Analysis reveals surge in compensation for Canadian corporate chiefs
The executives in charge of Canada’s top corporations have expanded their compensation and widened the pay gap with the average worker.
An annual analysis of CEO pay by the Canadian Centre for Policy Alternatives (CCPA) found that the 100 highest-paid chief executives of S&P/TSX listed firms were paid 227 times more than the average Canadian worker.
The increase – based on 2018 figures as the most recent year available – was a sharp rise from 197 in the previous year.
“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.
On average, Canada’s top 100 CEOs pocketed a cool $11.8 million in 2018, having enjoyed a 61% increase since 2008. In the year from 2017 to 2018, their pay increased 18% while the average Canadian worker gained just 2.6%.
“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.”
Paid for failure?
But surely the huge pay cheques of top execs are only because their firms are performing?
Actually, the analysis found that although 79% of the average CEO’s pay in 2018 came from bonuses related to company stock prices, complicated formulas mean CEOs get much of their variable pay regardless of stock performance.
Just four women made the top 100 list, based on pay of at least $6 million, but this was one better than the previous year.
CCPA is calling for action from the federal government to address the influence of high CEO pay on the growing income inequality gap, such as a review of tax loopholes and higher tax brackets for the extremely rich.
