens of witnesses. He was forced to resign in 2018.
After winning the ANC leadership in 2017 by a narrow margin, Ramaphosa stabilised the party’s decades-long grip on power in a 2019 election and has slowly isolated his predecessor’s closest allies. But the unrest signals that he is confronting a faction who in order to avoid jail are prepared to sacrifice a weakened state — and manipulate social divisions.
Phoenix, Mohapi’s old refuge, was also swept up in the fallout. As police vanished amid looting, tragedy unfolded in a microcosm of South Africa’s complex race relations. As street barricades were thrown up against looters, armed vigilantes emerged and “people that had lived side-by-side in relative peace turned on each other”, Ramaphosa said last week. At least 20 people were killed in the clashes in a township that is majority Indian but where many black South Africans live and work.
The looting was a threat without police on the ground but “in the racial profiling of our African brothers and sisters, some took the law into their own hands — and they were gangsters,” Marvin Govender, general secretary of Phoenix’s residents association, says.
The state was absent, failing to stop both the vigilantes and the looting, Govender says. Chris Biyela, the convener of a post-unrest Phoenix peace committee, agrees that “if the government responded forcefully in this manner, many lives would have been saved”.
In the chaos of the ANC’s factional battle, even the fire in Briardene appears suspect. Mohapi is a spokesman for Abahlali baseMjondolo, a movement that represents informal dwellers. With 100,000 members, it is a fierce critic of the ANC and has often received threats. The day before the fire, Abahlali released a statement that blamed “people who are pushing the agenda of the Zuma faction in the chaos”.
The group also fell victim to attempts to stir up a race war when a statement it issued calling for calm in Durban, KwaZulu-Natal’s largest city, was doctored with anti-Muslim vitriol, and then spread on WhatsApp.
With mounds of garbage choking the air and broken sanitation, the state has failed Briardene’s informal settlement dwellers. Mohapi has every reason to be cynical about the country’s post-1994 gains. But after what he sees as an assault from within the ANC “to divide the poorest from the poor” and destroy the basis of South Africa’s freedom and its unfinished racial reconciliation, he is more determined than ever to defend them.
“Nelson Mandela would be turning in his grave. This is not what he fought for,” he says. “We can’t be taken back to where we were. We can’t sacrifice that because one man is in prison.”
A warning from history
South Africa received a prophetic warning as far back as 1997 that one day the difficult transition to democracy might be betrayed from within.
Such an attack, the document said, would involve “setting up intelligence and armed networks parallel to and within the state to sabotage change through direct political activity or aggravation of such social problems as crime”, and erosion of governance through “deliberate acts of corruption driven not merely by greed”.
The prophet was the ANC itself — and while the warning was a reference to those still clinging on to apartheid, it accurately describes how decay of the state under the party has created forces that led to insurrection.
Systematic looting of state institutions during the Zuma presidency is well documented. Less visible has been the culture of impunity that was allowed to grow at the bottom, as police and other authorities were compromised by their political masters.
“The whole state has been criminalised,” Mary de Haas, an expert on KwaZulu-Natal’s political violence, says. “We had corruption, but we have been criminalised in the last 10 years . . . there are all sorts of mafia and criminal networks that would jump on this bandwagon.”
The impunity has spread to threaten investments needed to restart the stagnant economy, particularly in Zuma’s home province. In June, Rio Tinto was forced to suspend mineral sands mining in KwaZulu-Natal after security threats and the murder of a manager. From construction to security, businesses in the region say they are used to gangs with alleged ANC links demanding a cut. Ramaphosa admitted recently that extortion rackets have already begun targeting reconstruction following the unrest.
“There is very little crime intelligence coming from this province,” de Haas says. Intelligence officials “admit that the whole thing is factionalised. Then you get to national intelligence, and that’s even worse. Zuma captured the whole of intelligence, basically.”
An official 2018 report warned of “politicisation and factionalisation of the civilian intelligence community based on the factions in the ANC”, including “serious criminality” in the embezzlement of cash. The state capture inquiry heard this year that a rogue spy unit with a direct line to Zuma was used to target his political opponents.
Such testimony appears to have infuriated the former president. “Every country has its own secrets and things that are not publicly spoken about,” Zuma told supporters at Nkandla, his homestead in rural KwaZulu-Natal, before his arrest for defying the inquiry. His supporters fired off weapons and threatened police, before Zuma was taken into custody by his own state protection in the dead of night.
Senior ANC politicians were still arguing that Zuma should be freed even as the violence spread.
“The politicians and their cronies are attempting to brew and encourage a very, very dangerous politics that is building fear and anger with the aim of dividing people along lines of nationality of origin, ethnicity and race,” the Abahlali group says.
Food as a political weapon
The most chilling part of what Ramaphosa called “deliberate, well-planned and co-ordinated” targeting of infrastructure in the unrest were attacks that seemed tailored to exploit South Africa’s inequality, especially insecurities over food. Truck burnings shut down a major food supply route, the motorway between Durban and Johannesburg, Gauteng’s provincial capital. Supermarkets were attacked and then their distribution centres hit.
“It really dawned on me when I realised that not only were the warehouses being emptied out [by looters], they were also attacking the packaging industry . . . one of the big aims was to bring access to food to its knees,” says Mervyn Abrahams, co-ordinator of Pietermaritzburg Economic Justice and Dignity, an NGO based near Durban. “You are creating conflict between those who are poor and those who are middle class just to access the food that is available.”
