The highest-paid CEO in Canada for the year 2009 was Aaron Regent of Barrick Gold. He "earned" $24,217,020 in that year. In second place was Hunter Harrison of the Canadian National Railway, who was paid a stipend of $17,343,160 for his toil. Ranking #100 was Michael Waites of Finning International - his paycheck was $2,967,207 in 2009. The average salary among the 100 was $6.6 million, down slightly from 2008 at $7.3 million.
Compare this to the annual wage salary for the average Canadian worker in 2009, which was $42,988 and one can easily calculate that the average CEO in the Top 100 is paid 155 times the wage of the average Canadian worker.
The Star interviewed Roger Martin, dean of the U of T's Rotman School of Management, who believes that the way executives are paid was a key ingredient in the economic crash of 2008/2009. Executives like Jack Wash of General Electric can retire when stock prices are at or close to their peak. Wash owned $900 million of GE stock at the time of his retirement at time.
Even subperforming CEO's make out like bandits. Bob Nardelli of Home Depot, who Martin argues "did a terrible job", resigned with a severance package worth $240 million. "Calling it quits can be a lucrative business" says The Star.
Remember that 2009 was the year in which we were enduring an economic downturn that was generally acknowledged as being the worst since the Great Depression. Billions of dollars in bailout cash were being delivered by the Canadian government to the private sector. Workforces were being slashed left, right, and centre. Employment Insurance payouts soared. Unemployment figures continue to be high ion spite of the modest recovery that we are now enjoying. But the CEO's, and I will wager their senior executives, were doing very well indeed.
Would someone please convince me that these CEO's have 155 times the talent that the average Canadian worker? Do they work 155 times as hard as the average Canadian worker? Are they 155 times smarter than the average Canadian worker? Are they 155 times more ethical, more honest, more motivated than the average worker?
We are told that big money is needed to attract big talent. Balderdash. There are just too many examples of very bright young people growing concepts into successful enterprizes (ever heard of Facebook or Google?) that fly in the face of the Big Money Theory. Intelligence, talent, and work ethic are not the exclusive domain of the rich. In fact, given some of the collossal disasters seen in recent years in Big American and Canadian Business, one has to wonder whether there is an inverse relationship: is it possible that the more we pay our senior executives, the more stupid they become? Do they become more reckless? Do they become less trustworthy? Do they become less altruistic? Do they become more concerned with their own lot in life than the welfare and happiness of their employees and their customers? Do they become more short-sighted, looking toward tomorrow's stock price rather than the long-term stability of the organization? Do they become egomaniacal at the expense of society as a whole?
Demographic data seems to be indicating a growing gap between the very rich and the working poor. The middle class appears to be eroding. Wealth, it seems, is being withdrawn from the middle class into both the public sector (through Big Taxation) and the private sector (into the hands of the very wealthy).
This cannot be a sustainable trend.