Canadian CEOs Breeze Through Recession
January 4, 2011, 1:35 PM EST
Average working Canadians may still be recovering from the aftermath of the recession, but Canada's 100 best paid CEOs are doing great, according to a report by the Canadian Centre for Policy Alternatives called Recession-Proof.
The study, released annually at the beginning of the New Year, found that these CEOs enjoyed salaries 155 times higher than Canadian average income earners.
Recession-Proof finds the nation's top paid CEOs pocketed an average of $6.6 million during the darkest period of the recession - a stark contrast from the total average Canadian income of $42,988.
"Even that extraordinary number understates the real story," says Hugh Mackenzie, author of the study and CCPA Research Associate. "Thanks to a change in corporate reporting introduced in 2008, we only have a conservative statistical estimate of the stock options that make up about one third of CEOs' 2009 pay. The public will never know how much most of these CEOs actually got paid in 2009.
"And that's only half the story. These CEOs are sitting on $1.3 billion of stock options they haven't yet cashed in. That's about $2 in future income for every $1 they declared in 2009."
When the CEOs decide to exercise those stock options, the study reveals Canadians will subsidize that bonus with an estimated average of $360 million in foregone taxes, since stock options are taxed at a lower rate, as if they are capital gains. Among Mackenzie's recommendations: getting rid of that expensive and unfair loophole.
The CAW is a member organization of the CCPA. To read the full study, please visit: http://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2011/01/Recession%20Proof.pdf