OTTAWA — Canada’s 100 highest paid CEOs made 227 times more than the average worker made in 2018, surpassing all previous records, according to a new report from the Canadian Centre for Policy Alternatives (CCPA). That’s up from 197 times average worker pay 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 report shows the country’s highest paid 100 CEOs on the S&P/TSX Composite index made, on average, $11.8 million in 2018 (the most recent data available), beating 2016’s record of $10.4 million. Between 2008-18, top CEOs saw their pay rise by a staggering 61%, and by 18% between 2017-18 alone. Average worker pay rose just 2.6% between 2017-18.
“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.”
Even when companies lose money, executive pay remains high. New analysis of broader top executive payrolls beyond the CEO position (the “C-suite”) reveals that in some cases executive payrolls have become so large that they are a major factor in overall company losses.
Among the report’s findings:
- The “minimum wage” a top-100 CEO needed to make the list is $6 million annually, twice what it would have taken a decade ago;
- 79% of the average CEO’s pay in 2018 came from bonuses related to company stock prices, though complicated formulas insure CEOs get much of their variable pay regardless of stock performance;
- Only four women are among Canada’s richest 100 CEOs, up from three last year;
- Of the companies on the S&P/TSX composite that lost money, one-third reported C-suite payrolls amounting to at least 40% of their losses. These numbers undercut the argument that C-suite pay is based on performance;
- 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 adds. 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. Higher tax brackets for the extremely rich and the elimination of corporate deductions for pay over a million dollars would also help.
Fail Safe: CEO compensation in Canada is available for download on the CCPA website. For more information or to arrange interviews contact: Alyssa O’Dell, CCPA Media and Public Relations Officer, at 613-563-1341 x 307, cell 343-998-7575 or [email protected].
The CCPA is an independent, non-profit charitable research institute founded in 1980.