The highest-earning CEOs from TSX/S&P Composite listed firms remain well compensated despite the challenges of the pandemic
For many Canadians, almost two years under the pandemic cloud has hit their income hard.
But while millions have relied on government support to make ends meet, those leading some of the biggest firms in the country have posted their best year for compensation ever – and worsened income inequality.
According to an analysis by David Macdonald, a senior economist with the Canadian Centre for Policy Alternatives’ National Office, the top 100 earning chief executives of S&P/TSX Composite listed companies now get paid 191 times that of the average worker.
In 2020, while the economy and public health suffered, these high-earning business leaders pocketed an average $10.9 million, more than in the previous year.
If these figures remained the same, these CEOs would have earned the average worker’s income by yesterday lunchtime (Jan 4 at 11.54am).
“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,” said Macdonald.
He explained that 82% of total compensation for top CEOs is made up of variable compensation such as 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,” Macdonald added.
Government help
The report reveals that of these CEOs, 30 headed companies that received the Canada Emergency Wage Subsidy, 14 saw their bonuses changed to protect them from the impact of COVID-19, and five experienced both.
The CCPA report, Another Year in Paradise: CEO Pay in 2020, suggests several policy actions to help address income inequality in Canada:
- 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.
The full report is available at policyalternatives.ca
