Canada’s 100 highest-paid CEOs made an average of $14.3M in 2021: report
Canada’s 100 highest-paid CEOs made a mean of $14.3 million in 2021, smashing the earlier file of $11.8 million set in 2018, in accordance with the Canadian Centre for Policy Alternatives (CCPA).
Report creator and CCPA senior economist David Macdonald mentioned that the 100 CEOS, who’re largely males, made 243 instances the typical Canadian employee in 2021, once more beating 2018’s file of 227 instances.
Most of the cash these CEOs made was not from their wage, however from so-called variable compensation, which incorporates bonuses, inventory choices and shares. That ratio has been climbing over time, with 83 per cent of CEOs’ complete pay in 2021 made up of variable compensation in contrast with 69 per cent in 2008, in accordance with the report.
“The last two years really exemplify everything that’s wrong with CEO pay,” mentioned Macdonald, calling it a “pay-for-luck scheme.”
Variable compensation is meant to be tied to firm efficiency, he mentioned, however the pandemic confirmed that is not at all times the case.
When firms fall on arduous financial instances, like throughout 2020, they typically tweak compensation guidelines to make sure government pay does not endure an excessive amount of, he mentioned; and when firms do effectively, like throughout excessive inflation, executives rake it in.
“In 2020, you have half of the CEOs on the list receiving government support, and/or changing their bonus formulas to exclude the negative impact of the pandemic on their pay,” he mentioned. “And then the following year is record inflation, which drives record profits, which drives record CEO compensation.”
“They’re cushioned from the bad, but when things are good, then the sky’s the limit.”
The CEO pay traits of 2021 are prone to have continued into 2022 as they have been pushed by traditionally excessive earnings and traditionally excessive inflation, mentioned Macdonald, which after all continued over the previous yr regardless of the Bank of Canada’s efforts to quell inflation with — once more, historic — rate of interest hikes.
“It’s unlikely that we’ll go back to the level that we saw pre-pandemic, it’s likely they’ll continue at much higher pay levels in 2022,” he mentioned.
“Inflation is bad for households. It’s bad for workers, generally. But it’s been great for the corporate sector, and it’s been great for CEO pay.”
The report affords 4 coverage proposals for governments, with one being the introduction of a wealth tax and one other being the implementation of upper high marginal tax brackets. There’s additionally a prompt restrict on the company deductibility of compensation over $1 million, which Macdonald mentioned might yield nearly $200 million in federal company revenue tax income; and a proposal to boost the capital good points inclusion fee to 100 per cent, which might imply taxing capital good points like common employment revenue, whereas presently solely 50 per cent of capital good points are thought of revenue for tax functions.
Previous stories had really helpful eliminating the so-called inventory possibility deduction, the place individuals receiving inventory choices as compensation would solely pay tax on 50 per cent of the worth of the inventory choices. In July 2021, a brand new regulation got here into impact capping that deduction at $200,000 value of shares, although Macdonald mentioned it might take just a few years to see the affect of this variation.
Macdonald mentioned he thinks important providers like long-term care or well being care could possibly be higher funded with extra tax income from the very best earners within the nation.
The highest-paid CEOs “boys’ club” continued in 2021, famous Macdonald, with extra males named Mark on the highest 100 listing (4) than there have been girls (three).
The highest-paid CEO in 2021 was Nuvei chair and CEO Philip Fayer, who made nearly $141 million in 2021 regardless of having an annual wage underneath one million {dollars}. The number-two spot was held by GFL Environmental Inc. president and CEO Patrick Dovigi, who made greater than $43 million in 2021.
The listing’s ground has been rising as common CEO pay will get increased, mentioned Macdonald; this yr the lowest-paid CEO on the listing was Cameco Corp.’s Tim Gitzel, at $6.7 million.
This report by The Canadian Press was first revealed Jan. 3, 2022.
