At the beginning of the year, a study by the Canadian Centre for Policy Alternatives reported on the salaries of the 100 highest paid Canadian CEOs. According to their calculations, at exactly 1:11 pm on January 2, a majority of them had already pocketed what the average Canadian earns in a full year.
The new study from the Canadian Centre for Policy Alternatives (CCPA) confirms a very current trend. The salary of the highest paid CEOs is increasing dramatically year over year. In 2012, the 100 highest paid chief executives in Canada were paid 7.96 million dollars while the average annual salary in the country amounted to $46,634.
Growing Gaps
Between 1998 and 2012, the average salary of Canadian workers increased 6% while that of the 100 highest paid CEOs increased 73%, adjusting for the rate of inflation. In 2012, chief executives of major Canadian corporations earned 171 times more than people who work for the average wage. This gap has only increased since in 1998 the 100 highest paid CEOs earned 105 times the average salary.
Also according to the CCPA, the best paid company director in Canada in 2012 was Hunter Harrison, the CEO of Canadian Pacific. Combining his base salary, shares, bonuses and various benefits, he reached 49.1 million dollars. He is followed by James C. Smith of Thomson Reuters ($18.8M) and by John Manzoni, former boss of Talisman Energy ($18.67M). In addition, three women are on the list of the 100 highest paid CEOs in Canada, although only one appeared on it last year: Linda Hasenfratz of Linamar ($7M), Dawn Farrell of Transalta ($5.6M) and Nancy Soutern of ATCO ($4.3M).
The impressive rise in CEOs salaries is partly explained by the granting of shares and options. In 2012, allotment of shares was evaluated at 2.87 million on average and of options at 2.17 million.
Initiatives to limit abuse
Despite pressure from shareholders, politicians, media and civil society to put an end to the abuse, compensation of the CEOs of large companies continues to grow. Nonetheless, there are some initiatives. In Canada, the Wagemark Foundation has designed a standard for the ratio between compensation of the boss and that of simple workers. It offers a certification for companies where the wage gap between the CEO and the employee at the bottom of the scale is below the bar of 8 to 1.