MONTREAL -- Independent member-merchants of Metro, based here, are suing the grocer and want a judge to force Chief Executive Pierre Lessard to return part of his compensation of almost $32.5 million (Cdn.$50 million) over four years. The company denies any wrongdoing.
About 100 owner-shareholders allege in their suit that Lessard and other company executives skirted Metro's constitution and bylaws by illegally trying to force them out of the company through changes to the share structure.
The suit, filed in Quebec Superior Court here, also wants Lessard to be forced to step down for allegedly failing in his fiduciary responsibilities to shareholders. The merchants also allege the $17.5 million in cash Lessard received in 2002 by exercising 2.2 million outstanding stock options as well as $4.5 million in pay in the past three years are "excessive and unreasonable."
In addition to the stock options, Lessard's 2002 compensation also included a base salary of $406,000 and a bonus of $406,000 for a total of $18.4 million.
The merchants, who filed the suit, represent about half the independent company stores. They want the judge to determine how much Lessard's compensation should be scaled back from 1999 to 2002.
Metro called the claims "ill-founded and damaging to the company" and intends to "vigorously challenge" the suit.
The suit is the latest dispute in a long-running battle between Metro and its independent merchants, who claim that the grocer has been slowly eroding their influence with the proliferation of new stores that are corporate. The independent merchants have seen their representation on the company's 15-member board reduced to five from seven members. Last year, Metro was ranked No. 4 among Canada's food retailers in sales volume and market share, behind Loblaw, Sobeys and Safeway, according to CIBC World Markets estimates.