Jagmeet Singh to table plan to rein in outrageous CEO pay

Canada's NDP issued the following press release on April 18, 2023:

OTTAWA — On Tuesday, Canada’s NDP Leader Jagmeet Singh announced that he will introduce legislation to combat the corporate greed that incentivizes driving up the costs of everything for Canadians. Singh’s plan will be similar to the one introduced by Bernie Sanders and Elizabeth Warren in the US that makes big corporations pay a bit more corporate income tax when the difference in salary between top executives and average workers is excessive.

“Over the last few months, we’ve seen Canadian families that are working hard and playing by the rules fall further and further behind,” said Singh. “It’s really frustrating. But what makes it even worse for people is to see that while you’re trying to pay the bills, the richest CEOs are driving up prices and giving themselves huge raises, all while claiming to be ‘underpaid’.”

Canada’s richest CEOs now make 243 times more than the average Canadian worker. Galen Weston, Loblaw's CEO, just got a 55 per cent raise, earning $11.79 million a year. He makes 431 times what Loblaw employees make. Galen Weston is not alone. Rogers CEO, Tony Staffieri, got paid $31.52 million in 2022 which is 164 times more than the average employee in his industry.

“While Justin Trudeau sits by and pretends there isn’t an issue, because his friends are doing just fine and Pierre Poilievre works to tip the scales even more in favour of rich CEOs, the NDP is coming up with solutions,” added Singh. “We believe that Ottawa should be working for you – not for wealthy CEOs, and that’s why we’re working on this plan.”

Background

• In 25 years, CEOs went from making roughly 100 times the average worker's pay, to nearly 243 times in 2021. This is an all-time high.
• In 2021, the average top CEO pay hit $14.3 million – a 31.2% increase compared to CEO pay in 2020 ($10.9 million).
• Canada’s top 100 CEOs earned a minimum of $6.7 million in 2021 – up $600,000 from just one year ago.
• In comparison, the average private sector worker took home $58,000 in 2021 – a 3% increase (or $1,800) from 2020.
• At the end of 2021, year-over-year inflation stood at 4.8%, meaning the average worker took a 2% pay cut and CEOs got a 26% pay bump when accounting for inflation.

Here are a few examples of excessive CEOs' pay:

• Galen Weston (Loblaw) earned a salary of $11,792,068 in 2022, which was 431 times more than the average employee.
• Tony Staffieri (Rogers) earned a salary of $13,615,047 which is 164 times more than the average employee in his industry.
• D. McKay (RBC) earned a salary of $16,363,877 which is 194 times more than the average employee in his industry.
• Michael Rousseau (Air Canada) made $12.38 million in 2022, 152 times more than the average employee in his industry.

Jagmeet Singh’s legislation will be similar to the US Senate Tax Excessive CEOs Pay Act which plans to increase corporate income tax by:

• 0.5% if the CEO-to-median-worker pay ratio is between 50 and 100
• 1% if the CEO-to-median-worker pay ratio is between 100 and 200
• 2% if the CEO-to-median-worker pay ratio is between 200 and 300
• 3% if the CEO-to-median-worker pay ratio is between 300 and 400
• 4% if the CEO-to-median-worker pay ratio is between 400 and 500
• 5% if the CEO-to-median-worker pay ratio is 500 and more

If the US Senate excessive pay act was in effect in Canada in 2022:

• Loblaw would have paid up to $106 million more in taxes.
• Rogers would have paid up to $23 million more in taxes.
• RBC would have paid up to $200 million more in taxes.
• Colliers International Group Inc. would have paid up to $460,000 more in taxes.

Additional information:

• Jagmeet Singh's legislation will also include regulations to prevent tax avoidance and contractor use to avoid paying this penalty.
• The US legislation garnered the support of many representatives, 32 academic leaders and policy analysts and 35 major economic justice organizations.
• The NDP will use the money recouped by this measure to bring more fairness to working people by making life more affordable for them.
• The NDP also plans to include in their legislation a requirement for large companies to disclose their CEO-Worker pay ratio.