Activists in KwaZulu-Natal say soldiers and police reinforcements came just in time to stop the total collapse of the supply chain and prevent an even worse second wave of riots driven by those who might not have eaten in days.
It reflected another facet of South Africa’s absent state, worsened by the pandemic — a hunger crisis that has silently swept the poorest, as social protection has fallen short and the economy has sputtered.
GDP per capita has flatlined since Zuma’s presidency and unemployment has soared, with 43 per cent of the working age population without a job or discouraged from looking for one at the start of this year. Even many of those with jobs are in a precarious position. Around half of the average minimum wage worker’s monthly pay of about 3,600 rand ($247) is eaten up by transport and electricity costs even before food bills, estimates Pietermaritzburg Economic Justice and Dignity. A safety net of welfare grants, covering about 18m people, has also grown threadbare and no longer reflects the cost of living.
In July, a basic nutritious diet for a South African child for the month was estimated to cost about R724, or about $50. The monthly child support grant is R460. Stunting rates in children — an indication of malnutrition — have remained stubbornly high since 1994, at about a quarter or more. The effects are felt decades later, in poor school results, a life on the margins of the job market and long-term health problems. “Each year we reap what was sown 30 or 25 years ago,” Abrahams says.
Saddled with high debts that are approaching 90 per cent of GDP, Ramaphosa’s government bet on riding out a series of pandemic lockdowns with minimal fiscal relief. This only prolonged the agony. In July, the country’s treasury reinstated a temporary monthly grant of R350 for the jobless that it had cut just months earlier. It will last until March.
After the unrest’s wake-up call, civil society is pushing for more permanent transfers. A basic income grant for South Africa’s 11m unemployed would cost R78bn a year if it paid out just enough per month to keep them above the food poverty line of R585, according to the Institute for Economic Justice, a Johannesburg-based think-tank. But the middle class is likely to balk at the tax rises needed to pay for this, or additional borrowing for larger grants.
“We pay for all of this in other ways in the economy,” Abrahams says. Millions have moved to shacks in the midst of major cities to find work. This proximity is part of why the unrest flared so quickly. “Now ‘the poor’ are right on our doorstep. Higher walls and more security are really not going to protect us.”
Had a safety net been in place, even with political instigation of the riots, “would they have been able to get so many people in the townships to support them, just because they wanted to get food?” asks Abrahams. “It would not have happened at the scale it has now.”
‘Crying for bread’
Organisers in communities across South Africa worry that poverty is about to get much worse in the aftermath of the unrest. “Those who did not loot, do not have food now,” Mohapi says. “People are crying for bread.”
Acts of solidarity have helped residents in Briardene. A Muslim charity has delivered bread and milk. Tents provided by Doctors Without Borders and Abahlali house dozens who were displaced by the shack fire. But private initiatives alone cannot replace the state.
“I’m afraid that the solidarity that had been built, particularly at the bottom of our society, will be placed under huge pressure in the context of what has happened,” says Imraan Buccus, an analyst with the Auwal Socio-Economic Research Institute. “We need to be on the lookout. We are at a fragile point in our democratic post-apartheid phase. Our state has not done what it needed to do.”
July also marked the 30th anniversary of Mandela’s post-prison election as leader of a very different ANC, as apartheid was crumbling and a new democracy was being born. Joining Mandela as party secretary-general and deputy to that role were two politicians of the next generation: Ramaphosa and Zuma. One all but destroyed Mandela’s governing legacy; the other is running out of time to restore it.
Ramaphosa’s first term as party leader is now all but over. The next leadership vote is due at the end of 2022. Most agree that he will probably just about secure a second term. If so, KwaZulu-Natal, the region with the most ANC members, is not a province easily defied. Zuma is in prison at least for the next few months and his acolytes who inflamed tensions may soon join him. But his politics of impunity and patronage live on.
“There is a reluctance on the part of the ANC. They are scared. They don’t want to rock the boat in this province,” de Haas says. “There are a hell of a lot of people who have a lot to lose if the ANC cleans up its act.”
Ordinary South Africans lost even more in the unrest. From below, their anger is growing. “The ANC is rotten and it should be removed. It does not represent the ideals of Mandela,” Mohapi says. Otherwise, he fears, “we are heading for disaster. We will have riots after riots.”
N.B. COVID roundup: 5 possible exposures reported – CBC.ca
A ‘safe space for racists’: antisemitism report criticises social media giants – The Guardian
New art gallery exhibit features ceramics inspired by Japanese aesthetics – moosejawtoday.com
Silver investment demand jumped 12% in 2019
Europe kicks off vaccination programs | All media content | DW | 27.12.2020 – Deutsche Welle
Iran anticipates renewed protests amid social media shutdown
Health22 hours ago
Majority of COVID-19 cases at large public events were among vaccinated Americans: CDC study – CTV News
Sports18 hours ago
Olympic viewing guide: Andre De Grasse goes for gold, Penny's last shot – CBC.ca
Media13 hours ago
Former Winnipeg Jets forward Mathieu Perreault first media availability with the Habs – Illegal Curve Hockey
Health16 hours ago
A look at COVID-19 reopening plans across the country – BradfordToday
Sports17 hours ago
Andre De Grasse cruises into Olympic 100m semifinal with season-best time – CityNews Toronto
News19 hours ago
How can Canada avoid a fourth wave of COVID-19? Doctors weigh in – CTV News
Science19 hours ago
Russia reports pressure drop in space station service module – Yahoo News Canada
Media22 hours ago
Why Rabid Fans Are Catching iHeart Media’s Rewatch Podcasts – Forbes