NB Liquor paid out $400K in bonuses after extra week added to 2017-18 fiscal year – New Brunswick
What a difference a week makes – at least when it comes to employee and management bonuses at NB Liquor.
The Crown-owned liquor corporation paid out almost $405,000 in extra sales incentive and executive bonus payments at the end of the 2017-18 fiscal year when it had to add an extra week to the fourth quarter.
In a statement, the corporation says the added week was an effort to comply with accounting procedures set out in the province’s Liquor Control Act.
Since 2014, the fiscal year-end dates had been earlier than allowed under provincial legislation, the statement said. In order to comply with the law, the year end was pushed back in 2017-18, requiring a 53rd week.
The added week increased the net income for the corporation, and in turn, the bonuses. However, by removing the week from the first quarter of 2018-19, targets weren’t met and no bonuses were paid for that quarter.
There was no mention of the impact of the added week in NB Liquor’s annual report for 2017-18. “NB Liquor has experienced a great fourth quarter,” then president Brian Harriman said in a news release on May 4, 2018. “We have grown the business by $9.1 million in sales versus the same quarter last fiscal.”
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The target for net income for 2017-18 had been set almost $5 million below the previous year because of the anticipated impact of a freeze on beer prices. However, actual net income for the year came in $3.5 million above the target.
Bonuses are paid out if actual results exceed approved budget targets.
According to figures provided by NB Liquor, the total amount paid to general employees under the sales incentive plan for 2017-18 was $862,531, with an additional $69,423 for executive management bonuses.
Those amounts for 2018-19 fell to $252,242 and $56,923 respectively.
The statement says NB Liquor’s 2017-18 financial statements indicate a fiscal year end of April 1, 2018 as compared to the prior year of March 26, 2017.
The company says future annual reports will detail the actual number of weeks to ensure there is no confusion