Minutes before lunchtime on the first working day of the year, Canada’s 100 highest paid chief executive officers had already earned more than the average Canadian will earn in all of 2017, according to a new report.



CEO earnings in Canada – which rank among the highest in the world relative to the average worker – have soared to record levels in recent years, with the top 100 CEOs taking home an average of C$9.5m ($7m) in 2015, an analysis by the Canadian Centre for Policy Alternatives, an Ottawa-based thinktank, showed. Their compensation is now 193 times that of the average industrial wage in the country.

“Sadly, I’m not really surprised by the findings at all,” said Hugh Mackenzie, the author of the report. The executives’ pay has proven to be resilient, growing some 7% over 2014 figures even as the Canadian economy shrank.

The findings offer a window into growing income inequality in the country, said Mackenzie. In 1995, the thinktank tracked 50 of Canada’s highest-paid CEOs and found they made around 85 times the average income. By 2015, this same cohort was making 290 times the average Canadian income of C$49,510. “Not only are these high incomes, but they are incomes that demonstrably have grown significantly relative to the incomes of average people.”

When adjusted for inflation, the average income of the top 100 CEO’s has grown by 99% since 1998, compared to 9% for the average Canadian.

Research suggests there is little link between the soaring earnings and better company performance. Instead Mackenzie pointed to stock market-based forms of compensation, arguing that they keep executives transfixed on what is happening to their bottom line in the short term and encourage moves such as mass layoffs to boost shares of the company. “I think its fair to say that we are collectively paying the price for the short-term focus of corporate decision-making,” said Mackenzie. “We just have a fundamentally broken system for establishing executive compensation.”

The thinktank, which has tracked CEO compensation in Canada for the past decade, used information from companies listed on the Toronto stock exchange to compile the report. Earnings reflect compensation that ranges from base pay to bonuses as well as grants of shares and stock options.

Just two women made the list. The 100 listed include five named Mark or Marc and another five named Michael. “It’s a very clubby, white Anglo-Saxon Protestant male world,” said Mackenzie. “It doesn’t look like Canadian society at all.”

At the top of the list sits Michael Pearson of Valeant Pharmaceuticals, who in 2015 earned C$182m – nearly seven times that of the next CEO on the list. “Pretty much every year there’s a few people who are sticking out at the top end,” said Mackenzie. Recently the company has been plagued by a series of problems, from accounting issues to reports of a probe by US prosecutors. Pearson stepped down in early 2016.

Data from the OECD regularly suggests that Canada, along with the US and Britain, rank among the countries with the most extreme gap between CEO’s and the average worker.

Many in Canada point to the US – where the gap is most extreme, with the top 500 CEOs earning 340 times the average worker’s wage – and fears over brain drain to explain the pressure to ensure executives are well remunerated. Mackenzie, however, said research suggests it is relatively rare for executives to cross the Canada-US border in search of jobs.