The purchasing power of CEOs here on the rise

The purchasing power of local CEOs on the rise

UPDATE DAY

While the average worker continues to lose purchasing power, several executives of large Quebec companies were entitled, last year, to compensation increases well above the high inflation that is raging currently.

The average increase in compensation awarded to senior executives of the 10 largest listed companies exceeded 25% in 2021, according to calculations made by Le Journal.

This increase is similar to that of more than 23% observed by the Toronto daily The Globe and Mail for the median compensation of the CEOs of the 100 largest listed companies in Canada. This reached $9.1 million in 2021.

Michel Magnan. Accountant

The situation does not surprise Professor Michel Magnan, holder of the Jarislowsky Chair in Governance at Concordia University.

“Stock markets performed well in 2021, which brought even more wind to the veils in compensation plans that are based on share price,” he notes.

Conservative targets

What's more, the pandemic had flared up again at the end of 2020, when companies set their financial targets for 2021.

“We had just reconfigured large parts of the economy, so perhaps the image of what was to come for the year 2021 was very dark. We therefore set conservative targets which were, in the end, easily achieved,” summarizes François Dauphin, CEO of the Institute on Governance.

The specialist further explains that compensation programs generally struggle to isolate the individual contribution of a given executive to the performance of a company, so the emoluments tend to follow mainly the evolution of the markets.

The buying power of CEOs here rising

The buying power of CEOs here rising

“The problem that we have seen for several years is that we would like there to be a greater correlation between compensation and the elements that are truly under the control of managers,” he underlines. /p>

The Caisse lets pass

Institutional investors, who openly worried about the marked growth in the remuneration of big bosses a few years ago, today are more discreet. 

“The concern with controlling compensation is still there, but it seems to have taken a back seat to the concern with retaining management teams,” says Mr. Magnan.

Thus, the Caisse de dépôt et placement du Québec found no fault with the compensation of senior executives at Nuvei, which jumped 2,900% in 2021, and CGI, which grew by 111%.

For François Dauphin, the reason is very simple. 

“If things are going well for the manager, in general it is going well for [the institutional investor] as a shareholder”, he says.

A widening gap

Result: The disparity between the compensation of big bosses and ordinary employees is likely to have continued to widen in 2021, even if workers have generally been entitled to more generous salary increases in recent months.

According to Mr. Dauphin, in the spirit of good governance, companies would do well to link the issue of executive compensation more closely to that of income inequality within their ranks.

“These are elements that should be analyzed in more detail by the compensation committees in the years to come, he believes. There is greater sensitivity. When we see huge sums granted to leaders, it produces visceral reactions among people. » 

Compensation of senior executives of the ten largest Quebec companies listed on the stock exchange in 2021 

  • 1. Canadian National: +19%
  • 2. Bell Canada: +14%
  • 3. National Bank: +44%
  • 4. CGI: +111%
  • 5. Dollarama: +19%
  • 6. Power Corporation: -9%
  • 7. WSP: +18%
  • 8. Metro: +2%
  • 9. Saputo: -15%
  • 10. CAE: +33%

Note: Alimentation Couche-Tard has been excluded because data for its most recent exercise has not yet been released.

< strong>The Big Three Champions

Highest Earnings for 2021

  • Philip Fayer, Nuvei 140, $8 M

Bigger bonus for 2021

  • Alain Bédard, TFI International 5.3 M $

Largest accrued retirement pension

  • Jeffrey Orr, Power Corporation $41.1M

Sources: The Globe and Mail, Global Governance Advisors