Grocery
JAN 3, 2022
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The practice of paying executive bonuses has been more researched in the pandemic, especially among companies that employ significant front-line employees who are unable to perform their jobs safely at home.
Nathan Denette / The Canadian Press
Two of Canada’s largest merchants – Empire Company Ltd. and Metro Inc. – paid their executives almost maximum bonuses for their most recent, pandemic-boosted fiscal year.
They joined Loblaw Companies Ltd. to reward their top executives for robust sales over the past 18 months, where many Canadians have replaced restaurant expenses with home cooking and warehousing of essential household items – a winner for grocers.
The practice of paying executive bonuses has been more researched in the pandemic, especially among companies that employ significant front-line employees who are unable to perform their jobs safely at home.
Merchants gave all workers some form of “pandemic wage” – increased wages or bonuses – in the earlier months of the public health crisis, but they lowered or eliminated wages later in 2020. Grocery retailers offered additional one-time bonuses earlier this year (and in Empire cases reintroduced bonuses in regions, where orders for stay at home were imposed). Other benefits, merchants said, included being paid free of vaccinations, discounts and gift card bonuses. But in the spring, Canada’s largest private-sector union, Unifor, called on companies to bring back universal, regular wage premiums for grocery workers during the pandemic.
Together, Loblaw, Empire (the parent company of Sobeys) and Metro have a combined market value of about $ 60 billion. They had $ 100 billion in sales over the past 12 months, with just over $ 3 billion in profits, according to S&P Global Market Intelligence. While their single-digit profit margins are modest compared to other industries, they have risen from pre-pandemic levels in the last 12 months.
Empire paid its executives almost the maximum possible bonuses for its most recent fiscal year, which ended May 1, saying it easily exceeded its sales and profit targets.
That meant a $ 2.71 million bonus for CEO Michael Medline, up from $ 1.41 million the year before. Four other top executives received payouts of $ 579,000 to $ 1.01 million. All five bonuses were almost or more than double their incentive pay from the previous fiscal year.
In the year ending May 2020, Empire’s board decided to scale down bonuses for its top executives in recognition of the pandemic – especially because blowout sales in the first three months of the crisis were not part of the annual targets. For the year ending in May, however, Empire incorporated COVID-19 into its targets, setting a sales target roughly in line with the previous year and a lower performance target.
Empire said sales of $ 28.3 billion topped its $ 26.7 billion target and reported net earnings of $ 701.5 million that were exceeded by the $ 548.1 million target. Putting those numbers into the formula gave leaders almost double their target bonuses, Empire said.
Overall, Mr. Medline $ 7.49 million in the year ending May, including nearly $ 3.1 million in stock allotments. That’s below his $ 13.04 million compensation from the previous year, a figure inflated by a special $ 6.9 million stock reward designed to keep him for another six years. In the year ending May 2019, he earned just under $ 5.5 million.
For the second year in a row, executives at Metro also received almost the maximum possible bonuses after the company exceeded its profit targets. For most, however, the payments were slightly lower than the year before.
Metro paid CEO Eric La Flèche a $ 1.29 million bonus on top of his salary of just over $ 1 million for the year ending Sept. 25. He was entitled to a maximum bonus of just over $ 1.5 million. In the year ending September 2020, his bonus was $ 1.43 million.
Four other Metro executives, who were eligible for bonuses equal to their salaries, received payouts of between $ 450,000 and $ 505,000 – 82 percent to 99 percent of maximum. Their bonuses ranged from $ 450,000 to $ 600,000 in the previous year, with only Executive Vice President Marc Giroux, head of both e-commerce and the Quebec division, receiving the maximum payout for his division’s goals.
For the year ending September 25, Metro set a target of $ 823.6 million in adjusted net earnings – roughly the same amount as it recorded in the year ending September 2020, when more than six months of pandemic purchases increased the results. Metro said that by setting the target, it started by assuming a normal environment and then added pandemic-related sales.
Its adjusted net income came in at $ 854.2 million, above the maximum bonus level for all executives except Mr La Flèche, who has a higher profit threshold for a maximum bonus.
Metro said it saw a sharp increase in food sales in the first half of the year, but will fall in the second half, “as they cycled unusually strong levels” in 2020. It said pharmacy sales were hit by an eight-week labor dispute at Jean Coutu distribution center, and expenses increased due to $ 104 million in pandemic-related costs, including $ 24 million in gift cards for front-line employees.
The executive bonuses are based on a mix of company-wide earnings, divisional performance and individual goals, with Mr La Flèche’s bonus being weighted at most to the company’s profits.
In total, he earned $ 5.02 million, including $ 2.24 million in stock and option allotments, up from $ 5.07 million the year before.
Loblaw, which blew through its 2020 revenue targets but missed its profit target, said in April that the board decided that the company’s short-term bonus plan should not pay out more than 150 percent of the target for any target, instead of the 200 percent maximum plan allowed.
Loblaw CEO Galen G. Weston earned $ 3.55 million, down from $ 3.67 million in 2019, including an annual bonus of $ 648,000, which was less than 2019’s annual incentive of $ 764,640. President Sarah Davis, who resigned from the company in May, earned $ 4.53 million, including a $ 1.35 million bonus, down from $ 1.59 million in 2019.
