In a new survey sure to draw a few Guy Fawkes-masked grins, Canada placed second when it comes to wage discrepancy between the top brass and the standard worker salary.
On average, Canadian CEOs earned 206 times as much as their worker counterpart, according to data from the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the largest federation of unions in the U.S.
While the average Canadian employee earned about US$42,253 in 2012, the CEO made about US$8.7 million says the AFL-CIO.
Exec earnings from the study are slightly inflated when contrasted with a review of pay at Canada’s 100 largest companies released in June by consulting firm Global Governance Advisors. The CEO-focused study found a median compensation of C$5.6-million last year, an 11 per cent increase from 2012 and another step up the ladder after salaries dropped in the aftermath of the financial downturn in 2008 and 2009.
Prior to the recession, the median salary for a CEO was C$5.8 million.
But an increasing shift towards say on pay – the policy of letting major shareholders vote on company execs pay – is helping to ensure captains of industry are making the big bucks deservedly.
The key, it seems, is tethering exec salaries to stock performance. It doesn’t altogether curb unscrupulous business big wigs ability to slip a little extra into their pockets but it does foster more accountability.
Despite say on pay votes not being mandatory in Canada, 64 per cent of companies held a vote this year, a notch higher than 57 per cent in 2013 according to another review by GGA.
But even with the votes on salaries and digestible average payouts, the discrepancies are a little harder to swallow when you actually take a look at what the individuals leading Canada’s publicly traded companies are earning.
Gerry Schwartz, CEO of Toronto-based private equity investment firm and holding company Onex Corporation made a staggering US$130 million in 2013, including a stock-option grant worth nearly $60 million. And then there’s the other fund he doesn’t have to directly disclose to shareholder – the C$258 million in 2013 he earned by exercising options he already has, according to other securities filings.
So the question then becomes, where’s the wage ceiling?