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Canadian CEO pay soars to a new all-time high due to inflation
January 3, 2022
Canadian CEO pay soars to a new all-time high due to inflation: report
Ottawa — Canada’s 100 highest-paid CEOs broke every compensation record on the books in 2021, according to a new report by the Canadian Centre for Policy Alternatives (CCPA).
In Breakfast of Champions: CEO Pay in 2021, CCPA Senior Economist David Macdonald shows that those 100 CEOs, who are overwhelmingly male, got paid an average of $14.3 million in 2021, smashing the previous record of $11.8 million in 2018 and setting a new all-time high in our data series.
They now make 243 times more than the average worker wage in Canada, up considerably from the previous high of 227 times the average worker wage in 2018.
“If you measure this massive pay disparity in time, less than an hour after the first working day of the year begins, Canada’s highest-paid CEOs will have already made $58,800 or what it will take the average worker the entire year to make. That’s by 9:43 a.m. on January 3, 2023, to be precise,” says Macdonald. “You could call CEO pay the breakfast of champions.” While inflation hurts workers, it’s great for corporate profit that have hit historic highs. When profits go up, executive bonuses are driven way up. In 2021, variable compensation (bonuses) made up 83 per cent of the best-paid CEOs&isquo total compensation, up considerably from 69 per cent in 2008.
“We think of inflation as bad for everyone, but for CEOs it’s the gift that keeps on giving. Historically high profits based on historically high inflation mean historically high bonuses for CEOs,” Macdonald says. “When times are bad, like during the pandemic, CEO bonus formulas are altered to protect them; in good times, like 2021, the champagne never runs dry.”
This report proposes four policy solutions for governments to address this rampant income inequality between the rich and the rest of us through taxation measures that include:
Limiting corporate deductibility of compensation over $1 million
“Soaring CEO pay is going unchecked,” says Macdonald. “Taxation can be the check we need.”
Breakfast of Champions: CEO pay in 2021 is available at: policyalternatives.ca/publications/reports/breakfast-champions
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