Compensation packages in Canadian boardrooms and further down the country’s corporate operational flow charts need major revision.
First to the boardroom, where a recent Canadian Centre for Policy Alternatives report noted that compensation for the country’s 100 highest-paid CEOs hit a new high in 2015: their salaries and other benefits, on average, clocked in at $9.5 million. That, according to report author Hugh Mackenzie, is 193 times the average industrial wage in Canada and represents a 178% increase in top-100 executive compensation between 1998 and 2015.
No argument here that top CEOs should be well compensated for the complex and demanding jobs they do, but merit rarely appears to be among the guiding principles behind their compensation packages.
Consider, for example, that a different report in 2016 documented the pervasive timidity and lack of courage in corporate Canada.
The Future Belongs to the Bold found that only 11% of the 1,200 business leaders surveyed were in charge of “truly courageous” companies. The rest, according to the Deloitte study, lacked the courage needed to cultivate long-term prosperity and lead Canada’s economy beyond mediocrity.
But imprudent compensation is not confined to the country’s C-suites.
Canada’s public-sector workers continue to reap higher wages and better benefits than their private-sector counterparts.
A Fraser Institute study released late last year estimated that government workers in Canada received, on average, 10.6% higher wages than their private-sector counterparts in 2015.And the taxpayer bill from such public-sector benefits as banked sick days is enormous. The Canadian Federation of Independent Business pegs the tab for federal and provincial governments at $3.8 billion. Metro Vancouver municipalities also face multimillion-dollar sick-day liabilities.
In the real world of market-driven private-sector sick-leave plans, businesses can’t afford the banked sick-day boondoggle. In the long term in the public sector, neither can taxpayers.
