The income gap is growing big time.
In 2021, Canada’s 100 richest CEOs made on average $14.3 million. They now earn 243 times more than the average Canadian worker.
According to a report released in January by the Canadian Centre for Policy Alternatives (CCPA), executive compensation climbed to new heights in 2021. It smashed the previous record of $11.8 million in 2018 when the top 100 made a mere 227 times workers’ pay.
Topping the list as corporate Canada’s fattest cat is Philp Fayer, Chairman and CEO of the IT company Nuvei he earned $141 million. The lowest earning top-100 exec at $6.7 million is Tim Gitzel, president and CEO of Cameco Corp., a Saskaatchewan-based Uranium mining company.
While inflation is hurting most Canadians, corporations are posting record profits.
When corporations rake it in, top executives make hay.
“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,” CCPA senior economist David Macdonald said in a press release.
“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.”
In 2021, variable compensation (bonuses, stock options, etc.) made up 83 percent of the best-paid CEOs’ total compensation. That’s up from 69% in 2008.
Let’s put ballooning Canadian CEO compensation into perspective.
By the end of the first workday of the year, these mostly male execs will have already banked roughly $58,000. For many workers, it takes a year to earn that amount.
Canadian governments of any stripes have been happy to play ball with wealthy CEOs and keep them fat and happy.
“You could call CEO pay the breakfast of champions,” Macdonald said.
In its report, called Breakfast of Champions, the CCPA has some ideas for dealing with what it calls “this rampant income inequality between the rich and the rest of us ….”
There are four key recommendations.
- Introducing a wealth tax could net 10s of billions in new tax revenue
- Higher top marginal tax brackets could bring it back to taxation in the 1950s and 60s when it sat in the 70 – 80 percent range for the richest Canadians.
- Closing the capital gains inclusion rate loophole (a favourite of the rich) would double the tax paid by the wealthy.
- Limiting corporate deductibility of income above $1 million would generate nearly $200 million in additional federal corporate income tax revenue.
