Galen Weston, Chairman and President of Loblaw Companies Limited speaks to reporters after appearing as a witness at the Standing Committee on Agriculture and Agri-Food (AGRI) investigating food price inflation in Ottawa, on March 8. Weston has just received a pay bump after consultants hired by his family-controlled company determined he was underpaid.Spencer Colby/The Canadian Press
Grocery executive Galen Weston received a $1.2-million raise in 2022, bringing his total pay to $11.79-million, after consultants hired by his family-controlled company determined that he was underpaid.
Mr. Weston serves as chairman and president of grocer Loblaw Cos. Ltd. L-T and as chairman and chief executive officer of George Weston Ltd., the holding company controlled by the Weston family. George Weston is Loblaw’s largest shareholder.
The Weston family owns 78.65 million shares of George Weston, worth $14.2-billion at Tuesday’s prices. Mr. Weston also personally owned stock options in George Weston and Loblaw valued at $42-million as of March 13, the company said.
Mr. Weston’s compensation from the two companies was up from $10.6-million in 2021, according to George Weston’s management proxy circular. His 2022 pay package included $6.88-million in stock awards, up from $6.11-million in 2021. His annual bonus of $3.56-million was up from $3.18-million in 2021. Mr. Weston’s salary was just under $1.3-million.
Canada’s big grocers continue to face public anger for booking higher profits as they pass on rising costs to customers, and Loblaw is among those that have pushed back against the criticisms. Earlier this year the company took to social media in an attempt to explain that inflation is the result of global factors and cannot be blamed on retailers.
Executives at Canada’s largest grocers reiterated that message last month in appearances before a House of Commons committee looking into rising food prices. “Our profit levels are reasonable,” Mr. Weston told the committee, adding that prices have only gone up as the retailer itself pays higher costs for the products it sells.
The company says that its profit margins on food have not been increasing, although stronger sales of certain high-margin categories – such as cosmetics at its Shoppers Drug Mart business – have led to increased margins in some cases.
The boards of both George Weston and Loblaw asked Meridian Compensation Partners to update the benchmarks for Mr. Weston’s pay that Meridian had last set in 2020, according to the proxy circular. The new benchmarks include an updated list of market peers against which they compare executives’ compensation.
“The results of Meridian’s 2022 review suggested that Mr. Weston’s total direct compensation was below the market median and Weston’s and Loblaw’s compensation policy objectives,” the proxy states.
While Meridian reviewed benchmarking for other executives, the proxy names only Mr. Weston as a beneficiary of an adjustment. Loblaw reviews each executive’s compensation every two years, spokesperson Catherine Thomas wrote in an e-mail on Tuesday. “Other senior executives, outside those reported in the proxy, had a similar review and adjustments,” she wrote.
Ms. Thomas added that Loblaw paid bonuses to more than 40,000 employees in 2022 based on its “strong company performance.”
Mr. Weston returned to the top job at Loblaw in mid-2021, after the departure of former president Sarah Davis. Richard Dufresne, chief financial officer at George Weston, also returned as CFO of Loblaw at the same time.
Mr. Dufresne made $6.73-million in 2022, up from $6.64-million in 2021. Robert Sawyer, the chief operating officer of Loblaw, made $9.36-million in 2022, up from $7.52-million the prior year.
Seventy per cent of Loblaw’s annual performance bonus is based on sales and earnings goals. The company’s results resulted in maximum payouts of 200 per cent of the bonus targets.
The combination of high inflation, record grocer profits, and executive pay has stoked controversy throughout the industry.
At Metro Inc.’s annual meeting in January, the Montreal-based investor group MÉDAC (Le Mouvement d’éducation et de défense des actionnaires, or shareholder education and defence movement) questioned the optics of bonuses for grocery executives at a time of high inflation.
Group representative Willie Gagnon referred to an opinion piece in La Presse by Sylvain Charlebois, the director of the Agri-Food Analytics Lab at Dalhousie University, which pointed out the sensitivity of awarding such bonuses while food prices have surged.
That resulted in a sharp rebuke from the chair of Metro’s board, Pierre Boivin, who said in French that it was “unfortunate that our CEO has been under attack in recent weeks.” He added that while Metro is Canada’s 38th-largest company by revenue, CEO Eric La Flèche is not among the country’s 100 best-paid CEOs, even though he is “probably the highest-performing” CEO among the company’s peer group.
Total compensation for Mr. La Flèche rose 6.8 per cent in the year ended Sept. 24, to $5.36-million. His pay package included a $1.48-million bonus, up from $1.29-million in the prior year. (Metro, which released its figures in December, said it paid out the maximum for the portion of its bonuses based on its earnings goals.)
While Loblaw and Metro continue to outperform past the peak of COVID-19, another retailer that paid big bonuses for pandemic performance reduced compensation last year, according to its pay disclosures filed Tuesday.
Canadian Tire Corp. Ltd. said compensation fell for the company’s top executives because of much-smaller annual bonuses. CEO Greg Hicks made $6.49-million, down from $6.92-million in 2021. His annual bonus fell to $983,974 from $2.64-million. An increase in the value of his stock awards helped blunt that decline.
In 2021, Canadian Tire blew the doors off its goals, and executive bonuses maxed out. But in 2022, the company fell short of sales and earnings goals in its bonus plan, cutting the payments.
Canadian Tire set a goal of comparable-store sales growth of 5.13 per cent, but finished the year at 2.68 per cent. Its earnings goal was $1.17-billion, a modest gain over 2021′s $1.06-billion, but the final number came in at $1.09-billion. That combination of misses meant the bonus pool came in at just 52.6 per cent of the target, versus 200 per cent in 2021.
During the pandemic, Canadian Tire saw surging demand for everything from cleaning supplies to home-improvement products and recreational items such as bikes and trampolines. More recently, as inflation has affected shoppers’ buying behaviour, Canadian Tire has seen weaker demand for discretionary purchases but continued strength in essential categories such as automotive services and pet food.
“The needs of Canadians changed multiple times, on a full 180, over the course of the last three years,” Mr. Hicks said last week during remarks at CIBC’s annual Retail and Consumer Conference.