Hint: It's over a hundred times higher than average
Canada's highest-paid chief executive officers (CEOs) were paid an average of $10.9 million in 2020, according to a new report from independent think tank Canadian Centre for Policy Alternatives (CCPA). The report, called "Another Year in Paradise: CEO Pay in 2020," reviewed the earnings of Canada's 100 highest-paid CEOs from the S&P/TSX Composite.
According to the report, 2020's average is even higher than 2019 despite the pandemic, with author CCPA Senior Economic David Macdonald describing the pay as "impervious to any shock to the system."
The report said that the total compensation of the top CEOs is made up of 82% variable compensation, which includes different forms of incentives like cash bonuses and stock options.
"Bonus pay has been increasing in importance compared to salaries. If there is a singular reason why CEO pay is in the stratosphere, it's because out of control bonuses are protected from going down, even in a pandemic," said Macdonald in a statement.
However, even with such earnings, the report discovered that 30 of the 100 richest CEOs led companies that received Canada Emergency Wage Subsidy. Fourteen of them, on the other hand, changed their bonuses to protect them from COVID-19 impact, while five experienced both.
Read more: CEOs get hefty pay despite pandemic slump: report
'191 times' greater than average pay
According to a statement from the CCPA, the current earnings of the CEOs is already 191 times higher than the average worker wage.
"At this rate it will take the average worker the entire year to accrue what Canada's highest-paid CEOs will rack up just before lunch (11:54 a.m.) on January 4 — the first official working day of the year," said Macdonald.
"2020 was a horrible year for many workers hit hard by the pandemic, but CEO pay appears to be impervious to any shock to the system."
The result of the report highlights the growing gap between workers and employers - which the CCPA said can be reduced through higher taxation levels.
It made the following recommendations to ensure "fairer CEO pay measures":
- Capping the corporate deductibility at $1 million in total compensation per employee;
- Eliminating the capital gains inclusion rate loophole;
- Complete elimination of the stock option deduction for large companies;
- Implementing higher top marginal tax brackets;
- Introducing a wealth tax.
