Helmets line a shelf in a control room at the Trans Mountain Westridge Terminal on Burrard Inlet in Burnaby, British Columbia REUTERS/Chris Helgren

Canada is paying $3.8 million in retention bonuses for three top Kinder Morgan executives following the government’s $4.5-billion acquisition of the Trans Mountain Pipeline.

The bonuses were originally arranged by Kinder Morgan Canada Inc. in what appeared to be retention awards for its president and two other executives in the months leading up to the Aug. 31 acquisition by the Canadian government.

According to the U.S.-owned pipeline company’s filing with the United States Securities and Exchange Commission in advance of a shareholder vote on the takeover, Kinder Morgan Canada’s board of directors approved the retention bonuses last May 28.

It was the day before Finance Minister Bill Morneau signed a purchase agreement for the acquisition of Trans Mountain Pipelines.

The bonuses were approved for Ian Anderson, then president of Kinder Morgan Canada Inc.; David Safari, vice president of Kinder Morgan Canada’s Trans Mountain Expansion Project, the controversial twinning of the company’s existing pipeline from Edmonton to Burnaby, B.C.; and Scott Stoness, then vice-president of finance and corporate secretary for Kinder Morgan Canada.

The company’s Securities and Exchange Commission filing states Kinder Morgan’s board approved the retention bonus awards “in connection with the Purchase Agreement” and sets out a schedule of payments to the three executives through to July 2020 “provided that the applicable officer remains employed by KMCI through such date.”

Anderson, now president of Trans Mountain Corp., the company’s legal name under Canadian government ownership, would receive a $750,000 bonus if he stayed with Kinder Morgan Inc. through to July 2019 and another $750,000 if he remained employed with Kinder Morgan Inc. through to July 2020.

The filing indicates Anderson was receiving an annual salary of $573,075.

Safari, now vice president of Trans Mountain Corp. under Canada’s ownership, was to have the same retention bonus amount and schedule with Kinder Morgan as Anderson, the Securities and Exchange Commission filing states.

Stoness, now vice president, regulatory and compliance with Canadian-owned Trans Mountain Corp., was awarded a total of $876,000 in retention bonus, on top of his $334,676 salary, if he stayed with Kinder Morgan Canada Inc. through to 2020.

Publications that focus on environmental issues reported earlier this year that Anderson earned a total of $2.9 million in 2017 including salary and other benefits, while Safari’s income and benefits totalled $1.9 million.

The media relations branch at the newly Canadian-owned Trans Mountain Corp. confirmed the incentives were intended to keep the top executives at Kinder Morgan Canada Inc. with the newly acquired Canadian company.

“Yes, the incentives were to ensure key executives with the company were retained with Trans Mountain,” the media office said in an email response to questions from iPolitics.

“The arrangements were disclosed in filings, reviewed and approved by the Kinder Morgan Canada Limited Board of Directors, and are consistent with industry practice for a project and transaction of this size,” the office said.

“The incentives will be payable in equal parts on July 2019 and July 2020, provided that the applicable officer remains employed by Trans Mountain through such date.”

The 107-page Purchase Agreement that Morneau and Kinder Morgan executives signed on May 29 contains dozens of guarantees and conditions that governed both sides of the transaction – but no mention specifically of executive retention bonuses.

One of the clauses states the “Purchaser has advised Vendor” that an inducement to go through with the acquisition would be maintaining a “skilled and knowledgeable workforce” and that it would be “detrimental” if the Vendor were to solicit employees to leave their positions with the newly bought Trans Mountain once it was purchased.

The agreement states the vendor “covenants and agrees” it will not “induce or attempt to induce” a Trans Mountain employee or offer its former employees jobs with their former company for a period of one year.

The closing date for the acquistion was set for Aug. 31, coincidentally one day after the Federal Court of Appeal released a decision quashing the cabinet order that had approved the Trans Mountain pipeline expansion, which also was the same day Kinder Morgan Canada Inc. shareholders voted overwhelmingly in favour of the sale.

The deal went through.