By the time most Canadians return home from work on the first working day of the year, Canada’s top executives already have an average worker’s salary – 53,482 – according to new research from the Canadian Center for Policy Alternatives (CCPA).
An hour later than the previous year, the average highest-paid CEO would have earned that average return by 11:17 a.m. Monday, the report said. In 2019, the Canadian average CEO earned 202 times more than the average worker in the same year, 227 times less than the previous year.
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“Many of these CEOs have a real gold mattress and they have seen outrageous pay over the years, which will cushion them and their wealth in a sense, but many of them will see an increase in their salaries because their role played out so well during epidemics,” Said David McDonald, a senior economist at CCPA.
According to McDonald’s, most CEOs are not paid, but are paid in bonuses, which makes it impossible to calculate how much they have earned in the most recent year. About $ 82 percent of this year’s top CEO revenue came from bonuses of $ 10.8 million.
Although research has found that the pay gap has narrowed slightly compared to the previous year, McDonald said changes in the administrative pay structure should definitely be made, especially considering the financial difficulties caused by the spread of the corona virus epidemic.
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One-third of the top 100 CEOs of 2019 ran companies that applied for and received pay support through the federal government’s Canada Emergency Pay Grant (CEWS) by 2020, while half of those 100 were expected to retain their compensation or the stock market See an increase during infections due to the boom.
“I still don’t think there’s any way we can avoid it, it’s not built into the rules like it’s in other countries like the Netherlands or Spain, where you can pay shareholders and management bonuses at the same time. I get a version of the wage subsidy,” McDonald said.
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“But we can enforce those rules, we do not yet, so I think I can basically guarantee that we are going to see a massive administrative bonus at the same time as paying the salaries of federal agencies.”
McDonald’s research found that about 15 percent of those earning $ 17 an hour work less, and by July the “highest paid” workers will have fully recovered.
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According to the Fraser Institute’s 2020 report, CEO pay has increased in recent years as competition in skills and industry has increased.
“The best business leaders in the world, like the best professional athletes and entertainers, are in limited supply, while demand is high globally, so the compensation they receive reflects that,” the report’s editor, Vincent Keloso, wrote in a statement.
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According to Keloso, many comparisons in CEO CEO bonuses are due to the fact that the gap between CEO and labor pay in Canada is “exaggerated”. Citing the Globe and Mail survey, which found that only 15 of the top 100 CEOs were on the list between 2007 and 2017, Keloso argued that higher pay was justified due to higher executive turnover.
McDonald, on the other hand, argues that in view of the economic turmoil of the epidemic, many changes need to be made in Canadian tax and wage policy – the federal government restricts CEWS only to companies that do not pay management bonuses. Avoiding it from companies that significantly increase executive salary.
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“So far the argument is that companies use pay subsidies for employees, they are, but the problem is that companies can’t reward executives when we pay the payroll, and that’s going to happen if that condition is not met,” he said.
That aside, McDonald suggested removing administrative tax breaks, introducing new margin tax rates on extreme incomes, and increasing the tax rate on high-income earners during epidemics to close the gap.
“It’s one of the places where they have to look at revenue, especially for people who have performed well since the epidemic, and it’s not bad for everyone – a lot of these CEOs will come out as a result of the epidemic, and there are people who need to be asked to pay a little more. have to do. “
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