Canada’s highest-paid CEOs earned average annual salary in 10 hours | Economic office

In 2023, the 100 president and CEOCEO Canada’s highest earners took home $13.2 million on average, 210 times more than the average worker. In the previous two years, this gap was greater: their average compensation was more than 240 times higher than that of employees in 2021 and 2022.

It continues to be a huge gap, but what has happened this year is that workers have seen increases in their wagesunderlines David Macdonald, author of the report and senior economist at Canadian Center for Policy AlternativesCCPA.

Indeed, in 2023, the average compensation of employees in the country, including overtime, increased by 6.6% in one year. This is good news for workershe said.

That year, corporate profits after taxes – which totaled $577 billion – fell by 3% compared to the record levels recorded in 2022. This decline in profits is reflected in the bonuses of senior executives, underlines the economist.

When we see a small decline in profits, we see a small decline in bonuses for president and CEOCEO.

Corporate profits continue to be very strong, but not as much as they were in 2021 and 2022he said.

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Impose a salary ratio?

Annie Boilard, human resources specialist, suggests implementing a maximum ratio between the highest salary and the lowest salary within a company.

For example, if the ratio is set to 60:1 and an employee in Ontario earns minimum wage (new window) – or $17.20 per hour, or $32,255 annually – the salary of the president and CEOCEO must not exceed $1,935,300.

It is always possible to pay much more president and CEOCEObut we will have to increase the remuneration of the lowest paid employee in the organization.

In the United States, publicly traded companies are required to report their pay ratios, but no limits have been set, she points out.

According to an analysis (new window) of the American Federation of Labor and the Congress of Industrial Organizations, the largest group of unions in the country, the president and CEOCEO in the United States earned on average 268 times more than workers in 2023.

The president and CEOCEO of Nu Skin Enterprisesan American beauty products company, earned more than 10,000 times the median salary of its employees.

Wage gaps still remain very high for several other well-known American companies, such as Abercrombie & Fitch (6076 times), Mattel (3220 times) and Coca-Cola (1799 times).

Taxing big fortunes

David Macdonald, you Canadian Center for Policy AlternativesCCPAwelcomes the efforts of the federal government to tax the richest more (new window). Last June, Ottawa increased the capital gains inclusion rate, which could bring in a significant amount of money from president and CEOCEO canadiens.

According to the report of Canadian Center for Policy AlternativesCCPAthe 100 highest-paid CEOs in the country own a combined $45.2 billion in stock in their respective companies. The 5 largest shareholders on this list alone hold almost all of this value, or 38.2 billion.

This gives us an idea of ​​the concentration of wealth in Canadaindicates the economist.

These 5 shareholders will therefore owe $829 million more in taxes due to this tax measure, according to the organization’s estimates.

The problem is that they are only going to pay that when they sell those shares, so if they wait for another government, which will cancel this change, maybe they will not have to pay those 800 million dollars moresays Mr. Macdonald.

The economist also notes that the proportion of remuneration of president and CEOCEO top earners from stock options have fallen by half since a federal measure targeting this loophole was passed in July 2021.

He continues to call for a wealth tax, which would generate new income annually, rather than waiting for the sale of stock securities, which can take years. This proposal, put forward by the federal New Democrats, does not have significant support from other parties in the House of Commons.