It was another record-breaking year for Canada’s richest CEOs. 

In one work day, and less than a half hour into the new year — 27 minutes to be exact — Canada’s 100 highest-paid CEOs will have already earned the average worker’s annual salary, according to a new study by the Canadian Centre for Policy Alternatives (CCPA).

It translates to roughly $60,600 by 9:27 a.m. on Jan. 2, if you include Monday as a paid holiday, according to the report. 

The CCPA, an Ottawa-based think-tank that focuses on social, economic and environmental issues, found that the 100 best-paid CEOs in Canada now make 246 times what the typical worker earns. That number breaks last year’s record of 243 times the average worker’s pay. 

“The 100 CEOs, who are overwhelmingly male, got paid an average of $14.9 million in 2022. This amount surpasses their previously record-breaking pay of $14.3 million in 2021 and sets a new all-time high in our data series,” said David Macdonald, a senior economist at the CCPA and the report’s author. 

Lana Payne, the national president of Unifor, Canada’s largest private sector union, calls the report “enraging.”

“We’ve seen CEO pay increase consistently over the last number of years to a point now where it’s the highest it’s been … And at the same time we have these CEOs and the employer clubs that they’re part of lobbying every single day and fighting tooth and nail to make sure that we don’t have better labour laws in this country,” she said.

How one CEO tries to keep things on an ‘even scale’

Not all CEOs, however, are paid such large amounts of money. Hosni Zaouali, the CEO of ConnectED Labs, a Toronto-based technology company, has a specific formula that he said he follows to ensure his pay and his employees’ pay are on an “even scale.”

He said the highest salary at his company is “never 10 times higher than the lowest salary.”

“It means that if the company shows success, operational success and financial success, it’s not only thanks to the CEO, it’s also thanks to everybody, including the lowest salary in the company. So we make sure that everybody gets compensated accordingly,” he said. 

Zaouali said it’s “very important that the lowest salary is not too far from the highest salary in our company to keep everybody energized and everybody motivated.”

While base salary is an important factor when considering CEO wealth, it doesn’t provide a full picture of their total compensation, according to the CCPA report. 

A ‘story about inflation’ 

Like last year’s report, which CBC News also covered, part of the explanation for the large increases in CEO pay is linked to inflation, Macdonald said.

“This is largely a story about inflation … CEOs are paid primarily through bonuses, and those bonuses are based on things like revenue and profits. When revenue and profit goes through the roof due to inflation, bonuses go through the roof.”

Macdonald said despite this, salaries for average workers are often not keeping up with inflation.

“In 2022, the average worker in Canada got an average pay raise of $1,800, or three per cent. But prices went up by 6.8 per cent in 2022, meaning workers took a real pay cut of almost four per cent compared to 2021.”

In comparison, the top 100 CEOs saw an average pay raise of $623,000, or 4.4 per cent in 2022, according to the report.

One economist said studies like the one presented by the CCPA are “flawed.”

“The only way you can arrive at this conclusion is that you’re comparing oranges with apples,” said Vincent Geloso, an assistant professor of economics at George Mason University in Virginia. 

Geloso said reports like this fail to include other forms of employee compensation like benefits.

“People get more fringe benefits in the form of insurance, in the form of flexible hours. Things that employers pay for but aren’t considered compensation. When you include them, and you include that instead of wages alone, you’re getting a completely different portrait.”

In a 2020 report for the Fraser Insitute, a Canadian think-tank promoting private sector solutions, Geloso also argues that CEOs are paid for possessing unique skill sets that are increasingly in demand. 

“Today you find CEOs who have a larger share of PhDs and MAs and MSCs and STEMs. So they’re in harder sciences and harder domains, so there’s greater levels of skill in terms of pure knowledge.”

Addressing the gap

Lana Payne, the union leader, thinks governments can help reduce growing inequality. She supports measures such as improving and expanding access to collective bargaining rights for workers, raising the minimum wage and ensuring people have guaranteed hours of work.

 “I think the challenge is that more work needs to be done on a number of fronts to make sure that workers are not falling behind,” said Payne, who believes these measures could reduce what she calls the “inequality gap.”

The CCPA report also makes several suggestions for reducing the pay gap. The group suggests: introducing higher top marginal tax brackets, removing corporate tax deductability for compensation over $1 million, introducing a wealth tax on the rich and increasing the capital gains inclusion rate (making CEOs pay more taxes on the money they make selling stocks). 

“We’ve seen the active closure of the stock option deduction in 2021 as well as new higher income tax brackets in 2016. So this is something where we’ve seen a lot of debate particularly in other areas like a new wealth tax,” said Macdonald.

• How has inflation and the high cost of living impacted you? Tell us your story in an email to ask@cbc.ca