Canada’s 100 highest-paid CEOs had a very lucrative year in 2020, number two in compensation, although the COVID-19 pandemic has left the country with its worst economic downturn since the Great Depression .
“Even though the pandemic has been a pretty bad year for most Canadians, especially when it comes to unemployment, it really hasn’t been so bad for Canada’s richest CEOs,” said David Macdonald, Senior Economist at the Canadian Center for Policy Alternatives.
Mr. Macdonald is the author of a report released Tuesday that examines the amounts earned by the 100 highest-paid bosses of listed companies in 2020. According to the report, as of noon Tuesday, the average CEO of these companies would already have earned what the average Canadian worker will earn throughout 2022.
In 2020, as many Canadians saw their hours cut or lost their jobs during repeated lockdowns and forced shutdowns, the 100 highest-paid bosses of publicly traded companies made an average of $ 10.9 million. This represents a decrease from the record 11.8 million in 2018, but an increase of $ 95,000 from 2019.
According to Mr. Macdonald, the fact that big bosses received the second highest salary on record is “quite a feat” since the pandemic has proved quite damaging for many of the companies they run.
Over 82% of average compensation came from bonuses, particularly in cash or stock options. According to the economist, companies had to be creative in their calculations to ensure that the poor performance observed during the pandemic did not affect the remuneration of their bosses.
“It only happens in bad times. When the going gets tough for the business, in many cases CEOs are protected. When things are going well for the business, there is no limit. “
Macdonald said CEOs often justify their bonuses for their exceptional work, but he pointed out that half of the bosses who got bonuses in 2020 either ran companies that received government assistance, such as the Wage Subsidy. emergency services, or had obtained a bonus only because of a revision of the formula.
“I think that really illustrates the failure of the idea that compensation is somehow merit-based,” he said.
Substantial gap
The highest-paid CEOs earned 191 times more than the average worker in 2020, down from the 202 multiplier for 2019. It is also the smallest gap in six years.
This narrowing of the gap is not, however, attributable to increases in workers’ wages. In fact, explained the economist, if the average income of workers rose in 2020, it is rather because several employees among the lowest paid were laid off, which excluded them from the portrait when calculating medium.