CEO-to-worker pay gap reaches new at all-time high, finds report
The pay gap between the top executives and the average workers in Canada was at its widest in the year 2022, according to a recent report from the Canadian Centre for Policy Alternatives (CCPA).
Canada’s top 100 CEOs in 2022 made 246 times more than the average worker, according to the report. That’s an all-time high, said CCPA.
While these executives were paid an average of $14.9 million in 2022, the average worker got an average of $60,600 that year, found the report based on data from 234 companies.
Just in the second day of 2024, these top CEOs have already made what the average worker would earn for the entire year, noted David Macdonald, senior economist with the CCPA.
“The average CEO collects $7,162 an hour. It takes just over eight hours in the new year for the top 100 CEOs to clock in an average of $60,600 – what the average worker in Canada makes in an entire year. By 9:27 a.m. on January 2, 2023, Canada’s top CEOs would have already made $60,600 while the average Canadian worker will toil all year long to earn that amount of pay.”
In 2021, the highest paid Canadian CEOs took home an average of $14.3 million, and they made 243 times more than the average employee, according to a previous CCPA report. In 2020, the top CEOs made $10.9 million, 191 times more than the average worker did, CCPA previously noted.
“While the wave of inflation has been crashing down hard on regular Canadians, Canada’s 100 highest-paid CEOs have been riding it to another record-smashing year. Inflation presented a-once-in-a-lifetime chance for corporate Canada to jack up prices and pad their profit margins,” said Macdonald.
The average CEO collects $7,162 an hour, and the minimum CEO wage for the top 100 is $3,220 an hour.
The top 100 CEOs, on the other hand, saw an average raise of $623,000, or 4.4 per cent, going from $14.3 million in 2021 to $14.9 million in 2022. Meanwhile, for the average worker, pay rose from $58,800 in 2021 to $60,600 in 2022.
Thousands of workers held strikes in 2023, calling for higher pay and better working conditions, among others.
‘Extreme pay packages’
Bonuses drive CEO pay, said Macdonald, as the salary part of their pay remains relatively constant, at around $1 million a year. In 2022, it stood at $1.2 million.
“As bonuses keep rising, the million-dollar salary becomes increasingly irrelevant,” he said.
The senior economist lists four recommendations to address “these extreme pay packages and the special types of income they use”:
- Create new top income tax brackets.
- Remove corporate deductibility of pay packages over a million dollars.
- Introduce a wealth tax.
- Increase the capital gains inclusion rate.
