Who Pays More Compensation? A Canada vs. U.S. Taste Test
Updated: 7 hours ago
Same roles. Different markets. Different pay.
How does the compensation received by decision makers at Canadian and American publicly traded organizations compare?
To explore what happens to compensation when we cross the border, we looked at Dollarama (Canadian) and Five Below (American). These two discount retailers have comparable business models and revenues that fall within ~8% of each other, yet operate in separate markets primarily on opposite sides of the border. This makes them compelling for an apples-to-apples comparison.
And despite the similarities, their compensation tells a very different story.
Throughout this article, we take a deeper dive into Executive and Director compensation differences in relation to compensation figures, targets, and performance metrics to understand how compensation differs on either side of the border.
Based on 2025 public fillings¹ ², Five Below's Chief Executive Officers (CEO) and Named Executive Officers (NEOs) received 55% and 169% more in total compensation, respectively, than their counterparts at Dollarama. The story continues at the board level, where Five Below’s Directors received 96% more in total compensation than Dollarama’s.
For the purposes of this report all compensation figures are in Canadian dollars ($) and have been converted from USD at the average annual Bank of Canada Exchange rate for 2025 (1 CAD = 1.3978 USD).
Organization: Apples to Apples
Dollarama Inc. (Dollarama) is listed on the TSX, while Five Below Inc. (Five Below) is on the NASDAQ. For all intents and purposes, these are two very similar apples, except one was grown in Quebec and other in Pennsylvania.
So, let's put them to a blind taste test. Based solely on the organizational characteristics below, can you tell which organization is which?
We can also add one more metric to the mix: Organization X has a 309% higher market capitalization than Organization Y. Setting valuation aside, both operate in discount retail, target value-conscious consumers and maintain broadly comparable organizational profiles.
The long-awaited reveal…..
Organization X is Dollarama, leaving Organization Y to be Five Below.
The difference in market capitalization is notable. Despite similarities in their underlying organizational characteristics, the market is pricing external factors into Dollarama compared to Five Below that these metrics simply don't portray.
There is one bruise in our otherwise clean cross-border comparison. Prior to July 2025, Dollarama and Five Below operated exclusively in their home markets of Canada and U.S., respectively. In July 2025, Dollarama acquired The Reject Shop (TRS), adding 402 Australian stores, which now represent approximately 19.2% of its total store footprint. In apple terms, Dollarama’s once all-McIntosh basket now includes a meaningful share of Granny Smiths, while Five Below’s basket remains entirely Honeycrisps. Although this adds an international dimension to Dollarama's business, these baskets remain compelling comparators for exploring how executive and director compensation practices differ between Canada and the United States.
Executive Compensation: Apples to Oranges
We have all seen the headlines surrounding U.S. CEO compensation, and the numbers can be eye watering. They have helped reinforce a familiar perception: American executives earn more than Canadians.
That perception is not limited to just the C-Suite. Canadian labour productivity (GDP per hour worked) is approximately 30% less than the U.S. while median wages trail U.S. levels by approximately $9.75 per hour, even after purchasing power parity adjustments³. In other words, there is evidence of a broader compensation gap between the two markets.
But does that same gap carry all the way to the top of the corporate tree?
Let's make sure we are comparing the same types of apples. For the purposes of this comparison, we grouped comparable executive roles into the buckets below. The NEO figures represent the average values amongst each organization’s Chief-level Named Executive Officers.
With comparable roles established, we can put the original question to the test: does the broader Canada-U.S. pay gap continue at the executive level?
The short answer is yes, and the gap gets considerably wider.
Five Below's CEO and NEOs received 55% and 169% more in total compensation than Dollarama's CEO and NEOs, respectively.
Note: Actual compensation was used for comparison purposes as Dollarama does not disclose long-term incentive targets for all NEOs. As a result, actual compensation may reflect company-specific factors and 2025 performance outcomes.
Let's peel these apples to the core
Headline compensation only tells us how much executives received. The more interesting question is why and how.
A large part of the difference sits within equity compensation. Five Below's equity incentive dollar value is 76% higher for its CEO and 241% higher for its NEOs compared with Dollarama.
But there is another interesting bruise. A larger dollar-denominated equity award does not necessarily mean Five Below provides a richer equity opportunity relative to salary. As of 2026, Dollarama’s CEO has a long term incentive target equal to 470% of base salary, compared with 320% for Five Below’s CEO.
In other words, the size of the apple matters just as much as how we slice it.
Similar ingredients, different recipes
The differences extend beyond the dollar figures.
Dollarama uses a broader collection of short-term performance measures, with up to five metrics spanning measures such as EBITDA and ESG objectives. Five Below takes a more concentrated approach, relying solely on Net Sales and Operating Income.
Long-term incentives tell a similar story: the overall objective is comparable, but the recipe is different.
Both organizations use Performance Share Units (PSUs) as their primary long-term incentive vehicle. PSUs generally vest based on performance over a three-year period, with the ultimate payout depending on the achievement of predetermined objectives. Awards can range from 0% for below-threshold performance to 200% at maximum performance.
Where the programs begin to differ is in their secondary LTI vehicles. Dollarama uses stock options as the other vehicle for its LTI mix (up to 50%), while Five Below uses Restricted Share Units (RSUs) for the remaining 40%.
Importantly, an equity award is not the same as cash in hand. The amount awarded represents an opportunity, not necessarily what the executive ultimately receives. The value of options, PSUs, and RSUs change influx with the company’s share price, while PSUs add another layer of financial performance metrics.
