Highest-paid CEOs break compensation records in 2021: report


Top 100 CEOs by pay earned annual average of $14.3 million, breaking previous record of $11.8 million set in 2018

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Canada’s 100 highest-paid chief executives earned record compensation in 2021, according to a new report released Tuesday, as the economy roared back from COVID-19 restrictions and companies brought in windfall profits.

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The top 100 CEOs by pay earned an annual average of $14.3 million, breaking the previous record of $11.8 million set in 2018, the Canadian Centre for Policy Alternatives (CCPA) said in its yearly report on executive compensation, which examines the pay packets of the highest-paid CEOs, whose members can change on a year-to-year basis.

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The think-tank’s report said Canadian corporate income has also ballooned, pointing out the ratio of after-tax profits to gross domestic product hit 18 per cent in the first two quarters of 2021, “an all-time high.” The ratio hovered around 15 per cent for the two decades before the pandemic.

“Because profits (were) at record highs, bonuses were at record highs,” David Macdonald, a senior economist at CCPA and author of the report, said. “From a public-policy perspective, it can be certainly corrosive when the economy does well, and it’s only CEOs that do well … compared to the average worker.”

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Other records broken

Overall compensation for the top 100 CEOs rose more than 31 per cent from 2020, when the average pay stood at $10.9 million. The CCPA said the minimum pay in this group also hit a new high in 2021, increasing to $6.7 million from $6.1 million in the year prior.

It identified Tim Gitzel, chief executive of Saskatoon-based mining company Cameco Corp., as the group’s lowest-paid member, earning $6.7 million. The top earner was Philip Fayer, the chair and chief executive of Montreal-based global payments firm Nuvei Corp., whose total compensation was about $140.8 million.

Nuvei chief executive Philip Fayer was the top earner in 2021.
Nuvei chief executive Philip Fayer was the top earner in 2021. Photo by Handout/Nuvei Corp./The Canadian Press

The ratio of CEO compensation to average worker pay also increased from 2020. The average private-sector worker — the CCPA does not track the pay of workers employed by the top 100 CEOs — earned $58,800 in 2021, so the CEO cohort made 243 times that figure, which broke the record of 227 set in 2018.

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“The reason for the growing disparity between CEO pay and average workers is driven by variable compensation, or performance-based pay, although most people would just call it bonuses,” the report said.

Bonuses increasing

Base salary as a portion of the overall compensation package declined to eight per cent in 2021 from 14 per cent during the Great Financial Crisis.

But executives can also receive bonuses based on performance in the form of cash, stock options and shares, and those have been increasing. Bonuses made up 83 per cent of the top 100 CEOs’ total compensation in 2021, up from less than 70 per cent in 2008.

“It seems to be going up every year. It seems like a great target to raise money for … much needed public services,” Macdonald said of government taxing these forms of bonus pay.

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Highest-paid women

Just three women made it into the top 100 in 2021. The highest paid was Linda Hasenfratz, chief executive of Linamar Corp., a Guelph, Ont.-based manufacturing company, who earned more than $15.3 million. That was good enough for No. 25 overall.

Ann Fandozzi, chief executive of Ritchie Bros Auctioneers Inc., a heavy-equipment auction company based in Bolton, Ont., is No. 40 on the list, having earned about $13 million.

This is a boys’ club. It’s always been a boys’ club. It’s going to continue to be a boys’ club

David Macdonald

At No. 83 is Dawn Farrell. She is currently the chief executive of Trans Mountain Corp., but she was chief executive of Transalta Corp. in 2021 and made almost $7.8 million.

“Despite a lot of concern about gender equality over the last couple of years, there’s (been) no real action on that,” Macdonald said of companies targeting pay equity. “This is a boys’ club. It’s always been a boys’ club. It’s going to continue to be a boys’ club.”

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