OTTAWA—Canada’s 100 highest-paid CEOs again broke every compensation record on the books in 2022, according to a new report by the Canadian Centre for Policy Alternatives (CCPA).
In Canada’s New Gilded Age: CEO Pay in 2022, CCPA Senior Economist David Macdonald shows that those 100 CEOs, who are overwhelmingly male, got paid a whopping average of $14.9 million in 2022. This amount surpasses their previously record-breaking pay of $14.3 million in 2021 and sets a new all-time high in our data series.
They now make 246 times more than the average worker wage in Canada, besting even their previous high of 243 times the average worker wage in 2021.
“The top CEOs make $7,162 an hour and so it only takes a little over eight hours to make the $60,607 annual pay of the average worker. If we say that both get paid vacations, like New Year’s Day, then by Tuesday, January 2, 2024, at 9:27 a.m. those CEOs will have already gotten what the average worker makes in a year,” says Macdonald. “This is truly the hallmark of a new Gilded Age.”
To make matters worse for workers, inflation is pushing up costs and salaries are not keeping up. In 2022, the average worker in Canada got an average pay raise of $1,800, or three per cent. But, prices went up by 6.8 per cent in 2022, meaning workers took a real pay cut of almost four per cent compared to 2021.
The top 100 CEOs, on the other hand, saw an average pay raise of $623,000, or 4.4 per cent in 2022. The CEO raise was also less than inflation, but CEOs do not struggle to cover basic costs as many workers do.
Indeed, CEOs benefit from inflation because extreme CEO pay is linked to soaring corporate profits: It’s driven by bonuses, not salaries, and those bonuses are tied to company performance, like revenue and profits. In 2021 and 2022 as inflation soared, so did corporate profit margins. As a direct result, CEO bonus pay also hit all-time highs as companies profited from higher prices.
This report proposes that governments address the rampant income inequality between the rich and the rest of us through four taxation measures that both disincentivize extreme CEO compensation and redistribute CEOs’ extreme income to Canadians on the lower end of the income spectrum. They are:
- Creating new top income tax brackets
- Removing corporate tax deductibility of pay packages over a million dollars
- Introducing a wealth tax
- Increasing the capital gains inclusion rate
“CEO pay continues to soar without restraints,” says Macdonald. “Taxation can be the control we need.”
For more information and interviews please contact Amanda Klang, CCPA Senior Communications Specialist (Media & PR) at [email protected]