And they have already earned more in 2020 than most of us will earn all year
As Canada gets back to work after the holidays, it’s a sobering thought that some top executives have already earned more than the average worker’s entire annual wage.
According to the Canadian Centre for Policy Alternatives, the highest paid CEOs in Canada made 227 times more than the average worker based on 2018 figures (the most recent data available), up from 197 times in 2017.
“Put another way, by 10:09 a.m. on January 2, the average top CEOs will have made as much money as the average Canadian worker will make all year. That’s the earliest time on record in the 13 years we’ve been tracking these numbers,” said report author and CCPA Senior Economist David Macdonald.
The top 100 CEOs of S&P/TSX Composite Index listed companies made an average $11.8 million in 2018, up from $10.4 million.
While average workers saw their wages increase by 2.8% between 2017 and 2018, the top CEOs enjoyed an 18% hike.
“Growth in the vast gap between excessive CEO compensation and average incomes is an indicator of Canada’s income inequality juggernaut,” adds Macdonald. “Wealth continues to concentrate at the very top while average incomes barely keep up with inflation.”
Impact on losses
Performance bonuses based on stock prices accounted for 79% of average top-CEO pay.
Among the companies that posted losses in 2018, one third said that c-suite pay accounted for at least 40% of the losses, while among profitable companies, 13% paid C-suite executives more than what they paid in corporate income tax overall.
"The federal government needs to reckon with the runaway C-suite compensation that is contributing to Canada's growing income inequality gap. Left to their own devices, it is clear what these companies prioritize—big bucks for top positions regardless of performance, leaving crumbs for the vast majority of their workforce," Macdonald added.
CCPA says that the government could address excessive CEO pay through a review of tax loopholes, as proposed in the December fiscal update, with a focus on the preferential treatment of stock options and capital gains.
It also says that higher tax brackets for the extremely rich and the elimination of corporate deductions for pay over a million dollars could also help.
As of 10:09 this morning, the 100 people in Canada who can say "it's all gucci" and mean it quite literally have made as much money as the average Canadian worker will make all year. https://t.co/jYFWToufYA#ceo2020 #cdnpoli #cdnecon pic.twitter.com/0U9nCFFSe6
— The CCPA (@ccpa) January 2, 2020
