100 best-paid CEOs earn 155 times more than average Canadian
Canada’s best-paid 100 CEOs enjoyed earnings 155 times higher than the average Canadian income earner in 2009, according to a study by the Canadian Centre for Policy Alternatives (CCPA).
These CEOs received an average of $6.6 million during the lowest period of the recession — compared to the total average Canadian income of $42,988 — found the study, Recession-Proof.
“At this rate of reward, this handful of elite CEOs pocket the equivalent of the average Canadian wage by 2:30 pm on Jan. 3 — the first working day of the year,” said Hugh Mackenzie, author of the study and a CCPA research associate.
Back in 1998, the best-paid 100 CEOs pocketed an average of 104 times more than the average Canadian wage earner, compared to 155 times more in 2009, said the study.
“Even that extraordinary number understates the real story,” said Mackenzie. “Thanks to a change in corporate reporting introduced in 2008, we only have a conservative statistical estimate of the stock options that make up about one-third of CEOs’ 2009 pay. The public will never know how much most of these CEOs actually got paid in 2009.”
These CEOs also have $1.3 billion of stock options they haven’t yet cashed in, he said, which is about $2 in future income for every $1 they declared in 2009.
When the CEOs decide to exercise those stock options, Canadians will subsidize that bonus with an estimated average of $360 million in foregone taxes, said the CCPA study, since stock options are taxed at a lower rate, as if they are capital gains. As a result, that “expensive and unfair loophole” should be removed, said Mackenzie.