Top executives still raking it in
TheStar.com – Business – Top executives still raking it in: Pocketed an average $7.35 million in 2008, down 29 per cent from 2007’s $10.41 million
Published On Tue Jan 05 2010. Dana Flavelle Business Reporter
In his folksy blog, Tom Glocer likes to present himself as a regular working guy who in his off-hours listens to the Grateful Dead, spends time with his wife and kids, and before he turned 50 started hitting the gym.
But, unlike the average Canadian working stiff, the chief executive officer of Thomson Reuters Corp. earned $36.6 million in salary, benefits, bonus and stock options in 2008, a new report says.
That made Glocer the country’s highest-paid CEO that year and a symbol of the widening gap between chief executives and average wage earners, according to a review by the Canadian Centre for Policy Alternatives.
Canada’s top 100 CEOs pocketed an average $7.35 million in 2008, the year recession broadsided the nation, the progressive Ottawa-based think tank said in a study released Monday. That is down from an average of $10,408,054 in total compensation in 2007.
The 2008 total was 174 times more than the average working Canadian, who earned $42,305, the study found.
Put another way, over the same decade, the average compensation of the highest paid 100 CEOs outpaced inflation by 70 per cent, while the average Canadian lost 6 per cent of his or her income to inflation, the study said.
Looking at just the top 50 CEOs and going back even further, the gap since 1995 has grown from 85 times the average Canadians’ earnings to 243 times by 2008, the study also said.
Indeed, by the time most Canadian workers got back from lunch Monday, Canada’s highest paid chief executive officers had already earned their year’s income, the think-tank concluded.
The late Ted Rogers, founder of Rogers Communications Inc., was second with 2008 compensation of $21.5 million.
Big bank CEOs were also high on the list, while some high-profile earners, such as Magna International Inc. chairman Frank Stronach, took home less than they have in past years. Stronach’s compensation in 2008 was $10.7 million.
Hugh Mackenzie, the report’s author, said the centre publishes the list annually in hopes of influencing public debate. The centre said corporate boards should tie executive compensation to things that chief executives can influence, such as sales and profits, instead of rewarding them for their company’s stock performance, a goal that can skew decision-making.
The report adds that if corporate boards are unwilling to act, governments should tax CEOs’ pay more heavily, or at the very least remove the “subsidy” that CEOs receive when they accept much of their compensation in stock options, since for tax purposes those are treated more favourably than income.
Luckily for Glocer, despite a global outcry about fat executive paycheques, Thomson Reuters is based in Canada, a country where regulators and politicians have so far trodden lightly on the issue.
While Alistair Darling, Britain’s Chancellor of the Exchequer, has introduced a hefty tax on bankers’ bonuses, in part to assuage public anger, in Canada Finance Minister Jim Flaherty has resisted calls for what he termed “punitive taxes.”
Bank bonuses in particular have become controversial as governments around the globe doled out millions to prop up financial institutions. However, Canada’s banks have remained healthy compared with their G7 counterparts.
Glocer could not be reached for comment.
However, an official of Thomson Reuters noted that much of his compensation that year was in one-time grants related to the acquisition by Thomson of Reuters to create the world’s biggest professional information company.
Glocer received $26.1 million in 2008 in restricted share units designed to motivate him “to succeed in executing our integration plan and realize our growth potential,” the company says in its annual circular published last spring.
As well, Glocer, who had been CEO of Reuters, received a one-time payment of $757,397 to help relocate his family from England to New York, and a $443,750 contribution to his supplemental executive retirement plan at Reuters, the circular notes.
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