Executive pay continues to grow faster than median pay in Canada

One of the contributing factors to income inequality in North America has been the growth in the compensation of the senior executives of large companies.

Investors have had a front-row seat for the growth of CEO pay from the compensation reports that publicly-traded companies provide their shareholders. For the first time in 2018, investors have also been able to look at the CEO-to-median worker compensation ratios for US companies, which became a requirement under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

In Canada, however, such disclosure is not required, making it more difficult to compare the way senior executives are being paid versus their employees.

SHARE’s proxy voting and engagement teams regularly pore over the data that is available in Canada as part of our interest in analyzing the degree to which CEOs and average workers benefit from the wealth they create, and understanding what income inequality looks like at the firm level.

In a recent analysis, we looked at the executive compensation reported by 135 companies listed on the Toronto Stock Exchange. We analyzed the compensation that those companies paid between 2015 and 2017 to their 5 highest-paid executives (called “named” executives) and to their chief executive officers (CEOs), as a subset of the executives.  We then compared those amounts with the national median annual wage, as reported by Statistics Canada, for the same period.

Here’s what we found:


2015 2016 2017
Median of all named executive pay $1,434,997 $1,608,211 $1,898,277
Median CEO pay $3,079,910 $3,450,058 $4,143,256
Median annual wages, Canada $41,995 $42,661 $43,680

We also compared how much the median pay increased for each of these three groups between 2015 and 2017. The chart below shows what we found. For all of the named executives, the median pay increased by 10.7% between 2015 and 2016, and by another 15.3% between 2016 and 2017. For CEOs, the increase was about the same between 2015 and 2016, 10.8%.

But from 2016 to 2017, the CEOs’ pay increase was much larger at 16.7%. The pay of both executive groups increased significantly more than the median wage during that period. The median wage for all workers in Canada increased by 1.6% between 2015 and 2016, and by 2.3% between 2016 and 2017.

From 2015 through 2017, executive pay increased at a much faster rate than the pay of ordinary workers in Canada.  As this trend persists, the gap between the incomes of ordinary Canadians and those of the so-called 1% continues to increase.

The institutional investors that work with SHARE are paying attention to inequality because evidence shows that too much inequality can weaken economies, stall growth and contribute to social and political instability. When the income gap becomes too large it threatens the purchasing power of ordinary workers, which can erode the strength of the economy. Inequality can also affect individual companies. Studies have shown that rising inequality and large pay gaps within companies affect business outcomes.

Companies need to find a healthy balance between paying executives, re-investing in the company, paying their other employees, and rewarding shareholders. Doing this will allow them to maintain their productivity and retain the stable, motivated workforce necessary to remain profitable for the long term.


We used the median weekly wages for all employees in Canada for each year, multiplied by 52. For the underlying data, see

Francesco Grigoli, Adrian Robles, Inequality Overhang, International Monetary Fund, IMF Working Paper No. 17/76, 28 March 2017.

S. Block, Income Inequality and the Intracorporate Pay Gap,  April 2016, MSCI ESG Research Inc.

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