The top 100 Canadian CEOs are making an average of $7.9 million according to a recent report from the Canadian Centre for Policy Alternatives titled All in a Day's Work.
It is even more shocking when you realize that $1.69 million of the $7.9 million average compensation package comes from stock options. Because of a an unfair tax loophole, only half the income from stock options is taxable. Ordinary tax payers are, in effect, subsidizing the already obscene salaries of the top CEOs.
It is time we closed the stock options tax loophole.
The CCPA study also points out that these highest paid CEOs made 171 times more than Canadians earning the average wage of $46,634 a year. There is no ethical justification for such a huge gap in income. These CEOs are not 171 times smarter or hard working than the average Canadian worker.
But it is not just workers who should be outraged that their bosses are pocketing an unfair share of profits generated mostly by the work of the employees. Shareholders too should be protesting against the cosy deals made between CEOs and corporate directors to pay themselves unreasonable compensation at the expense of their workers and shareholders.
The Canadian economy as a whole also suffers from run-away CEO and corporate director compensation. Profits used to pay CEOs and corporate directors are not available for investing in research and product development, machinery and equipment and new ventures. Canadian productivity is lagging behind many of its trading partners because of under-investment by Canadian companies. Job creation also suffers when money is diverted away from productive investment.
Reversing corporate tax cuts and investing this revenue in infrastructure and social investments such as education and training, would put money to much better use boosting productivity, employment and the economy - money that many corporations are now just sitting on or using to pay their CEOs high salaries.
The tax system can also be used to help close the income gap by closing unfair tax loopholes that benefit the rich and increasing tax benefits such as the Child Tax Benefit and the Working Income Tax Benefit that boost the incomes of the poorest Canadians.