CANADA
Singh proposes corporate tax hike tied to CEO-worker pay gapCBC
Tue, April 18, 2023
New Democratic Party Leader Jagmeet Singh has proposed a corporate income tax hike tied to pay gaps between workers and CEOs. (Adrian Wyld/The Canadian Press - image credit)
NDP Leader Jagmeet Singh pitched a plan Tuesday to increase corporate taxes based on the size of the gap between worker and CEO pay — but the legislation may run afoul of House of Commons rules on who can bring forward tax measures.
Singh said he was inspired by legislation United States Senators Elizabeth Warren and Bernie Sanders put forward in Congress two years ago.
"Right now, when we're experiencing unprecedented inflation, we're seeing people that are feeling squeezed. They can't afford their groceries, they can't afford their bills," Singh told a news conference Tuesday.
"At the very same time, the CEOs of the companies they work for are making more salary, making more compensation than they've ever made before."
The plan would raise the corporate income tax on a sliding scale, depending on the ratio between the pay of a company's CEO and the median pay of the company's workers. According to an NDP news release, the tax increase would be 0.5 per cent if a CEO makes 50 to 100 times the median income of workers, and would rise to a five per cent increase if a CEO makes a salary 500 times or more higher than the median income of workers.
House of Commons rules forbid private members' bills from making changes to taxation, with an exception for bills that create exemptions from new taxes or new tax increases.
"A private member's bill cannot impose, increase or extend the application of a tax," says the House of Commons guide on practice and procedure.
Singh did not say how he would get around the rule, adding he hasn't drafted the bill yet.
Singh has attacked grocery companies and executives repeatedly, saying that greed is responsible for a rise in food prices. Grocery chain representatives, including top executives, have told a House of Commons committee that higher supplier costs and other factors are responsible for the rising price of food, and that other products, such as pharmaceuticals and hygiene products, have a higher profit margin.
Loblaw president Galen Weston Jr. has been the most frequent target of Singh's criticism; the two traded barbs at a House of Commons committee meeting last month. Loblaw announced Tuesday that Weston will step down as president — a move that comes just weeks after news broke that he'd received a $3 million raise in 2022.
Spencer Colby/The Canadian Press
Statistics Canada reported Tuesday that food prices are up 9.7 per cent compared to last year. The overall inflation rate was 4.3 per cent.
Singh called on other parties to support his proposal.
"This is to decrease inequality. This is to force companies to stop the inequality that continues to grow," he said.
"This is a concrete way, a measure, that's going to lift up workers and tell companies a clear message that the inequality that exists in those companies is wrong, and that we're going to incentivize having less inequality."
The NDP's plan would increase the corporate income tax according to this scale:
0.5 per cent if CEO-to-median-worker pay ratio is between 50 and 100
1 per cent if CEO-to-median-worker pay ratio is between 100 and 200
2 per cent if CEO-to-median-worker pay ratio is between 200 and 300
3 per cent if CEO-to-median-worker pay ratio is between 300 and 400
4 per cent if CEO-to-median-worker pay ratio is between 400 and 500
5 per cent if CEO-to-median-worker pay ratio is 500 or more
Weston to step back from Loblaw's day-to-day operations as company announces new CEO
The Canadian Press
Tue, April 18, 2023
Galen Weston is stepping back from day-to-day operations of Loblaw Companies Ltd. in a senior leadership shuffle that will see a European retail executive take over as president and CEO.
Canada's largest grocer and drugstore chain said Tuesday the chief executive of Denmark’s leading grocery retailer Salling Group A/S, Per Bank, will join the company in early 2024.
The hiring will see Weston step aside from the president role, which he took on in 2021 when Sarah Davis retired from the job. He will remain chairman of Loblaw and chairman and CEO of holding company George Weston Ltd.
"I'm not leaving. I'm stepping back into what I consider to be my natural role as the controlling shareholder," Weston said during a call with analysts.
"The takeaway here is this is not a sharp left turn," he said. "This is about evolution and building on the platform that's been established."
Weston took on the role of president just as Canada entered a sustained period of high inflation. Food costs have risen at the fastest rate in decades.
