Canada’s top 100 CEOs saw their incomes rise in 2020, even as the pandemic wreaked havoc on the Canadian economy, according to an annual report released on Tuesday.
Their salary in the first full year of COVID-19 averaged $ 10.9 million each, up $ 95,000 each since 2019.
“As a result, these 100 CEOs now earn, on average, 191 times more than the average salary of workers in Canada,” according to the report titled: Another Year in Paradise, CEO pay in 2020.
The data is compiled annually by the Canadian Center for Policy Alternatives (CCPA).
“By the lunch hour on the first working day of 2022, Jan. 4, Canada’s highest-paid CEOs will already have racked up the same amount of salary it takes the average worker all year round to accumulate,” indicates the report.
Highest-paid CEO in Canada in 2020 was David Klein, who officially took over Canopy Growth Corp. in January 2020, according to the report. The company’s shares were then trading at around $ 31 per share. By the end of that year, it was trading about a dollar more. Klein’s total compensation during this period was $ 45.3 million, of which $ 281,715 was salary; $ 10 million in stock-based awards and $ 33.3 million in option-based awards, according to CCPA analysis.
Canopy Growth Corp., which produces, distributes and sells medical and recreational cannabis, closed at $ 11.04 a share on the Toronto Stock Exchange on Monday.
“One of the problems we’ve seen with income inequality is that when the economy is bad it’s often only low-wage workers who suffer, it’s not CEOs who suffer, and this has been really highlighted by the pandemic and the data for 2020, ”said David Macdonald, senior economist at the CCAC.
While the income earned by Canadian CEOs is theoretically based on merit, the report found that among the top 100 CEOs, 30 run companies that received the Canada Emergency Wage Subsidy (CUS), 14 saw their premium structure changed to protect them from the impact of COVID-19 and five suffered both.
“The SSUC was supposed to go to companies that saw their revenues drop dramatically during the worst of the pandemic, but some companies with the 100 highest paid CEOs in Canada continued to pay their CEOs extraordinary amounts while receiving the SSUC,” according to the report.
“The philosophical rationale for extreme bonuses – whether merit-based – is thin ice. Executive compensation is not variable or merit-based, but rather part of the culture of senior executives.
Also according to the report, there was no requirement that the SSUC be used for workers’ wages. The rules were changed in June 2021 to prevent companies that pay their executives more in 2019 from receiving the grant.
In a statement to the Star, Canopy Growth Corp. said Klein’s package was negotiated in 2019, before the pandemic began. As part of the deal, he was compensated by Canopy for stock-based compensation he lost when he left his previous job.
According to the CCPA report, the gap between the average worker and the highest-paid CEO narrowed in 2020, but only because about half of all workers who are paid $ 17 an hour or less have lost their jobs or the majority of their working hours in the first months of the pandemic, according to the report.
Macdonald said progress has been made: Before July 2021, only 50% of the value of stock options was considered taxable. This has now been capped at the first $ 200,000 of stock options.
The second highest paid CEO in Canada is José Cil of Restaurant Brands International, which owns and operates Burger King and Tim Hortons. His total compensation in 2020 was just under $ 27 million, including nearly $ 24 million in stocks.
The report recommends action to close the gap between CEO salaries and employee salaries by capping corporate deductions allowed for executive compensation at $ 1 million. There is currently no cap. He also recommends making all income from stock options taxable – currently only half is taxable.
He also recommends a wealth tax for the ultra-rich, generally defined as a tax on those with net worth over $ 10 million.
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