theglobeandmail.com
Canada's Top CEOs Earned $13.2 Million on Average in 2023
In 2023, Canada's 100 highest-paid CEOs averaged $13.2 million in compensation, 210 times the average worker's income, down from record highs but still significantly above historical averages; factors include lower 2023 profits and increased worker wages.
- What were the average CEO compensation and the CEO-to-worker income ratio in 2023, and what factors contributed to the changes compared to previous years?
- In 2023, Canada's top 100 CEOs averaged $13.2 million in compensation, a decrease from record highs in 2021 and 2022 but still significantly above historical averages. This equates to approximately 210 times the average Canadian worker's income, a widening gap from 104 times in 1998. The highest earner received $68.5 million.
- How does the compensation structure of these CEOs contribute to the income gap, and what are the implications of the methods used to pay these individuals?
- The decline in CEO pay is attributed to lower 2023 profits and increased worker wages following inflation. However, the substantial disparity between CEO and worker compensation persists, amplified by various compensation structures favoring share-based awards and bonuses that aren't always performance-based. The average CEO earned the equivalent of an average worker's annual income by January 2nd.
- What policy recommendations are suggested to address the income inequality highlighted in the report, and what are the potential impacts and challenges of those recommendations?
- Future implications include potential policy changes to mitigate the widening income gap. A proposed wealth tax on individuals worth over $10 million could generate $32 billion annually, and raising top marginal tax brackets (historically higher) could also help. The prevalence of internal promotions for CEOs challenges the argument that extreme compensation is necessary for attracting talent.
Cognitive Concepts
Framing Bias
The article frames the issue primarily around the significant gap between CEO and worker pay, emphasizing the vast difference in compensation. The headline and introduction immediately highlight the high average CEO earnings, setting a tone of criticism. While the article does mention positive developments like increased worker wages, these are presented as secondary to the central theme of excessive CEO pay. The sequencing of information, leading with the high CEO salaries and the quick calculation of how long it takes to earn the average annual income, underscores this framing bias.
Language Bias
The language used is generally neutral but leans towards critical. Terms like "insane pay levels," "vast difference," and "excessive CEO pay" carry negative connotations. While these phrases accurately reflect the data presented, they contribute to an overall tone of condemnation. The use of the phrase "It's still well up from where it has stood historically" subtly reinforces the negative framing by highlighting the persistence of high CEO pay. More neutral phrasing could be used, such as "CEO compensation remains significantly above historical levels.
Bias by Omission
The article focuses heavily on CEO compensation and the gap between CEO and worker pay, but omits discussion of the overall economic performance of the companies involved. While the decline in profits is mentioned, a deeper analysis of factors influencing company success or failure beyond CEO compensation would provide a more complete picture. Additionally, the article does not explore the potential benefits of high CEO compensation, such as attracting and retaining top talent, although this is briefly addressed and dismissed near the end. The specific skills and responsibilities of these CEOs are not examined. The counter-argument that higher compensation is needed to attract top talent is presented and then dismissed without much detailed exploration.
False Dichotomy
The article presents a somewhat simplistic dichotomy between CEO compensation and worker pay, suggesting a direct correlation between high CEO pay and income inequality. It doesn't fully explore the complexities of executive compensation, such as the role of performance-based incentives or the long-term impact of stock-based awards. The narrative implies a necessary trade-off between high CEO pay and fair worker wages, while in reality the relationship may be more nuanced.
Gender Bias
The article notes the underrepresentation of women among the top 100 highest-paid CEOs. While acknowledging this disparity, the analysis is limited. The article points out that the three women on the list earned more on average than the CEOs named Scott or Michael, but does not explore the underlying reasons for the gender imbalance. More detailed analysis of gender representation in the broader context of corporate leadership is missing.
Sustainable Development Goals
The article highlights the significant pay gap between CEOs and average Canadian workers, with CEOs earning 210 times more in 2023. This vast disparity contradicts SDG 10, which aims to reduce inequality within and among countries. The fact that CEO compensation is largely driven by non-salary components like stock options and share awards further exacerbates the issue, making it harder to address through traditional income tax measures. Policy changes aimed at narrowing this gap, such as increased capital gains tax and capping stock option deductions, are mentioned but their effectiveness remains to be seen. The report's recommendation for a wealth tax underscores the severity of the inequality.