11) CEOs STILL RIDING THE HIGH INCOME GRAVY TRAIN
Excerpts from the new CCPA report, “Throwing Money at the Problem: 10 Years of Executive Compensation”
Over the past 10 years, compensation for
Total compensation for
Although public outrage over exorbitantly high CEO pay continues unabated,
especially since the Great Recession of 2008-09, CEO pay in
This year is no different:
A review of CEO compensation in
... Every January since 2007, the Canadian Centre for Policy Alternatives has
highlighted one of the most visible symbols of income inequality in
The challenge we faced was how to express the astronomical discrepancy in terms that would connect to people’s everyday life experience. This is not a unique problem — studies of income inequality have always struggled to find ways to communicate vast differences in income and wealth...
Because we were comparing income from employment, the obvious way to locate a CEO’s pay in everyday experience was to ask and answer the question: how long would a CEO have to work to take home the same pay as the average Canadian received in a year?
The answer — consistent over the years — has been stunning. Like clockwork, on the first working day of every year, the average of the 100 highest paid CEOs in Canada already pocket what it takes the average Canadian an entire year to earn. Usually by lunchtime.
This year is no different. Based on CEO pay data for 2015, reported in 2016, and the Statistics Canada average industrial wage for 2015, the average of the 100 highest paid CEOs in Canada will have surpassed the average Canadian’s earnings before noon (11:47 a.m.) on the first working day of the year, January 3.
In 2015, the 100 highest paid CEOs in
The gap is even bigger when you compare CEO pay to minimum wage earners’ pay: the 100 highest paid CEOs would match the Canadian weighted average 2016 minimum wage — $11.18 per hour or $23,256 annually — by just after 2:00 p.m. January 2. The average CEO in this elite group makes as much as 410 minimum wage workers...
Of that $9.545 million average CEO pay: $1.1 million was base pay; $1.8 million was bonus; $4.3 million was grants of shares; $1.5 million was the value of grants of stock options; $316,000 represented the value of increased pension earned; and $530,000 was “other” sources of income such as benefits, perks, etc.
Forty-seven of the top 100 CEOs had a defined benefit pension plan, with an average pension payable at age 65 of just under $1.1 million.
Even that doesn’t fully capture the income earned by these CEOs. Seventy-nine of the top 100 CEOs owned shares in their companies that paid dividends: those 79 received an average of $1.625 million in dividends.
Although the CCPA began compiling data on CEO earnings with the 2005 pay year, changes in the basis for compensation reporting required under accounting rules beginning in 2008 mean that consistent comparisons over time are possible only after that date...
If you think it’s always been this way, think again. In 1998, the average of the top 100 CEOs in Canadian publicly listed companies was able to get by with an income only 103 times that of the average Canadian. The gap between the average top 100 CEO’s pay and that of the average Canadian has increased by 179 per cent since 1998 — from 3,390,367 to 9,472,938.
Longer term, we have data for the top 50 going back to 1995. In 1995, the top 50 CEOs received 85 times the average Canadian income; in 2015, the average of the top 50 received 290 times the average Canadian income.
(The above article is from the January 1-31, 2017, issue of