Chen earned a total of more than $89.7 million in 2014, according to the annual ranking of CEO compensation by think tank Canadian Centre for Policy Alternatives. The list ranks the top 100 CEOs based on their base salaries, bonuses, shares, options, pensions and other compensation received by Canadian CEOs. Chen eased out 2013 top earner Gerald Schwartz, CEO of Onex Corp. who back then earned $87.9 million.
The current number two spot is held by Donald Walker, CEO of automotive parts giant Magna International Inc. Walker earned $23.5 million. Schwartz is number three with earnings of $21.1 million.
The lowest-paid CEO on the list was Peter Blake (former CEO) of Ritchie Bros Auctioneer. Blake earned $4.3 million 2014.
Chen, who has been marshaling BlackBerry away from the company’s reliance on hardware towards software sales, says he is “pleased” with the company’s progress. During the period ending Nov 28, the company’s total revenue was $548 million, up almost 12 per cent from the previous quarter. The company continues to release new mobile handsets like the Passport and Priv smartphones but 70 per cent of software and service earnings amounting to $154 million are recurring, according to Chen. He aims to bring that number up to 80 per cent in 2016.
The CCPA rankings are part of the report titled Staying Power: CEO Pay in Canada, which brings attention to the glaring disparity of compensation that top executives receive when compared the average compensation received by other employees.
“Based on these data trends, the average top 100 CEO will have earned the annual wage of the average Canadian worker by 12:18 p.m. on January 4, 2016 – the second paid day of the year – and the same as the average minimum wage worker by 2:07 p.m. – on January 1,” said Hugh Mackenzie, economist and research associate at CCPA, who authored the report.
The report shows several trends for CEO compensation since 2008, including:
- In 2008, a recession year, the top 100 CEOs made $7.3 million, on average
- 2013 represented a record high in average CEO pay. CEOs made $9.2 million on average
- In 2014, CEO pay was two per cent less than the previous year but still hit $8.96 million on average
- Share grants are replacing stock options as the preferred route to higher pay. Stock options dropped from 21 per cent of pay in 2008 to 13 per cent in 2014. Share grants increased from 26 per cent in 2008 to 39 per cent in 2014
- Only two women made it to the top CEO pay list in 2014
- Despite the pay packages and corporate Canada’s opposition to expanding public pensions, nearly half of the top 100 CEOs can look forward to equally exorbitant pensions. Those 46 CEOs had pensions averaging $961,000/year. That’s almost as high as their $1.1 million average base salaries
Mackenzie notes in his report that governments and people around the world have been focusing on the “astronomical salaries pocketed by CEOs.”
He said there are two options for regulating executive compensation. One is voluntary restraint and the other is regulatory changes to corporate governance.
Mackenzie believes regulatory restraint will not adequately address the issue because “nearly everyone involved in determining compensation is in the club or in the same community of interest.”
He said this includes even independent consultants who can only advice on what CEOs are paid.
He said the government can “inject reason into an irrational compensation system” through regulation or the tax system.
“If we, as a society, have concluded that excessive pay is unacceptable, we should be able to claw back a greater portion of it from the recipients, and structure the tax system to discourage corporation paying those excessive amounts,” Mackenzie said. “…if we have concluded that equity-based compensation is not in the public interest or the long-term interest of Canadian corporations, the tax system can be restructured to expressly discourage it.”
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