The Canadian Centre for Policy Alternatives (CCPA) recently released its annual rundown of the compensation packages awarded to Canada’s highest-paid CEOs. You likely won’t be surprised to learn that according to the “Living the High Life” report, the top dogs experienced another “record-breaking year.”
“By 9:23 a.m. on January 2 Canada’s 100 highest-paid CEOs had already made what the average worker will make all year,” David Macdonald, the report’s author, notes. For the richest Canadians, it seems the sky’s the limit, as their total compensation continued to climb in 2024, the year of the last available data.
A look at the headline numbers from this report is especially alarming.
The average pay across Canada’s 100 top CEOs came in at $16.2 million. This record bested the previous one set in 2022 by $1.3 million. Moreover, these CEOs are now paid more than double what they were in the late 2000s.
The top executive on this year’s list, Tobias Lütke, the CEO of Shopify, became the highest paid in Canadian history, pulling in an astonishing $205.47 million. Lükte beat the previous holder of this title, the CEO of Valeant Pharmaceuticals, by $22.6 million.
The “minimum wage” required for a CEO to make the top-100 list in 2024 was $7.2 million, up from $6.9 million the previous year. To put this in perspective, a minimum wage employee working full time in Ontario earned $16.55 per hour for most of 2024, or just more than $34,000 in gross pay if they worked the entire year. That’s 0.005 per cent of the minimum salary required to get on the bottom rung of the top CEO list.
Comparing CEO compensation to the average worker’s pay isn’t much better. In 2024, top executives made 248 times more than the average worker, up from 246 times in 2022. While the average worker increased their pay by almost $3,000 from 2023, bringing it to $65,548 in 2024, the average CEO enjoyed a pay bump of $3 million.
To further drive the point home, “Living the High Life” presents CEO pay in hourly terms. That $16.2 million in average annual compensation translates into $7,812 per hour, or $130 for every minute of every working day. These are truly mind-boggling figures.
In addition, the disparity between average worker pay and executive compensation has been widening at an alarming pace. In the late 2000s, average CEO pay was around 170 times higher than average worker pay, up from 104 times in the late 1990s, and probably about 40 to 50 times in the 1980s. In other words, since Canada’s hard turn toward neoliberalism, corporate executives have made out like bandits while average workers have been left in the dust.
In more recent years, workers’ wages have grown at a respectable rate, though often still short of price rises for essentials like housing and food. Between 2020 and 2024, the average worker’s total salary grew by 15 per cent, going from $57,024 to $65,548. CEOs, by contrast, wouldn’t have even noticed the growth in prices since 2021. That’s because the latter’s pay ballooned by 49 per cent, or $5.2 million, over the same period. As the report puts it, “inflation is easy to absorb with a $5 million raise.”
As has been the standard practice for some time, CEOs are largely paid in various types of bonuses, including the direct rewarding of stocks. In 2024, CEOs received 84.3 per cent of their pay as bonuses. Whereas workers are paid in wages or salaries, executives typically receive the vast majority of their compensation in the form of “variable” or “performance-based” pay, though such pay tends to ‘vary’ in only one direction: up.
Record CEO pay is directly related to skyrocketing corporate profits. As “Living the High Life” notes, “Prior to the pandemic, corporations were bringing in roughly $400 billion a year in pre-tax profits. After the pandemic, this jumped to a new level—$600 billion. In 2024, it stood at $630 billion.”
The higher prices extracted by corporations for food, housing and other essentials have padded these outrageous corporate profits, which then form the basis for CEO bonuses. “Inflation continues to be the gift that keeps on giving for the corporate sector and, by extension, the CEOs whose bonuses are tied to their profits,” the report summarizes.
Comparing the exorbitant compensation of Canada’s CEOs to the economic conditions of the lowest-paid workers tells a tale of two countries. At one pole are a select few literally swimming in cash beyond what any one person could ever need. At the other pole is a mass of working-class Canadians struggling to get by on low wages with often limited prospects for improving their conditions.
For example, a study published by Statistics Canada last week found that between 2016 and 2022, 9 per cent of Canadians aged 15 and older experienced what they call “persistent low income,” defined as falling under an after-tax low-income threshold for four out of the seven years of the study. Female lone-parents, people with disabilities and new immigrants were among the most impacted groups.
As well, despite modest improvements at the low end of the labour market, Canada continues to register a troublingly high share of low-wage workers, a problem directly related to a labour relations system that denies access to unionization to the vast majority of workers.
We are increasingly a country of exorbitant wealth alongside persistent poverty and low pay. While there’s no silver bullet to address inequality, we know where to start for solutions.
The CCPA’s “Living the High Life” recommends two important tax changes to target the ultra-wealthy.
A “millionaire’s tax” would create a new tax bracket with a higher rate for “every dollar earned over the million mark.” Such a policy could begin to raise marginal tax rates back to where they were decades ago, before we permitted the richest to keep such large portions of their spoils.
Second, the report calls for a wealth tax applied to those with at least $10 million in assets. This could raise a large amount of public revenue by making the rich pay tax on their currently un-taxed wealth, instead of the present practice of taxing only income. A wealth tax set at 1 per cent per year on assets over $10 million and 3 per cent on assets over $100 million could raise more than $20 billion a year, according to the CCPA — enough to fund our underperforming national childcare program and end hospital emergency room wait times.
Combined with taxing the rich to expand public services for all, we need more workers with the bargaining power to make corporations and other employers pay. There’s no path beyond our unjust and unequal economy that doesn’t feature unions as a central vehicle. Our task involves bringing these demands together and building the social forces necessary to win them.
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