It’s 10.33 am on the first working day of 2008. If you are an average Canadian worker do you know how much your boss has already made this year compared to what you make?
Here are the numbers. The average remuneration of the 100 highest-paid Canadian chief executives working for a publicly traded company was $8,528,000 compared to the average salary of $39,000 for the average Canadian worker.
In other words, it will take a little more than nine hours for the average boss in a large Canadian firm to make what an average Canadian earns all year. Canada’s top CEOs now make 218 times as much as the average Canadian full-time worker, compared with only 104 times as much in 1998.
One element that has driven up executive salaries is that the market for chief executive officers has become an international market and the salary levels in the U.S. tend to slip over into Canada.
Does this blatant salary differential make any difference? If Canada doesn’t pay those salaries, who would run our companies? Moreover, successfully run companies generate millions of jobs, don’t they? and further millions for the shareholders. And how long would we be competitive if the government started to tax away CEOs salaries? (By the way, it would seem these salaries are paid whether the company makes money or not.)
Some, however, do not agree that CEOs are worth their weight in gold. A former union official says most CEOs are the corporate equivalent of rent-a-cops who come in for a short time and to argue that the wealth of these large corporations is created by one individual is ridiculous.
What do you think?
Is the differential between a CEO’s pay and a worker’s pay out of whack?
If so, what could be done about it?