Canada's Top CEOs Making 195 Times More Than Average Canadian

The annual CEO pay review by the left-leaning Canadian Centre for Policy Alternatives (CCPA) shows that CEO pay is at levels it hasn't reached since 2007.

The review was done by economist and CCPA Research Associate Hugh Mackenzie, looking at how much the 100 highest paid CEOs in Canada made in 2013 compared to the average Canadian worker. In 2013, these 100 people brought home an average of $9, 213, 416, which the review says it more than the reported deficits for every province in Canada except for Ontario and Quebec. The study contrasts this pay with Statistics Canada's report of the annual average salary in Canada that year: $47,358.

Mackenzie said that by 11:41 a.m. on Friday, the first official workday of the year, that the average top 100 paid CEO in Canada will already have made the annual full-time salary of the average Canadian.

Canada's highest paid CEOs made 195 times more than the average Canadian worker, and 237 times more than the average female worker in Canada. The gender gap was also still evident in the study, with women working full-time for the full year bringing home 72 per cent of the average men's pay. Working women's average full-time annual wage was just under $39,000.

CCPA also found that CEO pay had significantly increased in the past few years. The last time CEO pay was up so high was in 2007, when the average pay for the top 100 highest paid CEOs was $10 million. In 2008, CCPA reports that the top 100 paid CEOs had an average annual income of $7.35 million, showing an increase from 2008 to 2013 of 25 per cent.

The average weekly wage, as reported by Statistics Canada, increased by 12.3 per cent in Canada during that same period. From 2008 to 2013, CCPA reports that the weighted average minumum wage increased by 13 per cent, from $9.02 to $10.20.

Canada's highest paid CEO in 2013 was Gerald W. Schwartz of Onex Corporation, who took home $87, 917, 026. In second was Nadir Mohamed of Rogers Communications Inc with $26, 769, 973 and third was Michael W. Wilson from Agrium Inc with $23, 818, 740. Those wages include the base salary, bonuses, shares, options, pensions, and other compensation for these CEOs.

However, a statement by the Montreal Economic Report (MEI), which was also released Friday, criticizes the CCPA's annual report. The MEI acknowledges that while the CCPA “does not make any explicit recommendations in its report”, it does say on its website that wealth inequality is a large challenge for Canada and that its release last year said that there wasn't any clear relationship between CEOs' compensation and corporate performance.

“One possible implication is that these CEOs make too much money, and their pay should therefore be redistributed among their employees,” said the statement from MEI. “Using information and figures from the report the CCPA released last year, the MEI’s researchers crunched a few numbers to see what effect this would have on the well-being of those employees.”

MEI found that if the total compensation of the 100 highest paid CEOS in Canada was divided by the employees working for those CEOS, each employee would get $328 per year. “Redistributing CEO compensation in its entirety to their employees (which is an extreme measure that not even the CCPA proposes) would therefore provide each of those employees with approximately 90¢ per day,” said MEI. “Given that the average annual income of Canadians listed in that same report is $46,634, this would represent a 0.7% wage increase.”

If this money was simply taxed away from CEOs and given to the 4.7 million low-income Canadians in 2012, MEI said that the measure “would similarly have an absolutely negligible effect on well-being, as they would each receive a total of 46¢ per day. “

“Even if we assumed, completely unrealistically, that these top CEOs would keep doing their jobs for zero compensation, redistributing their before-tax pay would basically have no effect whatsoever on the well-being of either their employees or low-income Canadians,” concludes Michel Kelly-Gagnon, President and CEO of the MEI. “The CCPA’s annual report is therefore an exercise in envy, pure and simple, with nothing useful to contribute to serious discussions of public policies aimed at helping the less fortunate.”

Mackenzie concluded CCPA's most recent report by suggesting that the government help close the income gap by either regulation or higher taxation.