B.C.'s Transportation Minister Todd Stone was pleased with the changes, but the Canadian Taxpayers Federation panned the move, saying the cuts don't go deep enough.
Instead of getting bonuses, senior executives will have some of their salaries held back and those wages will be payable only when set targets are reached.
Once the holdback plan is fully in place, the board said salaries for executives and managers will be frozen until 2016.
The changes mean BC Ferries CEO Michael Corrigan's total compensation will be $500,730 in 2014, down from $915,000 in 2012. Compensation will drop for senior executives Glen Schwartz and Robert Clark by around $200,000.
While Transportation Minister Todd Stone had requested changes, board chairman Donald Hayes said BC Ferries voluntarily made the decision.
"Every organization needs to be mindful of stakeholders' input and part of the job of the board of directors is to weigh the input that you're getting and make appropriate decisions," Hayes said. "We worked very hard to make amendments that would satisfy our stakeholders."
The provincial government doesn't have direct control over the ferry service, but the government and taxpayers are BC Ferries' only shareholders.
Jason Bateman, the B.C. director of the taxpayers federation, wasn't satisfied.
"BC Ferries' board of directors has again proved how out of touch they are with taxpayers. Instead of cutting executive pay, they kicked the can down the road for two years with a pay freeze, and failed to address the real problem with their bonus structure: too-easily achievable goals," Bateman said in a news release.
The federation presented Stone with a 3,200-name petition last month calling for changes to executive pay at BC Ferries.
Stone said Wednesday he was pleased with what the board did.
"For anyone to suggest that this isn't a good result for taxpayers of British Columbia — I'm not sure where their head is at on that," he said. "These changes are going to save taxpayers and the riders at BC Ferries $900,000 per year at minimum and potentially more."
Comparisons have been made with the pay for executives in Washington state's ferry system, where the head makes less than $170,000 with no bonus.
Hayes said the comparison doesn't work.
"It's a completely different business and business model and different service that Washington state provides than BC Ferries."
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