Sault’s Dovigi Tops Top Earning CEOs

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The Canadian Press

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Canada’s 100 highest-paid CEOs earned $13.2 million on average in 2023 in salaries, bonuses and other compensation, according to the Canadian Center for Policy Alternatives.

It was the third highest-paid year for CEOs since the CCPA began tracking the data in 2007, but a decline after 2021 and 2022 broke records.

“It’s still well above where it was historically,” said David Macdonald, the report’s author and senior economist at the CCPA.

Factors leading to the decline included lower profits in 2023 and workers getting pay raises after the most recent bout of inflation, he said.

The CCPA estimates that as of 10:54 a.m. on Jan. 2, the average CEO on the list had earned $62,661, the average annual income of a Canadian worker.

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The report found that the gap between CEOs and regular workers has increased significantly. The 100 highest-paid CEOs earned on average 210 times more than the average worker in 2023, while in 1998 they earned 104 times more.

The highest-paid Canadian CEO in 2023 was Patrick Dovigi of GFL Environmental Inc., whose total compensation was $68.5 million.

He was followed by Joshua Kobza of Restaurant Brands International Inc. with $39.1 million, and then RM Kruger of Suncor Energy Inc. with $36.8 million.

In general, salaries were not the main source of total compensation for CEOs, with the bulk coming from other forms of compensation, such as stock-based awards and option-based awards.

“Salaries make up a smaller and smaller proportion of their overall compensation,” Macdonald said, adding that sometimes an executive even accepts a salary of just one dollar, including Shopify’s Tobi Lutke and Canadian Natural Resources Ltd.’s Murray Edwards, both of whom in 2023. list.

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The average cash bonus for these CEOs was $2.3 million in 2023, the CCPA said, adding that while in theory bonuses should be tied to company performance, in reality bonuses tend to increase regardless of if the company is having a good year.

The three main types of non-salary compensation are direct stock awards (in which a person is paid in stocks rather than dollars), cash bonuses and stock options, Macdonald said.

Most of the CEOs on the list are men, and only three women appear on the list, outnumbered by CEOs named Scott (five) and Michael (four).

But not all of the report is bad news, Macdonald noted; For example, workers’ wages increased substantially in 2023 as inflation caught up, he said. Furthermore, those three women on the list earned more on average than the Scotts and Michaels.

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Since the CCPA has been tracking CEO salaries, it has also been tracking policy changes that could help narrow the gap between executives and regular workers.

One of those changes came in 2024, when the inclusion rate for taxing capital gains was increased to more than 66 percent (compared to 100 percent for earned income) for earnings over $250,000 for individuals, although this of course did not affect CEOs in 2023.

However, capital gains don’t kick in until the shares are actually sold, Macdonald noted, meaning tax revenue from the switch is potential: Some people could hold on to those shares in the hope that policy changes in the future. .

Another such change came in 2021, when the federal government limited the tax deduction for stock options to $200,000 per year.

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“We’re seeing the impact of that change on CEO pay,” Macdonald said. “Stock options as a means of pay have been halved for CEOs since 2021.”

Instead, there is a “pretty decisive shift” toward direct equity grants, he said.

“It used to be that stock options…were, from a tax perspective, a better way to get paid.”

This year’s report also investigated the idea that companies need to offer high compensation to attract top CEOs.

“In the real world, it’s a much more mundane explanation,” Macdonald said.

He said that, in fact, more than three-quarters of the CEOs on the list got the job within the company, working at their companies for an average of 21 years.

This “really breaks down the idea that these crazy pay levels are about competition,” Macdonald said.

The report recommends a “wealth tax” on Canadians worth more than $10 million, which it says could raise $32 billion a year. This is a much more direct approach than addressing stock options or capital gains, Macdonald said.

The report also recommends higher top marginal tax brackets.

“Historically speaking, Canada’s marginal tax rate for the wealthiest is low,” the report says, with the top brackets within the 70 per cent range in the post-war years, compared to about 50 per cent today.

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