Dollarama Inc., DOL-T one of the Canadian companies that benefited from increased sales from COVID-19, has doubled its CEO’s pay from prepandemic levels.
The company said chief executive officer Neil Rossy made $7.83-million in 2021, up from $6.83-million in 2020 and $3.80-million in 2019.
Keys to the increase include higher cash bonuses – Mr. Rossy’s annual incentive pay rose to $1.95-million in 2021 from $1.85-million in 2020 and $1.02-million in 2019.
The pay package also includes an increasing amount of stock awards. Mr. Rossy received $4.59-million in share and option awards in 2021. In 2020, he received a stock-option grant valued at $3.73-million, versus options valued at $1.63-million in 2019.
Mr. Rossy, the 52-year-old son of the company’s founder, owns or controls through a family foundation 10,061,085 shares in the company. Worth $453-million in January, 2020, they’ve increased in value to $687-million at Friday’s close of $68.30. (The Rossy Foundation sold 1.1 million Dollarama shares on April 4 at $70.20 apiece, grossing $77.22-million, insider-sales records show.)
In e-mailed comments, Dollarama spokesperson Lyla Radmanovich said the board’s objective when setting compensation “is to retain its high-performing executive officers, to motivate and reward them for their performance, including in line with the peers it competes for talent with, while aligning [executives’] interests with those of shareholders. Its compensation approach is based on a pay-for-performance philosophy and the creation of long-term shareholder value.”
She also said total annual compensation of the executive officers named in the company’s circular increased by 11.2 per cent over the five years ended Jan. 30. Over the same period, she said, the total shareholder return of a $100 investment in Dollarama grew by 97.7 per cent. “As such, the corporation believes that there is no disconnect between [executives’] pay and performance at any time during those years.”
Dollarama benefited from higher sales in the pandemic, as demand grew for items such as cleaning and other household products. The company’s stores were classified as essential services and allowed to remain open during various lockdowns across the country. (Some locations in malls faced sporadic closings, and sales were affected by occasional provincial bans on the sale of non-essential goods.)
Like many retailers, Dollarama was affected by rising shipping costs and container shortages, but those supply chain snags did not hit sales, as the company prioritized shipping items that were most at risk of being out of stock.
The rising costs prompted Dollarama to begin hiking prices last year, and at the end of March the retailer announced it would start selling some products for $5, up from the previous maximum of $4.
Even with increasing costs, though, Dollarama’s profit continued to rise as expenses related to COVID-19 – such as worker bonuses – have come down. And high inflation typically causes shoppers to become more price-sensitive, a trend that benefits discount stores such as Dollarama.
Dollarama reported net income of $564-million on sales of $3.79-billion in the year ended Feb. 2; those numbers rose to $663-million on $4.33-billion in sales in the year ended Jan. 30, according to S&P Global Market Intelligence.
The company has also faced some criticism about the extent of its safety measures for workers.
Ahead of its last annual general meeting in June, 2021, the British Columbia Government and Service Employees’ Union and Montreal’s Immigrant Workers Centre held a news conference that included testimony from a former temp agency employee who said its distribution centre did not always make safety equipment such as masks available.
Mr. Rossy said at the meeting that Dollarama complies with employment law requiring health and safety standards for both its own staff and those hired through third-party agencies.
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