PRESS RELEASE: MARCH 21, 2006

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Loblaw executives forgo 2005 bonuses

Bloomberg News
TORONTO -- Loblaw Cos. Ltd. chairman Galen Weston and president John Lederer declined to accept bonuses for 2005 after the Canadian supermarket chain's profit fell for the first time in 13 years.
Mr. Weston, 65, and Mr. Lederer, 50, "chose to forgo their respective bonuses," which were $500,000 and $997,900 in 2004, Toronto-based Loblaw said in a regulatory filing. They declined "because of the performance of the company," spokesman Geoffrey Wilson said yesterday. He did not elaborate.
Profit fell 23 per cent in 2005 as Loblaw had problems integrating new warehouses into its supply network, leaving some stores without merchandise. Mr. Lederer revamped the network to cut annual costs so the grocer can reduce prices before Wal-Mart Stores Inc. opens stores in Canada that sell fresh food.
Loblaw shares fell 22 per cent in 2005 as the company posted profit declines in three out of four quarters. The stock slipped 68 cents to $56.27 at the close of trading yesterday on the Toronto Stock Exchange.
Mr. Weston and Mr. Lederer's salaries, at $800,000 and $1.35-million, were unchanged from a year earlier. Both were entitled to "some level" of bonus this year under the company's compensation policies, Mr. Wilson said.
Loblaw's bonuses are based on "economic value added," which measures financial results and whether investment decisions have increased the stock price over the "longer term," according to the filing. Mr. Lederer's bonus usually is calculated on 75 per cent of his salary, and he can earn an additional $250,000 by achieving specific targets, the company said.

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