Higher grocery prices have largely been attributed to supply chain disruptions, extreme weather, soaring input costs and Russia's invasion of Ukraine. But some Canadians have questioned whether competition factors or so-called greedflation by grocers have also played a role.
It’s an accusation most often levelled at Loblaw, as the country’s biggest operator, and more specifically at Weston.
Industry experts have noted that while the claims may be unfounded, having the wealthy scion of a powerful family empire as the face of the grocer — as some Canadians struggle to buy food — is part of the perception problem.
Meanwhile, Bank worked his way up through the retail sector ranks over the last three decades.
He started in supply chain operations and eventually became CEO of Scandinavian retail chain Coop Norden.
In 2012, Bank became the fourth CEO of the more than century-old Salling Group, which operates department stores, supermarkets and discount stores.
Under his tenure, the company has grown its market share by more than 20 per cent, Loblaw said.
"We needed somebody who had deep retail knowledge, retail pedigree and retail excellence," Weston said. "That's what we built the success of Loblaw's performance over the last few years on, and (Bank) rang the bell in every way on that."
The global search for a new president and CEO was launched last August, which resulted in a shortlist of five candidates, he said.
"We took our time with this process ... and (Bank) was the clear standout," Weston said, noting that the parallels between Loblaw and Salling Group are "quite remarkable."
"He has extensive experience working for a controlling family, and understands what that relationship needs to be in order for a partnership to be successful," he said.
"He has been leading an organization that has an outsized cultural and financial place inside his country and that's the case for Loblaw," Weston said. "We're a big company in a small country."
RBC Dominion Securities Inc. analyst Irene Nattel said Bank is "a strong operator with a deep background in multi-channel food retail across geographies."
"Bank will be taking the helm of a Loblaw enjoying strong momentum and results, well-positioned against the backdrop of high prices and value-seeking, cash-squeezed consumers," she said.
Meanwhile, Loblaw chief operating officer Robert Sawyer — who came out of retirement to take on the role in 2021 — plans to retire at the end of the year.
Sawyer worked for grocer Metro Inc. for more than 30 years, including in the role of executive vice-president and chief operating officer, before becoming president and chief executive of Quebec-based home improvement retailer Rona in 2013.
"With Robert's deserved retirement approaching, his shoes were always going to be hard to fill," Loblaw chief financial officer Richard Dufresne told analysts.
"However, having spent some time with (Bank), it's clear that he is a seasoned grocery retailer with a broad and deep skill set, much like a slightly younger version of Robert."
Weston added: "If you could find a Robert Sawyer who was 55, that would be an ideal combination for us and here with (Bank) we think we found that."
This report by The Canadian Press was first published April 18, 2023.
Companies in this story: (TSX:L, TSX:WN)
Brett Bundale, The Canadian Press
The Canadian Press
Tue, April 18, 2023
Galen Weston is stepping back from day-to-day operations of Loblaw Companies Ltd. in a senior leadership shuffle that will see a European retail executive take over as president and CEO.
Canada's largest grocer and drugstore chain said Tuesday the chief executive of Denmark’s leading grocery retailer Salling Group A/S, Per Bank, will join the company in early 2024.
The hiring will see Weston step aside from the president role, which he took on in 2021 when Sarah Davis retired from the job. He will remain chairman of Loblaw and chairman and CEO of holding company George Weston Ltd.
"I'm not leaving. I'm stepping back into what I consider to be my natural role as the controlling shareholder," Weston said during a call with analysts.
"The takeaway here is this is not a sharp left turn," he said. "This is about evolution and building on the platform that's been established."
Weston took on the role of president just as Canada entered a sustained period of high inflation. Food costs have risen at the fastest rate in decades.
Higher grocery prices have largely been attributed to supply chain disruptions, extreme weather, soaring input costs and Russia's invasion of Ukraine. But some Canadians have questioned whether competition factors or so-called greedflation by grocers have also played a role.
It’s an accusation most often levelled at Loblaw, as the country’s biggest operator, and more specifically at Weston.
