Loblaw paid new CEO Per Bank $22-million in 2023

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Loblaw Cos. Ltd. L-T paid its new chief executive Per Bank $22.1-million last year, including a one-time $18-million award to replace compensation that he forfeited by resigning from his former employer.

Mr. Bank took on the top job at Canada’s largest grocer on Nov. 1 – replacing Galen Weston, who remains chairman of the board and Loblaw’s controlling shareholder. His package includes a $1.315-million annual salary, a target annual bonus of nearly $2-million, and a target of $7.2-million in annual long-term incentives for the current year.

Since Mr. Bank assumed his position just two months before the end of the year, he received $438,333 in salary, $910,660 in cash bonus and a prorated grant of stock awards valued at $2.41-million – a total of about $3.75-million for his first 60 days on the job. In addition, Loblaw paid $150,000 of his rent and tax equalization payments and other benefits valued at $176,771.

The sign-on package included $13-million in cash and Loblaw restricted stock valued at $5-million, which vest over three years.

Mr. Bank was previously CEO of Denmark-based retailer Salling Group – also the largest grocer in its home market. Before his hiring was announced last spring, Loblaw asked consulting company Meridian Compensation Partners to review his proposed compensation. The company found that Mr. Bank’s proposed pay was below the median rate for the market and deemed the proposed awards to make up for his forfeited compensation were reasonable.

“In the board’s view, without this make whole compensation, Loblaw would not have been able to persuade Mr. Bank to leave his former employer,” the company explained in its proxy circular to shareholders.

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Loblaw previously used Meridian Partners in 2022 for a regular review of its compensation practices, a process that found then-president Mr. Weston was underpaid.

Now, as Loblaw’s non-executive chairman, Mr. Weston will receive an annual $750,000 retainer. In a new review, Meridian determined that Mr. Weston’s proposed pay as chairman was “above the median of its comparator group, but was reasonable given Mr. Weston’s unique role and strategic focus on Loblaw.”

Mr. Weston made $8.01-million directly from Loblaw in 2023, down from $8.42-million in 2022. The numbers do not include Mr. Weston’s total 2023 compensation from George Weston Ltd., Loblaw’s controlling shareholder, where he is CEO. He made $11.79-million at Weston in 2022, including his Loblaw compensation.

Mr. Bank has taken over leadership of the company as it continues to deliver financial results exceeding internal targets, but as it also faces public and political backlash over high food prices. Mr. Bank has vowed to negotiate harder with multinational suppliers to help curb price increases, and under his leadership the company has introduced a promotion called “Hit of the Month” with deep discounts on a handful of items every month.

While the rate of food inflation has slowed significantly, prices in many cases are still much higher than they were just a couple of years ago. And consumers’ frustration has been directed toward retailers, even as they have stressed that food inflation is the result of complex factors across the supply chain.

Loblaw has faced some particular criticism as well. Late last year, after a backlash about the stores cancelling 50-per-cent discounts for food nearing its expiry date, the company backtracked on that plan. Recently, some shoppers have taken to social media to call for a boycott of Loblaw-owned stores.

Loblaw, which operates discount stores such as No Frills and Maxi, has performed well as consumers have shifted their buying habits away from full-price supermarkets. The company’s net earnings available to common shareholders grew by 9.4 per cent last year, to nearly $2.1-billion or $6.52 a share, compared with $1.9-billion or $5.75 a share in 2022. Loblaw’s revenue grew by 5.4 per cent last year, to $59.5-billion.

But executive bonuses decreased in 2023, reflecting a year in which the company’s results exceeded internal targets but not by as wide a margin as in the previous year. Loblaw’s payout factor for its short-term bonus plan was 130 per cent of target in 2023, versus nearly 180 per cent of target in 2022.