Mr. Speaker, we are nearing the end of the year. New Year's Day 2017 falls on a Sunday. The first paid day in 2017 is January 2. By around noon on January 3, Canada's top 100 CEOs will, on average, have made as much as the average full-time employee will earn over the entire year.
In 2013, and again in 2014, Canada's top 100 CEOs made an average of $9 million each. In other words, the average of these top CEOs makes 184 times as much as the average Canadian worker. This inequality is not only large but it is also growing. Figures on the top 100 CEOs only go back to 2008 on a comparable basis. However, if we look at the top 50 CEOs, an even more elite group, in 1995 only about 20 years ago, they made only 85 times as much as the average worker.
Why should Parliament care if private corporations decide to pay their CEOs a lot of money? Because it is a lot of money that is not being used for other purposes. If we consider 100 CEOs each making an average of $9 million, that is almost $1 billion not being used to hire other employees, not being invested in machinery or equipment, not being devoted to necessary research and development.
Corporate Canada as a whole would be better off if companies could pay CEOs less, but individual corporate boards feel the need to keep up with other companies. This produces a circular logic to justify ever-increasing executive compensation. Even for the CEOs themselves, there is no real benefit to these pay increases. For one of the top 100 CEOs, another million dollars does not actually mean a higher material standard of living. It just means a change in the relative ranking.
Our economy would be stronger and even corporate Canada would be better off with government regulation to limit CEO compensation.
Bill C-25 includes some minor improvements to corporate governance, but what it is missing is mandatory and binding “say on pay” provisions as have been adopted in other advanced countries. Canadian companies can put executive compensation to a vote of shareholders but they are not bound to the results. Bill C-25 should require companies to have votes on CEO and executive compensation and be bound by the results.