The heads of the Canada Pension Plan are slated to take home millions in bonus payouts this year, even as the fund struggles and the economy slips deeper into recession.

According to the fund's annual report just released by the CPP Investment Board, David Denison, the president and CEO of the CPP, along with his top four executives, will take home a total $8.5 million in pay and bonuses for the 2009 fiscal year.

Additionally, the executives are due another $7 million in long-term awards that will be paid out over the next three fiscal years.

Denison earned a total of $2.9 million in the last fiscal year -- down 30 per cent from $4.2 million the prior year -- including a base salary of $490,000, an annual bonus of $735,000 and "long-term incentive plan" awards of $1.6 million.

He also earned $59,023 in pension contributions and $9,571 in other benefits, which the CPPIB said include life insurance, disability benefits, and health and dental plan costs.

The fund's top five paid executives -- including senior vice-presidents Mark Wiseman, Donald Raymond, Graeme Eadie, former CFO Myra Libenson and Denison -- earned a total of $8.5 million in 2009, down 31 per cent from $12.4 million in 2008.

The executives' annual bonuses and incentives are calculated not on annual returns, but on a rolling four-year average of the fund's performance.

Long-term incentive awards for the five top executives, that have not yet been paid out or vested, will total an additional $7.8 million. Those incentives will be paid out over the next three fiscal years ending in 2012.

The value of those long-term incentives is down 43.3 per cent from $12,755,461, the annual report stated.

Denison is also due an additional $1.2 million and Eadie, $530,964, to be paid out if they chose to retire.

The new figures come as the board, which invests billions of dollars not immediately needed to cover CPP benefits, reported that the CPP Fund shrank by $17.2 billion to $105.5 billion in the last fiscal year.

The fund's value dropped 18.6 per cent to end the 2009 fiscal year, the CPP investment board said in its annual report, which was released last week.

CPP Investment Board Chair Robert Astley defended the payments.

"We know what is needed to attract the best and the brightest," he said.

Political reaction

NDP Leader Jack Layton expressed outrage over the figures Thursday during question period in the House of Commons.

"The CPP Board is supposed to protect the savings of Canadians. This is money earned through hard work and they were counting on it for their retirement," Layton said.

"We have the prime minister essentially endorsing $17 million of Canadians' money going into the pockets of executives who just lost $24 billion. How can that make any sense whatsoever?"

Prime Minister Stephen Harper responded that the bonuses are determined by the CPP's board of directors, not his government.

"The board is responsible independently for remuneration for the management of the plan," Harper explained. "I noticed by the way, that the board did drop the total compensation for its executives by 31 per cent last year. But that is a board decision, not a government decision."

"This is a joint body of federal and provincial governments that is administered at arm's length and independent of politics," he added.

The CPP Fund's assets fell by $17.2 billion to $105.5 billion in the year ended March 31, because of steep stock-market losses, the board reported, amid "the worst global financial crisis since the Great Depression."

Denison acknowledged that the past year was a challenging year for the fund "and it was a challenging year for me personally, for all of us who are involved in managing the fund.

"We take the responsibility we have for managing the assets for 17 million Canadians very, very seriously."

In a conference call with reporters, Astley said the board remains confident in Denison and his team to lead the investment program, noting that the compensation the board offers its execs allow it to "compete for talent" in the private-sector world.

"We believe the compensation paid to our team this year properly reflected the value created over the past four years, as well as the obvious challenges faced by the CPP Fund - and all investors - in fiscal 2009," Astley said.

With files from CTV Ottawa Bureau Chief Robert Fife