In 2016, CEOs at companies in the Toronto Stock Exchange (TSX) Composite were awarded a median $3.5 million, according to a recent report authored by Accompass, an advisory firm focusing on compensation and benefits. The report, developed through an analysis of data collected by Equilar, provides an overview of the executive compensation landscape in Canada with analysis and insights into specific pay practices.
The comprehensive report identified pay levels for all executive positions named in publicly disclosed documents (e.g., annual report, management-information circulars, corporate websites) as of August 2017, and included the Chief Executive Officer (CEO), Chief Financial Officer (CFO) and the next three highest paid executives with compensation greater than $150,000 at each organization.
The report noted that although the focus tends to be on CEO pay levels, median compensation appears to have a $1 million floor across all executive positions. Because executive pay is a significant investment, “organizations must continuously monitor the compensation programs in place for their executive teams, ensuring dollars are being spent efficiently and effectively,” the Accompass authors noted. “This includes protecting intellectual property through retentive measures, linking pay to ‘positive’ performance, and investing in succession.”
The chart below is from the report and identifies both median and average compensation for top positions, as well as the highest-paid individual in each category. (Graph 1)
Gender diversity is also sparse at Canadian public companies, not unlike their U.S. counterparts. The report noted that just six organizations included in the study (2.4%) have a female CEO, and Nancy Southern represented two of these organizations—ATCO and its subsidiary, Canadian Utilities. At Equilar 500 companies, 28 CEOs are women, representing just 5.6% of the group. Another parallel to the U.S. market: Women who are in the top position tend to be at larger organizations, the report said.
“As organizations across Canada continue to face dynamic and evolving issues around how to compensate their leadership teams, understanding the current pay trends within their respective industry is paramount,” the report’s authors wrote. “Organizations must acknowledge the impact of other issues such as increased scrutiny, compensation disclosure requirements, compensation risk, a defensible benchmarking process, say on pay and so on. The numbers don’t tell the whole story, [and] the process followed is much more important.”