What in the name of all that is holy were the folks at Loblaw thinking when they boosted Galen Weston’s salary?
The evidence shows they weren’t thinking about the big picture, the optics of this big raise.
If you haven’t heard, Weston, as the CEO of both Loblaw Companies Ltd. and holding company George Weston Ltd., earned $11.8 million in 2022. That’s an increase of $1.2 million due to factors such as bonuses, stock options, a consultant who determined Weston wasn’t paid enough and a board that didn’t spend more than two minutes thinking about how this would look.
This isn’t an anti-capitalist screed. I’ve seen plenty of those in the online comments section and they are worth what I paid to read them — nothing.
I’ve seen the comparisons of how many minimum wage employees Weston’s salary could hire or what kind of raises employees could get if he wasn’t at the top of the company. Of course, we can see what a difference Weston being at the helm of the company has made with not only share prices but also revenue and profits being up since he took the helm in March 2021.
Shares closed at $125.91 on Wednesday but were trading at $52.10 in November 2018 and had only climbed to the $66 mark by the time he took over. The rebound in share price, the increase in revenue and profits for the company is attributable to Weston and those results form part of his increased pay rate.
The problem for Weston, and the company he leads, is that the news of his pay increase feeds into the narrative that grocery store profits are driven by greed and price gouging. The facts may not back up those claims, but the optics will reinforce people’s perceptions and as any politician can tell you, far too often, perception is reality.
Both companies, George Weston and Loblaw, paid Meridian Compensation Partners to review executive pay and in a report to the board, determined that Weston was underpaid compared to peers elsewhere in the industry.
“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,” a tone deaf statement from the company reads.
The board of Loblaw is filled with people who have a tremendous amount of experience running successful companies but not the political smarts to see this pay raise would cause headaches for the company. Canadians who are having to stretch their food budgets and make difficult choices in the grocery aisle aren’t going to care whether Galen Weston deserves his raise of $1.2 million, they just know it stinks like rotting fish.
Inflation has been stubbornly high for over a year now with food inflation outpacing core inflation. Stats Canada reported that in February, inflation was at 5.2% but food inflation was at 10.6%. More Canadians than ever are using foodbanks to make sure their families are feds.
Given all of this, that the board of Loblaw would think it appropriate to offer Mr. Weston a raise at this point or that he was willing to accept it makes me question their wisdom.
Galen Weston and his companies just flipped the bird at struggling Canadians, he should be surprised if they return the favour as they start shopping elsewhere.
Post a Comment