A new report has shown once again that Canadian CEOs of publicly traded corporations continue earning obscenely high pay packages.
The Canadian Centre for Policy Alternatives revealed that the 100 highest paid chief executives of TSX-listed companies collected an average $9.5 million in compensation in 2015.
That's 193 times the pay level of the average Canadian worker, who earned earned $49,510 in 2015.
It means that by 11:47 a.m. on the first working day of the year, January 3, the average compensation of these CEOs equals the annual wage of the average worker.
"A review of CEO compensation in Canada over time shows that the average earnings of Canada's corporate top 100 increased by 178% between 1998 and 2015," the CCPA report states.
Author Hugh Mackenzie has recommended revoking board of directors' unilateral authority to set compensation and subjecting this to shareholder votes.
"A second, less dramatic change would be to change the accountability of compensation advisors to make them accountable to shareholders rather than to the board, like auditors," he wrote.
If boards fail to curb CEO pay, Mackenzie mentioned several options for governments, including:
* ending special tax treatment for stock options, which can give executives an opportunity to purchase shares below the market rate;
* imposing higher marginal tax rates on high-income earners;
* levying higher taxes on the recipients of shares granted by boards of directors;
* subjecting a tax penalty on those whose compensation exceeds a "given ratio" to average pay.
U.S. political economist Robert Reich also proposed the latter idea in his 2015 book, Saving Capitalism: For the Many, Not the Few.
He suggested that workers' pay could increase, thereby stimulating the economy, if CEOs who earned 20 times the average worker's wage paid less income tax than those who earned 400 times the average.
Reich has also recommended higher taxes on corporations that contract out low-paid work to other companies.
According to the CCPA, the highest paid Canadian CEO of a TSX-listed company in 2015 was J. Michael Pearson, then CEO of Valeant Pharmaceuticals, who collected $182.9 million in compensation.
Donald Walker of Magna International was next at $26.5 million, followed by Harrison Hunter of Canadian Pacific Railway at $19.9 million.
In October, Bloomberg reported that Pearson and one other former Valeant executive were under FBI investigation in connection with "potential accounting fraud".