OTTAWA—Before lunch today—the first official work day of 2015—Canada’s highest paid CEOs will pocket what most Canadians work all year to earn, says the Canadian Centre for Policy Alternatives’ (CCPA) annual CEO pay review.
The review, by economist and CCPA Research Associate Hugh Mackenzie, finds CEO pay in Canada has rebounded to its pre-recession glory days. The review looks at 2013 compensation levels for Canada’s highest paid 100 CEOs and finds they pocketed an average $9.2 million—compared to the average Canadian income of $47,358. The last time CEO pay was this high was in 2007, when the average for the highest paid 100 CEOs was $10 million.
“By 11:41 a.m. today, just as most Canadians are getting ready for their lunch break on the first official work day of the year, the average of the 100 highest paid CEOs will have already pocketed what it takes the average Canadian an entire year, working full-time to earn,” says Mackenzie.
Key findings include:
- Canada’s 100 highest paid CEOs made 195 times more than the average Canadian worker and 237 times the average Canadian woman.
- Canada’s highest paid CEO in 2013 was Gerald W. Schwarz, whose total compensation package totaled a whopping $87.9 million.
- Pay has become more equitable in Canada… for CEOs. In 2008, the lowest-paid CEO in the top 100 reported compensation of $3.18 million. In 2013, the lowest paid of the top 100 took home $4.14 million, an increase of 30%.
- While only 11% of employees in Canada’s private sector belong to a defined benefit pension plan, 43 of the top 100 CEOs have a define benefit pension plan worth an average of $1.39 million a year.
- 75 of the top 100 CEOs received stock options as part of their pay package, worth an average of $3.16 million.
The report assesses the poor record of voluntary restraint and shareholder activism in reining in CEO compensation. It concludes that it is time to consider simple tax measures that provide a much more effective approach to closing the income gap in Canada.
“Canada would benefit from closing the tax loophole that allows executives to pay half the income tax rate on proceeds from cashing in stock options by claiming that revenue as capital gains,” says Mackenzie. “The stock options held by the highest paid 100 CEOs in 2013 represent a tax break worth half a billion dollars.”
Glory Days: CEO pay in Canada soaring to pre-recession heights is available on the CCPA website.
For more information contact Kerri-Anne Finn, CCPA Senior Communications Officer, at 613-563-1341 x306.