OTTAWA––Heading into the COVID-19 pandemic, Canada’s 100 highest paid CEOs made 202 times more than the average worker made in 2019, according to a new report from the Canadian Centre for Policy Alternatives (CCPA). While this gap narrowed slightly compared to 2018, when the average top paid CEO made a record 227 times the average Canadian income, this is only the third year it has been higher than 200:1.
That means by 11:17 a.m. on January 4, the first working day of the year, the average top paid CEO will have made as much money as the average Canadian worker will make all year—about an hour later than they did last year.
“Put another way, when a high paid CEO has a less plush year it means putting in a single extra hour of work before lunch on January 4, before netting the yearly income of an average Canadian worker. For the average Canadian worker, a tough year means grave financial insecurity and taking on even more debt to manage,” said study author and CCPA Senior Economist David Macdonald.
Although full 2020 CEO pay data won’t be available until spring 2021, early estimates show that roughly half of top paid CEOs will likely keep or even increase their compensation levels, due to the stock market boom during the pandemic.
“The pandemic has not been bad for everyone. At the very top of the income spectrum, Canada’s highest paid CEOs have been sitting through it atop a golden cushion bolstered by years of out of control rates of executive pay,” added Macdonald. “Even if the companies they run receive government support, their bonuses will continue. Meanwhile, for lower-income workers the hardships of the COVID-19 crisis—mass layoffs in the spring and persistently weak rehiring ever since—will continue to plague them. Clearly we aren’t really all in this together.”
The highest paid 100 CEOs on the S&P/TSX Composite index made, on average, $10.8 million in 2019 (the most recent data available) compared to $11.8 million in 2018;
Overall pay trends remain firmly pointed skyward: the “minimum wage” needed to get on the 2019 list of 100 highest paid CEOs was $6.3 million, up from $6.1 million in 2018;
Over a third (36) of the top paid 100 CEOs of 2019 ran companies that applied for and received payroll support in 2020 through the Canada Emergency Wage Subsidy (CEWS), including subsidiaries and franchises;
Meanwhile, among those making $17/ hour or less there are roughly 15 per cent fewer people working now than before the pandemic. Workers with the highest wages fully recovered by July 2020.
The report recommends eliminating executive tax benefits such as the capital gains and stock option deductions, introducing new marginal tax rates on extreme incomes and, as Spain and the Netherlands have done, ensuring companies who received COVID-related wage supports like the CEWS do not pay executive bonuses.
“When the data becomes available, it’s a virtual certainty that CEOs will have the federal government paying their payroll at the same time as they receive million dollar bonuses,” said Macdonald. “There is no shame in the c-suite in this regard, it’s up to policymakers to ensure that this doesn’t happen.”
The full report can be downloaded online here.
For interviews contact: Alyssa O’Dell, CCPA media and public relations officer, at 343-998-7575 or [email protected].