The Globe and Mail previously reported on Loblaw’s compensation figures, which were for the year ending January 2, 2021, in April.
With files by Susan Krashinsky Robertson
Two of Canada’s largest merchants – Empire Company Ltd. and Metro Inc. – paid their executives almost maximum bonuses for their most recent, pandemic-boosted fiscal year.
They joined Loblaw Companies Ltd. to reward their top executives for robust sales over the past 18 months, where many Canadians have replaced restaurant expenses with home cooking and warehousing of essential household items – a winner for grocers.
The practice of paying executive bonuses has been more researched in the pandemic, especially among companies that employ significant front-line employees who are unable to perform their jobs safely at home.
Merchants gave all workers some form of “pandemic wage” – increased wages or bonuses – in the earlier months of the public health crisis, but they lowered or eliminated wages later in 2020. Grocery retailers offered additional one-time bonuses earlier this year (and in Empire cases reintroduced bonuses in regions, where orders for stay at home were imposed). Other benefits, merchants said, included being paid free of vaccinations, discounts and gift card bonuses. But in the spring, Canada’s largest private-sector union, Unifor, called on companies to bring back universal, regular wage premiums for grocery workers during the pandemic.
Together, Loblaw, Empire (the parent company of Sobeys) and Metro have a combined market value of about $ 60 billion. They had $ 100 billion in sales over the past 12 months, with just over $ 3 billion in profits, according to S&P Global Market Intelligence. While their single-digit profit margins are modest compared to other industries, they have risen from pre-pandemic levels in the last 12 months.
Empire paid its executives almost the maximum possible bonuses for its most recent fiscal year, which ended May 1, saying it easily exceeded its sales and profit targets.
That meant a $ 2.71 million bonus for CEO Michael Medline, up from $ 1.41 million the year before. Four other top executives received payouts of $ 579,000 to $ 1.01 million. All five bonuses were almost or more than double their incentive pay from the previous fiscal year.
In the year ending May 2020, Empire’s board decided to scale down bonuses for its top executives in recognition of the pandemic – especially because blowout sales in the first three months of the crisis were not part of the annual targets. For the year ending in May, however, Empire incorporated COVID-19 into its targets, setting a sales target roughly in line with the previous year and a lower performance target.
Empire said sales of $ 28.3 billion topped its $ 26.7 billion target and reported net earnings of $ 701.5 million that were exceeded by the $ 548.1 million target. Putting those numbers into the formula gave leaders almost double their target bonuses, Empire said.
Overall, Mr. Medline $ 7.49 million in the year ending May, including nearly $ 3.1 million in stock allotments. That’s below his $ 13.04 million compensation from the previous year, a figure inflated by a special $ 6.9 million stock reward designed to keep him for another six years. In the year ending May 2019, he earned just under $ 5.5 million.
For the second year in a row, executives at Metro also received almost the maximum possible bonuses after the company exceeded its profit targets. For most, however, the payments were slightly lower than the year before.
Metro paid CEO Eric La Flèche a $ 1.29 million bonus on top of his salary of just over $ 1 million for the year ending Sept. 25. He was entitled to a maximum bonus of just over $ 1.5 million. In the year ending September 2020, his bonus was $ 1.43 million.
Four other Metro executives, who were eligible for bonuses equal to their salaries, received payouts of between $ 450,000 and $ 505,000 – 82 percent to 99 percent of maximum. Their bonuses ranged from $ 450,000 to $ 600,000 in the previous year, with only Executive Vice President Marc Giroux, head of both e-commerce and the Quebec division, receiving the maximum payout for his division’s goals.
For the year ending September 25, Metro set a target of $ 823.6 million in adjusted net earnings – roughly the same amount as it recorded in the year ending September 2020, when more than six months of pandemic purchases increased the results. Metro said that by setting the target, it started by assuming a normal environment and then added pandemic-related sales.
Its adjusted net income came in at $ 854.2 million, above the maximum bonus level for all executives except Mr La Flèche, who has a higher profit threshold for a maximum bonus.
Metro said it saw a sharp increase in food sales in the first half of the year, but will fall in the second half, “as they cycled unusually strong levels” in 2020. It said pharmacy sales were hit by an eight-week labor dispute at Jean Coutu distribution center, and expenses increased due to $ 104 million in pandemic-related costs, including $ 24 million in gift cards for front-line employees.
The executive bonuses are based on a mix of company-wide earnings, divisional performance and individual goals, with Mr La Flèche’s bonus being weighted at most to the company’s profits.
In total, he earned $ 5.02 million, including $ 2.24 million in stock and option allotments, up from $ 5.07 million the year before.
Loblaw, which blew through its 2020 revenue targets but missed its profit target, said in April that the board decided that the company’s short-term bonus plan should not pay out more than 150 percent of the target for any target, instead of the 200 percent maximum plan allowed.
Loblaw CEO Galen G. Weston earned $ 3.55 million, down from $ 3.67 million in 2019, including an annual bonus of $ 648,000, which was less than 2019’s annual incentive of $ 764,640. President Sarah Davis, who resigned from the company in May, earned $ 4.53 million, including a $ 1.35 million bonus, down from $ 1.59 million in 2019.
The Globe and Mail previously reported on Loblaw’s compensation figures, which were for the year ending January 2, 2021, in April.
With files by Susan Krashinsky Robertson
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