CEOs’ pay 155 times more than average Canadian

The recession may have hammered the average Canadian but a new survey suggests CEOs weathered the storm in fine form. An examination of the 100 fattest pay packages handed to executives at publicly traded companies in Canada shows they pulled in an average $6.6 million each in 2009.

The recession may have hammered the average Canadian but a new survey suggests CEOs weathered the storm in fine form.

An examination of the 100 fattest pay packages handed to executives at publicly traded companies in Canada shows they pulled in an average $6.6 million each in 2009.

That’s a far cry from the $42,988 the average Canadian makes and it dwarfs the $19,877 a minimum-wage worker would earn in a year.

The study by the Canadian Centre for Policy Alternatives says Canada’s best-paid CEOs made 155 times more than the average Canadian.

“Canadians may still be feeling the pain from a worldwide economic meltdown caused by reckless financial speculation but Canada’s business elite has preserved its privileged position,” writes author Hugh Mackenzie.

The biggest pay package went to Aaron Regent at Barrick Gold Corp., (TSX:ABX) who made $24.2 million in 2009, according to Mackenzie’s calculations. In second place was Hunter Harrison at Canadian National Railway Co., (TSX:CNR) at $17.3 million, followed by Gerald Schwartz at Onex Corp (TSX:OCX)., at $16.7 million.

Still, CEO earnings dropped from the previous year. Mackenzie’s study of 2008 compensation showed CEOs were earning 174 times the average Canadian, compared to the 155 ratio for 2009.

In 2008, CEOs were paid an average of $7.3 million, or almost 11 per cent more than 2009 — not taking inflation into account.

Average Canadians, meanwhile, saw a very small climb in their earnings in 2009, keeping pace with inflation.

It’s possible that the gap has begun to shrink, Mackenzie says. But generally, CEO pay packages are much higher nowadays than during the 1990s. In 1998, for example, the top 100 CEOs made 104 times the average Canadian.

Since then, CEO pay has outpaced inflation by 53 per cent, while average earnings rose just four per cent more than inflation over the same 10 years, Mackenzie figures.

“The gap has been growing pretty substantially over the last 20 years,” he said. The rise in executive pay partly helps to explain why income inequality in Canada is growing so quickly, Mackenzie says.

It’s a problem, he argues, because most executive packages are tied to future share prices, rather than the day-to-day functioning of the company. So instead of paying close attention to the firm’s long-term returns and actual production, executives are tempted to increase short-term value in order to boost stock prices.

“These pay systems provide powerful incentives to these corporate leaders to make decisions in their short-term interests but that are not necessarily good for the long term,” Mackenzie says.

Public resentment of such big compensation packages has soared in the United States in the wake of the financial crisis and bail-out packages that inadvertently rewarded top bankers whose firms were failing.

Canada, however, has not seen much of a backlash, Mackenzie says.

He looks to the tax system for solutions. If Ottawa taxed capital gains the same way it taxed ordinary income, corporate boards would not be so tempted to tie bonuses to the stock performance, Mackenzie argues.

But he doesn’t see much political will to increase taxes on the rich.

He says the number-crunching actually underestimates the true earnings of CEOs because of the conservative way corporations report the value of stock options in their executive compensation disclosures.

He estimates that the big banks, for example, are under-reporting the value of 2009 stock options by about $5.1 million per CEO.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A candlelight vigil will be held in Red Deer on Thursday to honour the 350-plus people killed in the Easter bombing attack in Sri Lanka. Contributed photo
Candlelight vigil planned for deaths linked to Olymel COVID-19 outbreak

A candlelight vigil is being planned for those who died due to… Continue reading

Traffic will be delayed on 40th Avenue and 19th Street until the end of February. (Advocate file photo).
Traffic delays expected downtown this weekend

Red Deer drivers will be delayed in the downtown area of the… Continue reading

COVID
Red Deer down to 313 active cases of COVID-19

Alberta reports an additional 411 COVID-19 cases

Friday, Alberta Health Minister Tyler Shandro announced the province’s plan to reduce surgical wait times over the next two years. (Photo by Paul Taillon/Office of the Premier)
Alberta provides more funding to reduce surgery wait times

The province is working to provide better access to surgeries over the… Continue reading

