Editor’s note: An earlier version of this story incorrectly stated Joe Natale’s affiliation with Telus. In fact, Natale served as CEO of the company until 2015.
Canada’s highest-paid CEOs and other top executives shattered records for compensation in 2021, according to a new report, earning an average of $14.3 million as soaring inflation began to take hold.
The average calculated in the report from the Canadian Centre for Policy Alternatives (CCPA), released Tuesday, far surpasses the previous record of $11.8 million in 2018 and is over 31 per cent higher than 2020.
It’s also 243 times the average worker’s yearly salary of $58,800 in 2021, which marked just a three per cent increase from the year before.
According to the report, Canada’s highest-paid executives will have already made an average worker’s entire salary less than hour into the first working day of the new year.
The report compiled executive pay disclosures for 2021, focusing on chief executive officers as well as presidents, founders and retired CEOs that still received significant compensation.
Other top executives, like chief operating and financial officers, were not included. All figures were converted to Canadian dollars.
At the top of the list was Philip Fayer, chair and CEO of Montreal-based payment solutions company Nuvei, who earned a staggering $140.7 million in 2021.
Joe Natale, former president and CEO of Rogers Communications and former head of Telus, was the fifth-highest-paid executive with over $27.3 million.
The rest of the top 100 includes the heads of all of Canada’s major banks and energy corporations, as well as top companies like Shopify, Shaw Communications, CN Rail, SNC-Lavalin, Maple Leaf Foods and Canadian Tire.
The final name on the list, Cameco president and CEO Tim Gitzel, still earned $6.6 million — the highest-ever minimum compensation to make the top 100, according to the report.
Missing from the list were the leaders of Canada’s major grocers and airlines, despite both sectors being heavily criticized over the past year for raking in record profits amid soaring food costs and travel chaos.
The report, which was authored by CCPA senior economist David Macdonald, found inflation played a major role in soaring executive pay.
Although Canadians truly began feeling the squeeze of inflation in 2022, along with multiple interest rate hikes intended to tamp it down, inflation was already sitting at 4.7 per cent by December 2021 — more than twice the Bank of Canada’s benchmark of two per cent.
With companies hitting record profits in 2021 as a result of rising prices — a trend that only increased last year — executives earned more performance-based bonuses that drove up their compensation.
Those bonuses could be either paid in cash, shares or, increasingly, stock options.
In 2021, those bonuses made up 83 per cent of all compensation for the highest-paid CEOs, up from 70 per cent in 2008. Base salaries, meanwhile, have remained relatively stable during those years, according to the report.
“We think of inflation as bad for everyone, but for CEOs it’s the gift that keeps on giving,” Macdonald said in a statement.
The report also notes only three women made the top-100 list of highest-paid executives in Canada: Linda Hasenfratz of Linamar Group (who earned $15.3 million in 2021), Ritchie Bros. Auctioneers CEO Ann Fandozzi ($13 million) and then-Transalta leader Dawn Farrell ($7.7 million), who is now the CEO of Trans Mountain.
The report lists four recommendations for reigning in executive pay — namely through taxes — which Macdonald notes helped keep compensation lower.
“There is little point in paying outrageous amounts to CEOs if they are just going to have to pay it all back to the government in tax,” he writes in the report.
Beyond a small wealth tax of a few percentage points a year, the report recommends setting a $1-million cap for corporate deductions on compensation, meaning anything beyond that would be subject to corporate income taxes.
The latter recommendation would have created an additional $199 million in federal corporate tax dollars if applied to the 100 richest CEOs in 2021, according to the report.
The report also recommends raising the capital gains inclusion rate to 100 per cent — which would target the shares that make up executive bonuses — and higher marginal tax brackets between 70 and 80 per cent, which were seen in the 1950s and 60s when there was “much lower income inequality,” Macdonald wrote.
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