This matters when comparing the two companies. Looking at the previous five-year period, Dollarama’s share price has grown ~276%, compared to just ~19% for Five Below. Ultimately, even if two executives receive similarly sized equity awards, differences in share price performance can result in very different values by the time awards vest or are exercised.
So, what's driving the pay difference?
Here is where our apples-to-oranges comparison gets interesting.
Despite the significant differences in total compensation, the incentive targets themselves are not necessarily worlds apart. NEO STI targets are approximately 75% of base salary, while NEO LTI opportunities generally fall within a range of approximately 130% to 290% of base salary.
The larger difference begins with base salary.
Five Below’s executive salaries are approximately $300,000 to $390,000 higher than the comparable positions at Dollarama. Because STI and LTI opportunities are generally expressed as multiples or percentages of base salary, that initial difference can compound throughout the compensation package.
Put simply, a bigger apple produces bigger slices.
Based on the compensation structures examined, an incremental dollar of base salary can ultimately translate into approximately 9x that amount in total compensation opportunity at Five Below and 6.5x at Dollarama, once the associated incentive opportunities are considered.
The takeaway
At first glance, the answer appears simple: U.S. executives are paid more.
But peeling back the layers tells a more nuanced story. The difference is not simply the result of Five Below using dramatically larger incentive percentages. Rather, a higher starting salary creates a larger foundation upon which annual and long-term incentive opportunities are built.
Dollarama and Five Below may be remarkably similar businesses, but when it comes to executive compensation, the two apples can carry very different price tags.
Director Compensation: Back to Apples and Apples?
The compensation gap does not stop at the C-suite. Five Below’s Board Chair receives 1.96x the compensation of Dollarama’s Board Chair, while its directors receive approximately 2.12x the compensation of Dollarama’s directors.
This is particularly interesting given what we learned in our original taste test. Dollarama’s market capitalization is approximately 3.1x that of Five Below, yet Five Below provides considerably higher director compensation. While company size and market capitalization do not necessarily translate directly into greater board responsibilities, this suggests that organizational scale alone does not explain the cross-border compensation gap.
So, let’s take another bite and look at how each board’s compensation is structured:
Slicing the director’s apples
Both organizations compensate directors through a combination of cash and equity, but Five Below puts considerably more weight on equity. Equity represents approximately 62% of director compensation at Five Below, compared to just 37% at Dollarama.
They also use different vehicles to deliver that equity. Dollarama uses Deferred Share Units (DSUs), a common approach among Canadian issuers, while Five Below uses Restricted Share Units (RSUs), which are more prevalent among U.S. issuers.
Although structured differently, both vehicles serve a similar governance objective: strengthening alignment between directors and long-term shareholder interests. The key distinction lies primarily in how and when the awards vest, settle and are taxed under their respective jurisdictions.
Putting some skin on the apple
That long-term alignment extends to share ownership requirements.
Dollarama requires directors to hold equity equal to 3x their total annual retainer ($543,000), while Five Below requires ownership equal to 5x the annual cash retainer ($629,010). While the basis differs, both structures reflect common market approaches in their respective markets. Directors at both organizations have five years from their appointment to achieve their respective requirements.
Despite Five Below’s substantially higher director compensation, the resulting ownership requirements are therefore relatively comparable in absolute dollar terms. This makes for an interesting contrast: different compensation levels, but similar expectations for putting skin in the game.
Same recipe, different flavour
At the committee level, the similarities continue. Both boards maintain three core committees covering audit, human resources/compensation and governance-related responsibilities.
Where they differ is in how that additional responsibility is recognized.
Dollarama provides additional compensation to both committee chairs and members, with committee chairs receiving, on average, 2.15x the additional compensation of committee members. Five Below takes a different approach: committee members do not receive an additional retainer, while committee chairs do.
Even then, the U.S. premium reappears. Five Below’s committee chairs receive, on average, approximately 1.8x the additional compensation provided to the corresponding committee chairs at Dollarama.
Key takeaway: Five Below continues to pay more, even when the apples being compared are sitting around the boardroom table.
Conclusion: So, Are We Comparing Apples to Apples?
At first glance, Dollarama and Five Below look like natural compensation comparators. They operate similar businesses, target similar consumers and have remarkably comparable organizational profiles. Same orchard, same type of apple, right? Not quite. One is 80.8% McIntosh while the other is pure Honeycrisp.
Despite the similarities between Dollarama and Five Below, their executive talent markets remain largely grounded on opposite sides of the Canada-U.S. border. Unless an organization demonstrably competes for executive talent across North America, a Canadian-to-Canadian or U.S.-to-U.S. comparison will generally provide the more relevant compensation benchmark. In discount retail, there is no obvious need to cross the border simply because a company on the other side looks operationally similar.
Value of an apple across the border
Taking a step back, executive compensation on either side of the border is built from remarkably similar ingredients: base salary, short-term incentives and long-term incentives, with a significant proportion of total pay tied to performance. It is only when you take a closer look that the varieties, and their differences, become clear: a McIntosh is not quite a Honeycrisp.
The biggest difference in our case study was not necessarily the recipe. It was the price of the ingredients.
For the C-suite executives examined, Five Below's NEOs received 169% more total compensation than their counterparts at Dollarama. As we peeled back the layers, higher base salaries provided a larger foundation upon which incentive opportunities were built, magnifying the difference in overall compensation.
So, after comparing the businesses, executives and boards, what did our taste test tell us?
Dollarama and Five Below may be apples-to-apples businesses, but when it comes to compensation, crossing the border can turn apples into oranges.
And who knew there was this much money in discount retail?
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