July 2, 2022

A person sporting a masks walks out of a Canadian Tire retailer in Toronto.Frank Gunn/The Canadian Press

A banner yr in pandemic retailing meant hundreds of thousands of {dollars} in bonus pay for executives at two main firms – and at the least a whole lot of hundreds of thousands extra for the households who management them.

At Canadian Tire Corp. Ltd. CTC-T, prime executives noticed bonuses rise by 80 per cent or extra in 2021, with the corporate paying CEO Greg Hicks a bonus of $2.64-million, almost triple that of the yr earlier than.

Grocery chain Loblaw Cos. Ltd. L-T paid every of its 5 best-paid executives bonuses of greater than $1-million, with president Galen Weston and chief working officer Robert Sawyer topping $2-million. The businesses paid out most or near-maximum bonuses primarily based on gross sales and earnings outcomes for the yr.

However it’s the households who management the 2 firms who noticed way more dramatic will increase of their wealth.

Mr. Weston’s household owns greater than half of George Weston Ltd., which owns greater than half of Loblaw. Their stake grew in worth from $5.9 billion originally of 2021 to $9.7 billion by yr finish. The corporate’s share worth climbed by almost 70 per cent. Additional features in 2022 have pushed the worth of the Westons’ stake to greater than $10.8 billion as of this week.

Martha Billes and her son Owen Billes, who management Canadian Tire, noticed the worth of their stake rise from $550-million originally of 2021 to greater than $850-million by yr finish, largely on the energy of features within the worth of their thinly traded voting shares. The worth of their inventory has topped $925-million at current costs.

Govt pay at retailers has grow to be a hot-button subject throughout COVID-19. Many companies that employed important, front-line staff who can’t do their jobs safely at residence gave “pandemic pay” – elevated wages or bonuses – throughout the earliest months of the public-health disaster, however for essentially the most half, they scaled again or eradicated the pay later in 2020.

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Canadian grocers supplied some one-time bonuses or non permanent pay boosts in 2021, however Canada’s largest private-sector union, Unifor, was unsuccessful in getting firms to carry again common pay premiums.

Canadian Tire benefited from shifts in shopper habits throughout the pandemic, as folks spruced up their houses, backyards and gardens and demand shot up for merchandise corresponding to bicycles, trampolines and treadmills. On the identical time, it lower prices via an operational effectivity plan it launched in November of 2019.

Canadian Tire paid Mr. Hicks $6.92-million in his first full yr as CEO in 2021, together with a $1.1-million wage and share and stock-option awards valued at $2.97-million and the $2.64-million bonus. He made $4.49-million in 2020, a yr during which he moved from president of its retail division to the highest job on March 12.

The important thing to the bonus payouts for Mr. Hicks and his fellow executives was Canadian Tire’s resolution to set modest monetary targets for 2021 after huge pandemic-related gross sales in 2020.

For pay functions in 2021, Canadian Tire set an earnings goal that was 11.7 per cent under the earnings of the prior yr. The objective that will pay most 2021 bonuses was additionally under the 2020 revenue quantity.

The comparable-sales-growth objective of 0.86 per cent was greater than eight full share factors under the 2020 variety of 9.5 per cent. And the executives would get at the least a few of their bonuses even when comparable gross sales fell.

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When the corporate tallied precise outcomes for 2021, it far surpassed the utmost thresholds within the plan, ensuing within the most doable annual money bonuses for the chief crew.

Requested concerning the goal-setting, Canadian Tire spokeswoman Joscelyn Dosanjh stated in an e-mail that the 2021 targets have been set at a time of widespread retailer closings and capability restrictions in response to a rising wave of COVID-19 circumstances.

“At the moment, vaccines weren’t but broadly obtainable and there was no clear view as to once we would emerge from the pandemic, and the way customers would behave as soon as we did,” she stated.

She stated the corporate’s “distinctive outcomes” benefited not simply shareholders however all the corporate’s stakeholders, together with non-management workers who obtained efficiency bonuses.

Loblaw lagged rivals in 2020 in income and same-store gross sales development and started making vital adjustments in 2021. After Mr. Weston returned as president final spring, the brand new govt crew launched a strategic overview of the enterprise.

Mr. Weston vowed to return to “retail fundamentals,” closing or changing the codecs of underperforming shops, bettering the effectivity of its e-commerce operations, and slicing initiatives corresponding to meal kits that weren’t contributing to the enterprise.

Loblaw paid Mr. Weston, who holds the titles of chairman and president, $5.41-million in 2021. That was up from $3.55-million in 2020, when he served as govt chairman, and Sarah Davis was the corporate’s president. Ms. Davis left the corporate in Could, 2021.

Mr. Weston’s pay bundle included a $730,546 wage, a $2.17-million bonus, and share and stock-option awards valued at $2.47-million.

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Mr. Sawyer, a retired govt at Metro Inc. and Rona Inc. who was sitting on the George Weston Ltd. board when he grew to become Loblaw chief working officer in Could, 2021, made $7.43-million in his first yr on the firm, together with share and stock-option awards valued at $4-million.

Every of Loblaw’s 5 best-paid executives obtained bonuses of greater than $1-million after the corporate paid almost the utmost doable within the plan for its company efficiency. The vast majority of the plan is predicated on targets for gross sales and income.

Loblaw set a gross sales goal that represented a acquire of about 1.7 per cent over 2020. It recorded gross sales of $53.17-billion, a acquire of about 4.6 per cent over 2020. Its earnings objective was 5.1 per cent above 2020. It recorded earnings of $4.02-billion, about 16 per cent larger than 2020.

These two outcomes drove the Loblaw bonus method to pay out almost 200 per cent of goal bonuses.

Editor’s be aware: An earlier model of this story overstated the worth of Loblaw Cos. Ltd. inventory owned by the Weston household as a result of it attributed to them the entire 175 million shares held by the general public George Weston Ltd., of which the household owns simply 53.5 per cent. The right numbers are that their stake grew in worth from $5.9 billion originally of 2021 to $9.7 billion by yr finish as the corporate’s share worth climbed by almost 70 per cent. Additional features in 2022 have pushed the worth of the Westons’ stake to greater than $10.8 billion as of this week.

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