If they were to live on the average worker’s pay, Canada’s CEOs could stop working at around 11 a.m. on Jan. 2 and take the rest of the year off. That’s because by 10:57 a.m. on the second day of the year, their earnings will have already hit $49,738, the equivalent of the country’s average wage, according to research by the Canadian Centre for Policy Alternatives (CPPA).
READ MORE: Here are the pay perks you’d enjoy if you were a CEO in Canada
Canada’s CEO pay broke a new record in 2016, with the 100 top-paid chief executives of publicly traded companies netting $10.4 million on average, or 209 times the average income, the CPPA said in its latest annual survey of chief executives’ compensation. In 2015, the average CEO pay was $9.6 million, or 193 times more than what the average Canadian made.
READ MORE: Here are the jobs with the highest — and lowest — wage growth in Canada
“Canada’s corporate executives were among the loudest critics of a new $15 minimum wage in provinces like Ontario and Alberta, meanwhile the highest paid among them were raking in record-breaking earnings,” the report’s author, CCPA senior economist David Macdonald, said in a statement.
“CEOs are making 316 times more than someone who makes $15 an hour. If shareholders can afford this year’s CEO pay hike, they should absolutely be endorsing higher wages at the bottom as well.”
WATCH: Why a CEO took a massive pay cut
On an hourly base, CEO compensation was the equivalent of nearly $2,490 per hour last year, the CCPA calculated. That was up from almost $720 an hour in 2015.
Topping the national ranking of fat paycheques was Joseph Papa, CEO of Valeant Pharmaceuticals International, with total compensation worth over $83 million, according to the report. Donald Walker of Magna International, a global automotive supplier, came in second, with $28.6 million. Guy Laurence, former president and CEO of Rogers Communications, was third, with $24.6 million.
Only three women made it in the top 100 ranking, showing that “the glass ceiling still exists in this elite club,” the CCPA said.
Measures of executive pay vary but overall picture is the same
While CCPA figures show CEO pay posting significant gains between 2012 and 2016, other research has found executive compensation has been stagnating.
Since 2010, “CEO compensation has stabilized at about $8 million,” reads a 2017 report by the Institute for Governance of Private and Public Organizations (IGOPP).
The study looks at the median rather than average CEO pay, using companies listed in the TSX 60 index rather than the S&P/TSX Composite index examined in the CCPA report.
Looking at the median, which represents the mid-point of the pay distribution, means values won’t be skewed by a few CEOs who outearn the rest by a large margin, said Yvan Allaire, executive chair of IGOPP and author of its executive pay reports.
Indeed, the median CEO pay based on the CCPA’s ranking of the 100 best paid CEOs was $8.3 million, Allaire noted.
Still, even at $8 million, Canadian’s top CEOs are making vastly more than the average Canadian. The median compensation of Canadian CEOs went from being 62 times the private-sector average in 1998 to being 140 times the average salary in 2016, according to IGOPP.
LISTEN: Fraser Institute executive VP reacts to report on CEO compensation
CEO pay critics calling for tax changes
The CCPA and the IGOPP note that shares make up an increasingly large share of CEO compensation.
Shares made up a whopping 33 per cent of the pay package of CEOs tracked by the CCPA. And while those shares are taxed as if they were income when CEOs first received them, any subsequent gains they make on those stocks is taxed at half the regular rate.
Ottawa should eliminate that special tax treatment for shares handed out to executives as part of their pay, both the CCPA and Allaire said.
There is no reason to treat capital gains from those shares any differently than employment income, Allaire told Global News. “This looks like compensation and it should be treated like compensation,” he said.