By 1:11 p.m. today on January 2, the first official working day of the year, Canada’s 100 highest paid CEOs have already pocketed $46,634 — what it takes most Canadians an entire year, working full-time, to earn.
Five years after a global recession knocked the wind out of Canada’s labour market, throwing tens of thousands of workers onto the unemployment line and sidelining a generation of young workers, the compensation of Canada’s CEO elite continues to sail along.
When you add up their total compensation, base salary, cash bonuses, grants of company shares, stock options, other compensation and pension compensation value in- crease, you get an average of $7.96-million.
That would be enough to wipe out the budgetary deficits of any one of the following provinces: Saskatchewan, Manitoba, Newfoundland and Labrador, New Brunswick, Nova Scotia or Prince Edward Island.
Compared with the estimated $2,686,287 one would need to make it into the top 0.01% of Canadian income earners, the lowest paid of the CEO top 100 took in $3,850,000. In fact, 152 of the CEOs whose companies are in the TSX Index pocketed enough compensation in 2012 to give them the key to Canada’s richest 0.01% club.
How does that compare with the rest of Canadians? In 2012, Canadians working full-time, full-year for the average weekly wage earned $46,634. To put that in context, the average wage in Canada increased by 6 per cent between 1998 and 2012 while the average compensation of Canada’s highest paid 100 CEOs increased by 73 per cent during that same time period (inflation- adjusted).
Reality was harsher for Canada’s minimum wage workers: If they were lucky enough to have a full-time 40-hour a week job, minimum wage workers earned, on average, $20,989 in 2012.
As a result of rising CEO compensation packages, Canada’s highest paid 100 CEOs now make 171 times more than Canadians earning the average wage. And that gap remains high by even recent historical standards: in 1998, the highest paid 100 Canadian CEOs earned 105 times more than the average wage.
Here’s how the stark gap between Canada’s 100 highest ranked CEOs and the rest of us plays out in real time: Just as most Canadians are wrapping up lunch break on the first official work day of the year — 1:11 p.m. on January 2 — the average of the 100 highest paid CEOs will have already pocketed what it takes the average Canadian an entire year to earn. All in a day’s work.
In 2011, a lucrative exit package paid by the company he built, Magna Inter- national, put self-made billionaire Frank Stronach on top of the list. In 2012, a new figure topped the list: E. Hunter Harrison, CEO of Canadian Pacific Rail- way, with a total compensation package of $49.5 million1 — leagues ahead of the second runner-up James C. Smith, CEO of Thomson-Reuters, whose compensation totaled $18.8 million.
The next two highest paid CEOs repre- sent the dominance of Canada’s natural resource economy: the CEOs from Talisman Energy, Eldorado Gold Corp. Stronach’s successor at Magna Inter- national, Donald Walker, round out the top 5. Reflecting the dominance of the finance sector in Canada, the CEOs of Canada’s top five banks can be found among the highest paid 30 CEOs.
One notable development is that there are now three women on Canada’s highest paid 100 list: Linda Hasenfratz, CEO of Linamar Corp., Dawn Farrell, CEO of TransAlta Corp., and Nancy Southern, CEO of ATCO Ltd. The previous year there was only one woman.
The Canadian Centre for Policy Alternatives’ annual CEO pay review, by economist and CCPA Research Associate Hugh Mackenzie, takes a snapshot of the 240 publicly listed Canadian corporations on the TSX Index, ranks the highest paid 100 CEOs on that list, and determines their average total compensation.
Source: Canadian Centre for Policy Alternatives | Image: Corporate hierarchy via Shutterstock