The most recent list of top CEO salaries shows only one Mississauga and one Oakville company on the tally.
The list is part of a report titled Overcompensating: Executive Pay in Canada, which details the 100 highest paid CEOs in the country and other information about executive pay. The report was authored by Hugh Mackenzie, a research associate at the think-tank.
Mississauga company Just Energy Inc.’s CEO Ken Hartwick earned more than $3.8 million for 2011, says the Canadian Centre for Policy Alternatives, a left-learning Ottawa think-tank that has long promoted social equality in the economy.
Oakville’s Tim Horton’s Inc. is also on the Elite100 list, paying its CEO Paul House more than $4 million.
Most of the high salaries on the list have been paid by oil, gold and other companies, such as Yamana Gold, Talisman Energy, and Magna.
But does that mean local companies are more frugal with their executives?
Not necessarily. The list mainly reflects the fact that few big publicly traded companies – Loblaws based in Brampton, Tim Horton’s based in Oakville – call the region home.
The local economy is mainly made up of small businesses that don’t pay their CEOs tens of millions of dollars a year, or private companies whose compensation packages are not publicly disclosed.
Moreover, Mississauga is home to many Canadian subsidiaries of Fortune 500 companies in the United States such as Microsoft, Target and WalMart as well as Asian and European giants, such as Roche, GlaxoSmithKline, Kia and Samsung.
As such, many of the highest-earning executives of those companies reside outside of Canada or information about their pay is limited.
However, the business communities in Brampton, Mississauga and Oakville should not feel that they are missing out by not landing more names to this list.
In fact, executive pay is facing more scrutiny by both the public and shareholders worldwide. Companies like Enron, WorldCom and Nortel all saw corporate executives pocket millions despite stock prices evaporating and investors losing entire life savings.
American International Group incited controversy when it was publicly disclosed the company was to pay approximately $218 million in bonus payments to employees of its financial services division, despite having received billions in federal bailout funds.
And two years ago, Magna International Inc. founder and former CEO Frank Stronach faced opposition from a high-profile group of investors for a $1-billion payout in exchange for his multiple voting shares. In 2009 he was also the country’s highest paid CEO, earning $61.8 million. As Magna’s honorary chair, Stronach still earned nearly $41 million last year and again topped the list.
So while your end of year lists of top earners and large multi-million dollar salaries may attract media attention and pique reader’s interest, the economic breadth of a region does not ride on the salaries of the few.