Bryson, six, and Mara, eight, play with puppies from Dogs With Wings Saturday. (Photo by Sean McIntosh/Advocate staff)
WATCH: Dogs With Wings introduces Red Deer program

A program that trains puppies to be certified service, autism, facility and… Continue reading

FILE - In this May 3, 2020 file photo, Veneuzuelan security forces guard the shore and a boat in which authorities claim a group of armed men landed in the port city of La Guaira, Venezuela, calling it an armed maritime incursion from neighboring Colombia. Yacsy vÅlvarez, a woman who was charged in Colombia with helping organize the attempted armed invasion to overthrow Venezuela‚Äôs socialist government, says Colombian authorities were aware of the plotters‚Äô movements and did nothing to stop them and that she‚Äôs being made a scapegoat for the sins of others who abandoned the would be rebels. (AP Photo/Matias Delacroix, File)
3 Venezuelans plead guilty for aiding anti-Maduro plot

3 Venezuelans plead guilty for aiding anti-Maduro plot

Anti-coup protesters maintain their position behind a barricade despite smoke from tear gas in San Chaung township in Yangon, Myanmar Friday, Mar. 5, 2021. Demonstrators defy growing violence by security forces and stage more anti-coup protests ahead of a special U.N. Security Council meeting on the country’s political crisis. (AP Photo)
Protesters defy Myanmar security forces as UN action urged

Protesters defy Myanmar security forces as UN action urged

Prime Minister Justin Trudeau holds a press conference in Ottawa Friday, March 5, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Trudeau holds firm on premiers’ health-care funding demands, COVID-19 aid comes first

Trudeau holds firm on premiers’ health-care funding demands, COVID-19 aid comes first

A vial of the Johnson & Johnson COVID-19 vaccine is displayed at South Shore University Hospital, Wednesday, March 3, 2021 in Bay Shore, N.Y. Janssen Pharmaceuticals is a division of Johnson & Johnson. THE CANADIAN PRESS/AP/Mark Lennihan
Provinces revise vaccination timelines as Johnson & Johnson’s COVID vaccine approved

Provinces revise vaccination timelines as Johnson & Johnson’s COVID vaccine approved

FILE - In this June 11, 2016 file photo, Britain's Queen Elizabeth II waves as she watches the flypast, with Prince Philip, to right, Prince William, centre, with his son Prince George, front, Kate, Duchess of Cambridge holding Princess Charlotte, centre left, with The Prince of Wales standing with The Duchess of Cornwall, and Princess Anne, fourth left, on the balcony during the Trooping The Colour parade at Buckingham Palace, in London. The timing couldn’t be worse for Harry and Meghan. The Duke and Duchess of Sussex will finally get the chance to tell the story behind their departure from royal duties directly to the public on Sunday, March 7, 2021 when their two-hour interview with Oprah Winfrey is broadcast. (AP Photo/Tim Ireland, File)
No winners: UK waits for Harry, Meghan’s take on royal split

No winners: UK waits for Harry, Meghan’s take on royal split

Animated character Raya, voiced by Kelly Marie Tran, left, appears with Sisu the dragon in a scene from "Raya and the Last Dragon." THE CANADIAN PRESS/Disney+ via AP
Canadian animator on adding cultural authenticity to ‘Raya and the Last Dragon’

Canadian animator on adding cultural authenticity to ‘Raya and the Last Dragon’

Members of the National Guard, Philip Fane, center, and Megan Puckett, right, help a motorist register at a COVID-19 vaccination site in Long Beach, Calif., Friday, March 5, 2021. More than 27 million Americans fully vaccinated against the coronavirus will have to keep waiting for guidance from U.S. health officials for what they should and shouldn't do. The Biden administration said Friday it's focused on getting the guidance right and accommodating emerging science. (AP Photo/Jae C. Hong)
California to let Major League Baseball, Disneyland reopen

California to let Major League Baseball, Disneyland reopen

Visitors wearing face masks leave the Alamo, Wednesday, March 3, 2021, in San Antonio. Gov. Greg Abbott says Texas is lifting a mask mandate and lifting business capacity limits next week. (AP Photo/Eric Gay)
Study finds mask mandates, dining out influence virus spread

Study finds mask mandates, dining out influence virus spread

Most Read