Industry experts have noted that while the claims may be unfounded, having the wealthy scion of a powerful family empire as the face of the grocer — as some Canadians struggle to buy food — is part of the perception problem.
Meanwhile, Bank worked his way up through the retail sector ranks over the last three decades.
He started in supply chain operations and eventually became CEO of Scandinavian retail chain Coop Norden.
In 2012, Bank became the fourth CEO of the more than century-old Salling Group, which operates department stores, supermarkets and discount stores.
Under his tenure, the company has grown its market share by more than 20 per cent, Loblaw said.
"We needed somebody who had deep retail knowledge, retail pedigree and retail excellence," Weston said. "That's what we built the success of Loblaw's performance over the last few years on, and (Bank) rang the bell in every way on that."
The global search for a new president and CEO was launched last August, which resulted in a shortlist of five candidates, he said.
"We took our time with this process ... and (Bank) was the clear standout," Weston said, noting that the parallels between Loblaw and Salling Group are "quite remarkable."
"He has extensive experience working for a controlling family, and understands what that relationship needs to be in order for a partnership to be successful," he said.
"He has been leading an organization that has an outsized cultural and financial place inside his country and that's the case for Loblaw," Weston said. "We're a big company in a small country."
RBC Dominion Securities Inc. analyst Irene Nattel said Bank is "a strong operator with a deep background in multi-channel food retail across geographies."
"Bank will be taking the helm of a Loblaw enjoying strong momentum and results, well-positioned against the backdrop of high prices and value-seeking, cash-squeezed consumers," she said.
Meanwhile, Loblaw chief operating officer Robert Sawyer — who came out of retirement to take on the role in 2021 — plans to retire at the end of the year.
Sawyer worked for grocer Metro Inc. for more than 30 years, including in the role of executive vice-president and chief operating officer, before becoming president and chief executive of Quebec-based home improvement retailer Rona in 2013.
"With Robert's deserved retirement approaching, his shoes were always going to be hard to fill," Loblaw chief financial officer Richard Dufresne told analysts.
"However, having spent some time with (Bank), it's clear that he is a seasoned grocery retailer with a broad and deep skill set, much like a slightly younger version of Robert."
Weston added: "If you could find a Robert Sawyer who was 55, that would be an ideal combination for us and here with (Bank) we think we found that."
This report by The Canadian Press was first published April 18, 2023.
Companies in this story: (TSX:L, TSX:WN)
Brett Bundale, The Canadian Press
The news of the Loblaw CEO's exit from his role isn't impressing shoppers who feel betrayed by soaring costs
Loblaw CEO earned an additional $1.2M as grocery prices rise
Abhya Adlakha
·Editor, Yahoo News Canada
Tue, April 18, 2023
Many Canadians have taken to social media to celebrate, lament after Loblaw announced that their current CEO Galen Weston will be replaced by a Danish retail executive Per Bank starting next year.
In a press release on Tuesday morning, the company announced that Bank will join the company by 2024 followed by a "global talent search initiated" by the company in August 2022.
"It comes after two years of superb performance at the company as it executed against a strategy anchored in retail excellence," Loblaw said.
This news comes after it was revealed that Weston received a 55 per cent raise in 2022 after consultants thought he was "underpaid".
Weston will remain chairman of Loblaw and chairman and CEO of holding company George Weston Ltd.
"I'm not leaving. I'm stepping back into what I consider to be my natural role as the controlling shareholder," Weston said during a call with analysts.
"The takeaway here is this is not a sharp left turn," he said. "This is about evolution and building on the platform that's been established."
In 2012, Bank became the fourth CEO of the more than century-old Salling Group, which operates department stores, supermarkets and discount stores. Under his tenure, the company has grown its market share by more than 20 per cent, Loblaw said.
RELATED from Yahoo Finance Canada: Here's how much grocery prices went up in March 2023
Not long after the news, many Canadians took to social media to express their feelings about the controversial executive leaving the company—while some were overjoyed, others feel that this is a PR move by the company after months of outrage over rising grocery prices, and there will be no substantial changes in the future.
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