GM Report Raises

Announcing Our New Minimum Wage and Compensation Overhaul

To Our Community,

I have a lot of good news to share with you today.

When I wrote to our employees on August 19, I concluded by saying:

I want you to know that the leadership team has been involved in a comprehensive review of our (compensation) structure, and this (employment) meeting furthered my resolve that the topic should be at the top of our list of our priorities.

Although we have additional analyses to complete, I expect to have more to say on our compensation structure on September 9.

Today, I am writing to let everyone know that this morning the leadership team approved a plan to completely overhaul the Co-op’s compensation structure, and everyone at the Co-op will benefit.

The Plan

Because this effort resulted in a complete program overall, we are rolling this plan out in phases. Here is how it will work.

PHASE 1 – Now

We are raising our minimum wage. As you may recall, we pledged to raise our minimum salary to $15 an hour by 2024.

Thanks to our employees’ hard work, our shoppers’ loyalty, and our success over the last few years, we are in a position to do that now.

Anyone who is currently paid less than $15 an hour and all subsequent new hires will be brought up to that level immediately. Our review also revealed a degree of wage ‘compression.’ Wage compression occurs when the pay difference between employees shrinks to the point that it is no longer equitable. For employees already being paid more than $15 an hour but are close to that rate, their salaries will be adjusted to account for their wage compression.

Increases will be effective the first pay period of the fourth quarter. Every employee impacted will be notified.

Raising our minimum wage is the first stage of a comprehensive multiphase approach to modifying our compensation plan. For now we are delivering on our promise, sooner than originally planned.

PHASE 2 – No Later than April 1, 2022

We will be completely changing our salary structure to more objectively reward employee performance, due to the skills they currently possess, and those they acquire through training and development.

Highlights:

1) Skill development opportunities are being expanded.

2) Pathways, our training program, is being redesigned and will be more directly tied to compensation changes upon completion of training.

3) Our salary ranges for each grade are undergoing a comprehensive review to ensure we are more in line with the marketplace. Does the grocery business enable us to pay the highest wages in the area? No. Are we committed to paying fair and competitive wages? Absolutely!

There is a lot of work to do on this, so the process will take some time. Details to come.

PHASE 3 – No later than July 1, 2022

Finally, we will make all necessary salary adjustments identified in phase 2.

Phases 2 and 3 are a top priority for the coming year, and will be reviewed on a quarterly basis going forward.

Like many storied businesses, changes in the marketplace have out-paced our pay structure. That structure has provided great careers, but like everything else, it needs to evolve.

What I like so much about this plan is that it is comprehensive. We are addressing a higher minimum wage, wage compression, and objectively rewarding employees for their performance, learning, and development. There are opportunities here for everyone.

Our employees’ collective efforts are the reason we are able to make these changes. They have been there doing their jobs through the toughest conditions imaginable, and as a result, we have been successful. We now have the resources to make this plan a reality.

Wrap Up

I would like to thank all of members and shoppers for the continued support. We will talk again next Thursday. In the meantime, be kind to one another and to yourselves, and we look forward to serving you in our stores and at the curbside.

Onward and upward,

Paul

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Paul Guidone

Paul Guidone, CFA, spent the better part of four decades in the investment management business here and abroad. He held positions ranging from analyst through Deputy Chairman and Group CEO, at organizations such as Citigroup (US) and The HSBC Group (London and Hong Kong). He joined the Co-op in 2016 as the CFO and in 2018 became Strategic Advisor to the General Manager. Paul was appointed by the Co-op Board as interim General Manager in March 2020 and General Manager in September 2020. To contact, email PGuidone@coopfoodstore.com.

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