Metro bosses' annual bonuses rise amid inflationary backdrop

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The annual bonuses of Metro bosses increase in an inflationary context

Compared to last year, Metro CEO Eric La Flèche saw his annual compensation increase by almost 7%. His annual bonus jumped 15%.

Annual bonuses for Metro's top five executives rose 13.7% as soaring food inflation boosted the grocery chain's sales.

In total, the five executives of this Montreal company shared total compensation of $13.2 million in fiscal 2022 (ended September 24), according to published regulatory documents by the company. This is a 4% increase over the same period last year.

The increase in their annual bonuses, a component of compensation linked to company performance, has, however, been more generous at a time when Metro sales are benefiting from food inflation.

The five executives shared $3.7 million in annual bonuses, an increase of 13.7% over last year.

For his part, President and CEO Eric La Flèche received total compensation of $5.4 million, which represents an increase of 6.8%. His annual bonus jumped 15% to 1.5 million.

In the circular sent to shareholders, Metro explains that the company's board of directors has set high sales targets to determine the amount of bonuses. The company says these targets were exceeded in the second half of the year as significant food inflation boosted sales and accelerated a consumer shift to discount stores, which been positive for our discount banners.

In 2022, revenues for the company, which includes the Metro, Jean Coutu and Super C banners, stood at 18, $9 billion, an increase of 3.3%. Net profit, for its part, increased by 2.9%, to 849.5 million.

In September, when Metro ended its fiscal year, food inflation stood at 10.3% in Canada, according to Statistics Canada data.

Households have probably not reached the end of their groceries, according to forecasts by the Desjardins Group team of economists. Inflation in the food segment will reach 5.6% in 2023 on average. From 10.3% last November, the pace is expected to moderate to 3.2% in December 2023.

At a time when major Canadian grocers are being singled out for soaring food prices, Metro denies profiting from them, while its margins have remained relatively stable.

Despite an 8.3% increase in revenue to $4.4 billion in the fourth quarter of its fiscal 2022 (ended September 24), gross margin remained flat. It reached 20.4%, the same threshold as last year. For comparison, the gross margin was 20.2% in 2019, before the pandemic.

When unveiling the most recent quarterly results last November, management mentioned that& #x27;it had to deal with inflationary pressures, particularly in terms of transportation and labour.

Major Canadian grocers are doing the subject of a Competition Bureau study announced at the end of October. This move comes in a context where food inflation is intensifying despite a moderation in general inflation.

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