Algoma Steel’s executive pay practices are under renewed scrutiny after SooToday revealed former CEO Michael Garcia got a $6.82-million compensation package during a year in which the steelmaker lost almost $1 billion
Marty Warren, Canadian national director of the United Steelworkers, is castigating Algoma Steel for granting “outrageous” compensation packages to senior executives as they prepared to lay off more than 1,000 workers.
As SooToday first reported last weekend, Michael Garcia was paid a base salary of $1.07 million during his final year as Algoma’s chief executive officer.
But Garcia was awarded a total of $6.82 million in bonuses and other compensation for a year in which the Sault steelmaker lost almost a billion dollars.
That’s a 22 per cent increase from the $5.58 million that Garcia earned the previous year, and a “whopping” 130 per cent more than the $2.96 million he got two years earlier, Warren said in a written response to SooToday’s disclosure.
“Garcia’s 2025 compensation package amounts to more than double the lifetime earnings of the average Canadian retiring today,” he added.
Workers, their families and the entire community were devastated when news of the layoffs broke weeks before last Christmas, the Steelworkers top boss said, accusing the company of “brutally callous timing.”
“The United Steelworkers union, which represents the vast majority of Algoma Steel employees, believes it is unacceptable for top corporate executives to be awarded huge compensation increases during a period of mass layoffs and poor financial results,” Warren said.
“It is outrageous to attempt to justify a CEO’s 130 per cent compensation increase over two years, while hundreds of workers have lost their livelihoods and a community’s economic future is at stake.”
Warren cites Algoma’s executive compensation disclosures as showing Garcia could have received more than the $6.82 million he was awarded in 2025.
“The economic terms agreed with Mr. Garcia were materially lower than those to which he would have otherwise been entitled under the termination without cause provisions of his employment agreement with the company,” Algoma Steel said in a filing to securities regulators.
‘USW members and all working families in Sault Ste. Marie deserve more respect and a greater commitment to corporate accountability and responsibility from Algoma Steel, a company that accepted nearly $1 billion in public funding before cutting so many jobs and simultaneously rewarding its CEO so handsomely,” Warren said.
Next week, Algoma Steel shareholders will be given an opportunity to speak out on the bonuses and other compensation paid to senior company executives.
In a ‘say on pay’ vote to be taken at Algoma’s annual general meeting on June 23, shareholders will be asked whether they approve of the company’s compensation approach.
In a similar vote last year, 96 per cent of shareholders expressed support for Algoma’s executive compensation.
But an online poll of SooToday readers taken this week found the tables are turning, with 94 per cent of 976 readers now expressing disapproval.
The vote to be taken at Algoma’s annual general meeting on Tuesday will be conducted on an advisory basis that’s not binding on the company’s board of directors.
“We understand the importance of providing our shareholders with an opportunity to express their support for our compensation design and decisions,” the company says.
In March of this year, the company revealed that the Canadian government had placed restrictions on salaries, bonuses and other compensation paid to its top five executives.
Documentation filed with regulatory agencies showed 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 steelmaker.
So long as there is an outstanding balance on a $400-million Large Enterprise Tariff Loan (LETL) facility, the top five executives of Algoma are subject to unspecified restrictions on executive compensation.
As of March 31, 2026, there was unused availability of $292.5 million available to draw under its LETL facility.
Details of the restrictions haven’t been released because they limits are considered commercially confidential, but they’re known to include caps on total compensation for key executives inclusive of base salary, any cash bonuses, share- or option-based compensation and other forms of compensation.