The income gap between Canada’s top executives and the average worker has reached a record high, according to a new report from the Canadian Centre for Policy Alternatives (CCPA).
The think tank’s annual report on executive pay in Canada found the country’s 100 highest-paid CEOs made an average of $10.4 million in 2016. That’s 209 times the average income of $49,738, and it marks the first time in the 11 years the CCPA has been tracking the ratio that it’s surpassed 200:1.
By 10:57 a.m. on Jan. 2, the top-paid CEOs will have already earned the average worker’s annual salary, the report says.
Average worker pay rose 0.5% in 2016, marking a decrease when inflation is taken into account, the report says, while top CEOs saw an 8% increase. It was the first time the average pay of top CEOs surpassed the $10-million mark.
“Taking a historical perspective, CEO pay is moving further away from a simple salary and toward all-out incentives,” the report says. “The base salary made up 14% of total compensation on average in 2008 and 11% in 2016. And as stock market values recovered post-slump, so has the stock incentive portion [of] a CEO’s ever-growing pay.”
The CCPA calls for tax reform to rein in executive pay, including elimination of the capital gains partial inclusion on any share-based compensation granted to executives.
“This would have the double-benefit of increasing tax revenues, which could be put towards social programs that help everyone while reducing inequality, and improving CEO performance, which is currently skewed by the prevalence of stocks in overall compensation,” the report says.
Read the full report here.