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Canada’s CEOs couldn’t get much richer, or could they?

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Tessara Smith, PayScale

Cats out of the bag – CEO’s make some of the largest salaries of all the employees in Canada’s workforce, and lately it seems that they are raking in an absurd amount of cash. In 2012, the top one hundred CEO’s earned an average of a little more than $7.9 million; each. To put this in perspective, that kind of money has the potential to eliminate the debt of any one of the provinces: Saskatchewan, Manitoba, Newfoundland and Labrador, New Brunswick, Nova Scotia, or Prince Edward Island. 

Certainly it is not surprising that heads of large companies make a considerable annual salary, but you would think that in the midst of recovering from a recession even Canada’s CEO’s would feel the pinch in their wallets. While most have spent the last five years attempting to recuperate their careers and companies, these corporate tycoons seem to keep coasting along.

The average salary of any given Canadian citizen is about $46,634, which means that Canada’s top CEO’s are earning approximately one hundred and seventy one times that every year. Most workers put tremendous amounts of hard work and dedication into their jobs just to make ends meet for their families while CEO’s have already made their annual salary by lunch time. Talk about a slap in the face to the middle and lower level working classes of Canada. Full time minimum wage workers are even worse off, only making around $20,989 each year. This nonsensical wage gap has caused a lot of upset among dedicated employees in all industries. Still, CEO’s have always been paid the most money across the board, so why all the fuss?

Well, CEO’s may be cashing in, but many of the executives sitting below them are barely seeing a dime of the company’s revenue in comparison to their superiors. In some companies this problem is “the elephant in the room” when upper level employees are the ones who are pulling all the weight. When taking a look at CEO to worker pay ratios, more often than not, the numbers are simply not justified. Politicians, media spectators, and business specialists alike are bringing into question the role of the CEO and if it is truly deserving of a massive pay day. Everyone can agree that the bottom line is that there is an apparent lack of any relationship between CEO compensation and measurable corporate performance. However, this is not exactly news in the business world. CEO’s are the head honchos of the corporations and with this comes a substantial salary. Who cares?

Shareholders, that’s who, and they are starting to push for the public disclosure of CEO’s stock options. In particular, CEO’s working in the financial services sector are coming under harsh scrutiny. The demand of shareholders to have more control over their investments coupled with the open criticism of CEO’s, may just be the beginning of some major corporate reforms. Although it’s not realistic to expect that the wage gap between CEO’s and the rest of Canada’s work force will start to close anytime soon, hopefully more employees can begin to reap the benefits of their companies’ success.

Want to see what's happening now with wages in Canada? Get a free PayScale Index Report for Canada to see all the trends.

2 Comments

  1. 2 Jamie 24 Jul

    the interesting thing about most banks in canada is that they don't promote from the inside. if you check the resume of any VP and higher level managers at any Canadian Bank you will notice that most of them don't have a tenure at the bank itself...they have all come from outside. So they have no loyalty to their employees. There is a clear line between the "ELITE" and the "non ELITE" in all Canadian banks. And it is one of the most sickening display of "entitlement" in Canada or anywhere else in the world!

    Also note that the private debt that is being created by Canadian Banks right now is well over 200% of the income anyone can afford. So in fact the CEOs or the Banks will not take any responsibility when fit hits the shan when it comes to debt. In fact, it will be taxpayers who will be paying for the debt incurred by the bad decisions being made by these CEOs right now when it comes to management of their banks. 

    Canadian Bank CEOs will be blameless when shareholders are squeezed on both dividends and taxes soon enough. Yet...they will come out the winner with more money you can imagine.

    I know for a fact that the CEO of one of the 5 banks actually uses the discount entity so he doesn't have to pay banking fees for his transactions and he makes $10MM in cash year + options + whatever else. I find this cheapness very enlightening and true to the character of these CEOs. 

    These CEOs do not view people below a certain level as human beings. They do not invest in education, technology (one bank still used Office 2003 in their eChannel department), health, etc. Canadian banks make money because they squeeze not only their employees but also their customers for every penny and most of the management considers itself too elite to even "talk" to its own employees in public. 

    It is the most extreme case of imperialism I have ever witnessed in business. And it is all tolerated by Canadians...

    Sad and pathetic!

  2. 1 ginge 23 Jul

    i clean houses for a living. The people i work for are always trying to get me to work longer for less. When they move to a bigger house I am still expected to clean the bigger area for the same money. And they don't care that when they go for a vacation which they only let me know just before  they leave i am left short on work. I am a human being, please remember that.

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