Weston windfall sure to raise shoppers’ ire

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This article was published 08/04/2023 (1077 days ago), so information in it may no longer be current.

For many years now, through television advertising, Canadians have come to know Galen Weston — scion of the family that owns Canada’s largest grocery store conglomerate — as a kindly, bespectacled friend, offering advice about what to serve guests during the holiday season and waxing poetic about family ideals.

After this past week, it’s unclear whether Mr. Weston will continue to be the best spokesmodel for his ubiquitous company.

On April 4, the Globe and Mail was the first news organization to report that Mr. Weston — chairman and president of the Loblaw Cos. Ltd., and chairman and CEO of George Weston Company — was getting a $1.2 million raise that brought his total remuneration (including salary, stock options and bonuses) to $11.79 million.

The news of his enormous windfall could not have come at a worse time. Just a few wee.ks ago, Mr. Weston was among a group of Canada’s grocery magnates called to testify before a House of Commons committee looking into food inflation. At those hearings, Mr. Weston steadfastly maintained the record profits his company was earning were “reasonable” given other factors.

Despite his assurances that grocery store margins remain incredibly small, and that the forces driving inflation originated long before products reached his stores, Mr. Weston’s comments triggered coast-to-coast-to-coast eye-rolling.

Details of Mr. Weston’s new pay package do little to assuage concerns that he and other grocers are bleeding consumers dry.

It also doesn’t help that Mr. Weston’s company has attributed the decision to peel off another million dollars for their CEO to an executive-compensation consultant, retained to ensure he was being paid at market values. It was this consultant who ultimately determined Mr. Weston was, by market standards, underpaid.

Partly in defence of this news, the G. Weston Company has highlighted annual bonuses paid to 40,000 of its employees, signing bonuses for new hires and slowly increasing hourly wages for some job classifications. Unfortunately for the Weston family, it would be hard to argue these steps, in and of themselves, have helped Mr. Weston’s employees absorb the rising prices seen at the stores in which they work.

The larger problem is the way inflation is driving exorbitant profits for some companies and lavish bonuses for the executives that run those companies. Anger about the perverse levels of compensation offered to top executives has sparked investor revolts; last year, shareholders at Intel, JPMorgan Chase and Philips all rejected executive compensation packages. More shareholder pressure is sure to come this spring.

Given the nature and structure of his companies, Mr. Weston does not face the prospect of a shareholder revolt. That does not mean he should avoid the opportunity to reconsider his million-dollar raise.

Regardless of his assertions, Mr. Weston’s windfall is coming out of the wallets of Canadians who are struggling mightily with basic costs of living. And out of the treasuries of the federal and provincial governments, which are pumping billions of dollars to needy Canadians through affordability programs.

Will a failure to do his part to help Canadians stock their cupboards without breaking the bank have any negative impact on Mr. Weston and his companies? Unlikely. The grocery industry is still dominated by a handful of conglomerates, giving Canadians precious few viable alternatives for the acquisition of their daily bread.

However, that is not to say there won’t be any impact. Although the company has not confirmed it, it has become increasingly unlikely we’ll see Mr. Weston grinning at us from someone’s kitchen, flogging some form of frozen appetizers, and praising the importance of family. He’s just not the right guy for that job.