Limitations may prevent huge bonuses like those paid to top brass in 2022, when Algoma merged with Legato Merger Corp.

The Canadian government has placed restrictions on salaries, bonuses and other compensation for top executives at Algoma Steel.

Documentation filed this month with regulatory agencies shows unspecified limitations on executive compensation were included in the fine print of $500 million in federal and provincial tariff liquidity support loans made last year to the Sault Ste. Marie steelmaker.

While few details are known about the restrictions, they may discourage large payouts like those paid in Algoma’s 2022 fiscal year, when the company merged with Legato Merger Corp.

Former CEO Mike McQuade earned as much as $25 million that year for his role in refinancing and realigning the company.

On Nov. 17, Canada Enterprise Emergency Funding Corp. announced it had completed the first transaction under its Large Enterprise Tariff Loan (LETL) facility with Algoma Steel Inc.

The LETL program was designed to protect Canadian jobs, business operations and investment activities in the face of actual and potential tariffs and countermeasures.

The Algoma deal provided $400 million in federal financing as part of a $500-million package supporting the company amid current tensions in the global steel trade. The remaining $100 million was provided by the government of Ontario.

“For a specified period, the company is subject to limitations on executive compensation for named executive officers,” Algoma’s management said in a discussion and analysis document issued Wednesday.

Specifics on the restrictions were not disclosed, but François-Philippe Champagne, the federal finance minister, provided some additional information in a sessional paper tabled recently in the House of Commons:

“While Algoma has an outstanding balance on the Large Enterprise Tariff Loan facility loan, executives of Algoma are subject to restrictions on executive compensation,” the minister wrote.

“While the details of the agreement are commercially confidential, the restrictions include restrictions on total compensation for those executives, inclusive of base salary, any cash bonuses, share- or option-based compensation, and other forms of compensation.”

“Please note that in processing parliamentary returns, the Department of Finance applies the Privacy Act and the principles set out in the Access to Information Act, and certain information has been withheld on the grounds that the information constitutes commercial information,” Champagne added.

As of Dec. 31, Algoma still had $417 million available to draw under the LETL facility.

Algoma Steel’s new chief executive officer, Rajat Marwah, took over on Jan. 1 from his retiring predecessor, Michael Garcia.

Marwah joined Algoma in 2008 as general manager of finance and cost. He became vice president of finance in 2012 and chief financial officer two years later.

If you equate “executive compensation” with garden-variety perquisites like a housing or vehicle allowance, group term insurance premiums or a personal protective equipment allowance, you are barely scratching the surface.

Compensation for Algoma’s top executives includes base salary plus a mix of short-term and long-term incentives, including options, restricted stock units and performance share equity units.

During major transitions, the payouts can be substantial. That occurred during Algoma’s 2022 fiscal year, when the company merged with Legato Merger Corp., a publicly traded special purpose acquisition company, and became publicly traded itself.

Former CEO McQuade earned as much as $25 million that year.

Rajat Marwah was paid $8.9 million.

John Naccarato, now vice president of strategy and chief legal officer, received $8.8 million.

Mark Nogalo, now vice president of strategic transformation, earned $7.6 million.

In 2024, Garcia received a CEO base salary of US$750,000, which converts to about C$1.04 million. With other compensation added, he was paid a total of C$5.6 million for the 2024 fiscal year, up from $3 million the previous year.

Here are the comparable fiscal 2024 payments, in Canadian dollars, to other top executives, with 2023 compensation shown in brackets:


Rajat Marwah, then chief financial officer – $1.6 million ($919,785)



John Naccarato, vice president of strategy and chief legal officer – $1.6 million ($892,932)



Michael Panzeri, senior vice president production – $1.5 million (nil last year)



Mark Nogalo, vice president of strategic transformation – $1.2 million ($722,282)


The new limitations will apply only to Algoma Steel’s five highest-paid executives.