|Banner Year for Canada's CEOs
Canada’s richest CEOs pocket the average Canadian wage of $40,237 by 9:04 a.m. January 2nd – before most Canadians have
booted up their computer for another year of work,” says Canadian Centre for Policy Alternatives (CCPA) Research Associate Hugh
The CCPA released a report on January 2, 2009 showing that the 100 highest paid CEO's at publicly traded corporations in Canada
earned an average of $10.4 million in total compensation in 2007, which was an average increase of 22%, from its $8.5 million
average in 2006.
This compared with an average pay hike of only 3.2% to $40,237 for the average Canadian worker during 2007.
"Compared with ordinary Canadians, whose wages have been stagnant for 30 years, Canada's economic downturn promises to hit
the masses far harder than the best paid 100 CEOs," Mackenzie said. "They have enjoyed a decade of record pay hikes and will
land on a softer cushion if they stumble from their lofty heights in the New Year."
The wage gap between the average Canadian worker and CEOs has been growing steadily over the past decade. In 2007,
Canada's top 50 CEOs earned 398 times more than the average worker, compared with 85 times in 1995.
MacKenzie said that between 1998 and 2007 the average compensation of top CEOs increased by 147%, adjusted for inflation.
This compared with a 3% decline in inflation-adjusted weekly wages for average Canadians and a 6% rise for those on the minimum
Bonuses and salaries paid to Canadian chief executives are expected to come under increased scrutiny in 2009 from shareholders
who have been burned by the decline in stock prices and as mounting pressure to slash CEO pay in the United States spills over
CEO pay in Canada has so far not come under as intense a spotlight as in the United States, but MacKenzie of the CCPA says that
Canadian shareholders are likely to take a closer look at the issue when companies hold their annual general meetings this year
amid a contracting domestic economy.
"To the extent that the meltdown in the market and the reaction to it in the United States creates new trends in compensation,
those trends will leak over to Canada," said MacKenzie.
|President & CEO pay at CN
Look specifically at the pay increases to the position of CEO at CN, Canada’s largest railway and the employer of the majority of our
CAW Council 4000 membership.
While Canadian National was still a Federal Crown Corporation in 1992, the year that Paul Tellier was appointed president of CN by
then Prime Minister Brian Mulroney (many labelled it a “patronage appointment”), the corporation’s president - which was the
equivalent of today’s CEO position - earned an annual salary of $345,000 plus expenses. For Tellier, that was more than twice the
$165,000 annually he received as a public servant.
CN allegedly gave its new president, Paul Tellier, a $432,000 interest-free loan to buy a house, of which $300,000 came from CN
and $132,000 from SRS or Supplemental Retirement Security. The loan was not guaranteed by a mortgage so that the deal would
not have to be made public. In return, the president signed an interim note and increased his individual life insurance by $300,000
payable to CN to guarantee his loan. Worse yet, while a $432,000 loan was allegedly made, the house was only assessed at
Tellier, who worked in government for more than a quarter of a century, immediately turned to privatize CN, a goal that was
ultimately reached in 1995. He knew that the benefits would be.
After the Federal Liberal government and Parliament allowed CN to become a private, publically traded company in 1995, Paul
Tellier, his titled now changed from president to Chief Executive Officer (CEO) of CN; saw his pay and benefits rise dramatically.
From 1995 to 1997, Paul Tellier's salary and bonuses grew by 108 percent, despite the fact that CN's profits (before special
charges) grew by just 17 percent! By the end of 1997, Paul Tellier owned 113,800 stock options (granted as part of his overall
compensation package), which at the time were worth $7.7 million dollars, and received salary and bonuses totalling $1.3 million
(which excludes the value of his stock options). This was the equivalent to the earnings of over 30 average CN workers. During the
three years since CN was privatized, Paul Tellier received total salary and bonuses of some $2.8 million.
But the pay for the CEO of CN has only gotten better over the next ten years. As of 2007, current CN CEO E. Hunter Harrison made
a base salary of $1, 719, 650.00 and an overall total compensation of $13,322,045.00 and was ranked as the 24th highest paid
CEO on the ‘Top 100 list of CEO pay’ for Canadian based companies.
Click here to view the report by Hugh Mackenzie of the CCPA
Source: CCPA and files of CAW-Canada, CAW Economist Jim Stanford and the Hansard Index