100 highest-paid CEOs in Canada take home $13.2 million on average, report finds

Canada’s 100 highest-paid chief executives earned an average of $13.2 million in 2023, according to a new report that found they collected 210 times the average worker’s pay. The report said this is the third-highest figure since it began tracking CEO compensation in 2007 and remains well above pre-pandemic levels, although it trails two record-breaking years in 2021 and 2022.

Patrick Dovigi, CEO and Founder of Green For Life Environmental Inc. (GFL), topped the list with total compensation of nearly $68.5 million.

The Canadian Centre for Policy Alternatives compiled the data by examining publicly disclosed compensation from 222 companies on the S&P/TSX composite index. By 10:54 a.m. on January 2, the first working day of the year, these executives had already earned what the average Canadian worker would make in an entire year, the report said. It also found the ratio of CEO pay to worker pay was 104 to one in 1998 and 150 to one in 2009, rising sharply over the past decade.

Most of these highly paid executives have been promoted from within. The report said 76 per cent of the top 100 were internal hires who stayed with the same company for about 21 years on average. “These aren’t gods plucked from heaven requiring heavenly pay packages,” the authors wrote, noting that companies tend to hire people who know their business “inside and out,” rather than seeking outsiders.

The study identified bonuses as the main reason CEO compensation soared relative to average wages. Salaries and pensions only account for 12 per cent of total CEO pay, which averaged $13.2 million. The remainder came from cash bonuses, stock options and share awards, the report said. Stock options alone were worth $2 million on average but have declined in recent years, something the authors attributed to a 2021 federal cap on the stock option deduction.

Meanwhile, share awards made up about half of CEOs’ total pay in 2023, up significantly from a decade ago. According to the report, these awards are often negotiated so that they continue to climb, even in years of lower corporate earnings. The authors said this indicates “massive bonuses only go one way: up.”

Employers may note that women remain starkly under-represented in Canada’s top corporate ranks. The study found that just three women appeared on the 2023 list of highest-paid CEOs, while five CEOs named Scott and four named Michael were included.

The authors highlighted two recent federal measures aimed at reducing the pay gap. A 2021 change limited the amount of tax relief CEOs can claim when exercising stock options, and a 2024 budget provision increased the share of large stock profits considered taxable income from 50 to 66 per cent. However, the report said these changes have not significantly narrowed the gap and recommended further policies, such as a wealth tax and higher top marginal brackets.

Methodology in the report relied on company management information circulars to tally compensation, converted to Canadian dollars at an average exchange rate of 1.3497 for companies reporting in U.S. currency. Researchers used Statistics Canada data for the average annual worker’s wage.

Top earning CEOs

*Indicates the CEO was paid in USD, which was converted to Canadian dollars. See the full list at https://www.policyalternatives.ca/news-research/company-men/