TORONTO, Jan. 3 /CNW/ - Canada's best-paid 100 CEOs breezed through the
worst of the recession with earnings 155 times higher than the average
Canadian income earner, says a new study by the Canadian Centre for
Policy Alternatives (CCPA).
The study, Recession-Proof, looks at 2009 compensation levels for Canada's best paid 100 CEOs and
finds they pocketed an average of $6.6 million during the darkest
period of the recession - a stark contrast from the total average
Canadian income of $42,988.
"At this rate of reward, this handful of elite CEOs pocket the
equivalent of the average Canadian wage by 2:30 pm on January 3 - the
first working day of the year," says the study's author and CCPA
Research Associate Hugh Mackenzie.
The study shows executive compensation in Canada wasn't always this
rich. 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
"Even that extraordinary number understates the real story," says
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.
"And that's only half the story. These CEOs are sitting on $1.3 billion
of stock options they haven't yet cashed in. That's about $2 in future
income for every $1 they declared in 2009."
When the CEOs decide to exercise those stock options, the study reveals
Canadians will subsidize that bonus with an estimated average of $360
million in foregone taxes, since stock options are taxed at a lower
rate, as if they are capital gains. Among Mackenzie's recommendations:
getting rid of that expensive and unfair loophole.
The study highlights the role that soaring executive compensation plays
in the dramatic growth in income inequality in Canada identified in a
recent CCPA study by Senior Economist Armine Yalnizyan. Yalnizyan found
that fully one third of all income growth in Canada in the past 20
years went to the richest 1% of Canadians.
Recession-Proof can be downloaded from the CCPA website at www.policyalternatives.ca.
SOURCE Canadian Centre for Policy Alternatives
For further information:
Trish Hennessy (416) 551-2059