Canadian executives paid the most in 2014

In the pantheon of big pay, the largesse is distributed in no end of lovely ways. There are bonuses and base salaries, of course, shared-base rewards as well as options. There is payment for advisory works and compensation to “make-whole”, and most tantalizing of all, there is “other”, a seemingly bottomless trough that can include niceties such as commuting in the company jet, membership in the toniest golf and racket clubs and on top of it, money to move, or stay, or whatever else one can think of to negotiate.

Amid all of this lucre, it can be tough to discern who’s actually making the most in Canada’s executive ranks. And only adding to the vagaries is that the full 2013 figure won’t be released for several months to come. Still, from the disclosures available to date, the kings of the hill are plain to see.

As usual, most hailed from the financial sector, for after all, who has a better appreciation for big numbers than a banker? Don Guloien, CEO of Manulife Financial, saw his salary and bonus rise 50% to $3.9-million, according a 2013 Globe and Mail executive compensation report. A smaller bump, but bigger total, was earned by RBC CEO Gordon Nixon, who pulled in $4.4-million, a 35% jump from his salary and bonus in 2012.

If commercial banking was good, the private equity scene was even better. Ask Onex founder Gerald Schwartz who scored the year’s biggest bonus, by far, adding $12 million on top of his $1.3 million-salary. That dwarfs the $8.1 million bonus Magna International CEO Donald Walker made do with, according the Globe’s report.

As for biggest financial reward overall, that would go to Walker’s honorary chairman, Frank Stronach, who pulled in US$47.3 million through a combination of management fees and profit sharing. Consistently outstanding in his field, you never have to search far to find Stronach’s name whenever a list of top-paid execs is assembled.

Of course, all of the above combined, pale in comparison to the pot of treasure for W. Galen Weston, whose holdings in George Weston Ltd topped $5.7-billion last year. Yet, to be fair, that’s not his earnings for the year, nor is it an amount he could reasonably access. It’s speaks simply to his stake in the business.

In terms of clear, straightforward ‘this is what I get paid’, the reigning champ in Canada remains Hunter Harrison, CEO of Canadian Pacific Railways, who earned $49.2 million last year, which included $1 million in salary, a $16-million pension guarantee and “make-whole payments” of $18.6 million to compensate Harrison for tossing his restricted shares when he joined the company.

The remaining $13.6 million that made up his total last year, falls in the coveted ‘other’ category, but is believed to include $10 million in options awards, $1.3 million in incentives, a housing allowance of $46,341 (for how else could he pay for accommodation?) as well as $277,000 for use of CP’s jet. The company prefers he uses the jet for personal reasons, according to a Bloomberg report.
Harrison was well ahead of first runner-up, Jim Smith, who made $18.8 million at Thomson Reuters as he readied the company for massive lay-offs.

That work can pay well, and indeed, Harrison’s efforts in this realm have earned him praise for being worth every penny of his gargantuan compensation. In November, Canadian Business magazine named him the ‘Top Turnaround CEO of the Year” for transformative reshaping of the least efficient North American large railway, selling off locomotives and railcars and promising to eliminate 4,500 jobs by 2016. The cost-cutting has helped drive CP’s all-important operating ratio – the percentage spent per dollar earned – from an industry high of 80 per cent to below 66 per cent, a record low for the railway.

It was the hope of those kinds of results that led top hedge fund manager Bill Ackman to lure the 69-year-old out of retirement for the job. Harrison told the Globe and Mail that his initial response to Ackman was “I don’t think you can afford me”, to which the billionaire financier replied, “Don’t kid yourself”

What does a Tennessean railroad boss do with a $49.2-million? In Harrison’s case at least some of it goes to the ponies, more specifically, his Double H show-jumping farms in Florida and Connecticut, the latter of which spreads out over 87 acres and includes 15 paddocks and a grand prix equestrian field.

While there are no losers in a line up like this, at least not amongst the executives, it seems only apt that Thorsten Heins faced potentially the biggest disappointment. The US$55.6-million he stood to gain if BlackBerry was acquired and he lost his job disappeared when Fairfax Financial decided to walk away. Heins got fired anyway, with only $22-million to ease the pain.