CEO (Canada's Executive Oligarchy)

Elsie Mahendran



It happens every two weeks like clockwork - your blood, sweat and tears deposited right into your bank account. But the joy is momentary. You’ve got bills to pay, mouths to feed, and a car that needs gas. Minimum wage does nothing to ease the pain of working a 9-5 job on the daily, giving up weekends and nights so you can take on as many overtime hours as you can. A 48-hour work week for what – just so you can have the necessities? All the while Mr. and Mrs. CEO over there are enjoying making your yearly salary in a fraction of a day. And so, the rich get richer and the poor get poorer. It’s called executive compensation, and it has to stop!

In his opinion piece for the New York Times Joe Nocera detailed the biggest err in CEO paychecks was that most of them simply didn’t deserve it. He quotes Nell Minow who discussed her dismay towards the 1993 bill introduced by American Congress to cap executive compensation at $1 million dollars – not bad right? But there was one exception, this did not include performance pay. And so began the era of scapegoating executive compensation with the excuse of performance. It’s a slap in the face to hard working employees who are the real foundation of these companies, giving an arm and a leg to meet deadlines and solve the day to day problems that arise.

Let’s put it in perspective, Canada’s top paid CEOs earn 200 times more than the average Canadian employee. Canada’s top paid CEO has a base salary of $1.3 million – on top of that he brings in over $81 million in compensation – giving him a total salary of approximately $83 million per year. Ridiculous right? But, unlike Nocera’s article, this issue goes far beyond unequal pay and whether or not they deserved it. Put simply, it’s the misdistribution of money. Its equality vs. equity.

Let’s look at the bigger picture – our education system and the price of tuition, the ridiculous amount of money wasted in non-profit organizations, and what about our tax money? Where does our money really go? This cycle of executives getting away with fat pay checks has to stop.

What is Executive Compensation?

Kuepper, J. (2006). Evaluating Executive Compensation. Retrieved from Investopedia.

Kuepper focuses on the point of view of an investor (not a worker or CEO), and what executive compensation should mean to potential investors of a company. He goes on to evaluate the different types of executive compensation, how to find out a CEO’s pay within company filings, how to understand it and evaluate it. Furthermore, he discuses “Pay vs. Performance”, explaining that “comparing pay to stock prices can help [an investor] determine whether executives are over paid or not”. He also states that investors should always keep in mind what “industry peers” are making as a good comparison. Lastly, he discusses the laws around executive compensation. Kuepper uses a relaxed tone and breaks down the concepts so they are easy to understand – this was a highlight of his article. Overall, he was very informative, but as this was not an academic source it will be considered as secondary research.

Reh, F. J. (2017, August 14). Take a Look at the Issues with CEO Compensation. Retrieved from The Balance.

The Balance is a personal finance website – an offspring of – making it a secondary source in my research. Throughout the article Reh explores numerous perspectives on the issue of executive compensation. He draws on statistics from Bloomberg BusinessWeek and the Economic Policy Institute, both of which are non-academic sources. Reh is very fair in how he represents both sides of the debate, underlying possible biases in the statics, stating “data and metrics have the potential to paint the picture you want to paint”. Some topics he discusses include how CEOs are compensated, what they do to earn that money, if they worth all that money, and the issue of CEO compensation becoming contentious. Reh makes some very intriguing points throughout the article. His analogy between a CEO and a star player tested my beliefs on CEO compensation and broadened my perspectives.

Not Just Wall Street

Garner, J. L., & Harrison, T. D. (2013). Boards, Executive Excess Compensation, and Shared Power: Evidence from Nonprofit Firms. The Financial Review, 617-643.

            Garner and Harrison research the correlation between CEO pay in non-profit firms and the success of the firm. They compares the effects of a single executive (CEO) versus a board of executives on how a company is run in terms of salaries, executive compensation, funding towards projects and company achievement(s). Their research details that a CEO is likely to misdirect money, have larger compensation and not meet goals. In comparison, a group of executives will keep each other in line, keep fair salaries, lower compensation and divide work thus accomplishing more. Their research was very in-depth, but the extensive use of math over-complicated the information presented. Overall, I found the source quite helpful in providing me a solid foundation for further research and a pointing me in new directions. As this is an academic source it will be a primary source in my research.

Higher Education Quality Council of Ontario. (2015). The Ontario University Funding Model in Context. Government of Canada.

The Higher Education Quality Council of Ontario released a document detailing Ontario’s university funding model. Ontario supports its public universities through grants from the Ministry of Training, Colleges and Universities. The document details the other forms of funding universities receive (student tuition, federal funding, MTCU funding, and other Ontario Ministries) while listing the combined amounts. While this document was very useful in understanding the funding received by universities, it did not explain what that funding was used for – a topic I plan on researching. I would like to understand what percentage of this goes to salaries and how much is used for university programs for students. This document, being a government source, is a primary source in my research.

Con-Artists and Big Hearts

Flannery, T. P. (2002). Executive Compensation: Guidelines for Healthcare Leaders and Trustees. Health Administration Press.

The first chapter within this textbook details that healthcare providers do their job under the ethics of “to help ones neighbour”, but that they also deserve reward and recognition for their services through the benefits of compensation. Flannery explains that these compensation packages are created by the board of directors who closely consider reasonable compensation and the relationship between performance and pay. He goes on to explain that within healthcare institutions board chairmen are seen as completely separate from the CEO. The chairmen is given the job of watching over the CEO carefully, making sure their every move benefits the hospitals and that their performance is directly effecting their pay. A strength of this source is its focus on the health care system in both the non-profit and for-profit sectors. It allows for a good comparison between the set-up of their compensation systems and why they are created as so. This is a primary source within my research as it is an academic source.

Hall, B. J., & Liebman, J. B. (2000). The Taxation of Executive Compensation. The University of Chicago Press Journal, 1-44.

            This is an academic peer reviewed journal article, and will be a primary source in my research.  Hall and Liebman examine the taxation of CEO compensation and seeks to answer whether or not the policies surrounding it are effective or if they are being exploited. They also look into the sudden increase in CEOs’ receiving their compensation through stock options leading them to conclude that this is a tactic to circumvent tax law and save the CEOs money. By doing this, tax advantages that come from owning stocks have nearly doubled compared to that of the 80s. The other possibilities for this shift is for CEOs to retain more control of the company they oversee, meaning that if they cause the company to do well they directly profit, creating incentive for increased performance on behalf of the CEO. They also shows us that CEOs are willing to go to great lengths in order to maintain their eccentric paychecks by evading tax laws and acquiring it through other means like stocks. Hall and Liebman help us examine the mentality of the CEO which directly correlates to why compensation policies are ever increasing.  


Long, R. J. (2014). Strategic Compensation in Canada. Nelson Education Ltd.

Throughout the first chapter of his textbook, Long brings up numerous perspectives I have not seen in any of the articles I have read over the past few weeks. He discusses the importance of a reward system in a company – emphasizing the psychology behind them. He asks the question of how do we design a compensation system that produces the behaviors we want. Long states that many companies underutilize compensation packages. They’re either paying too little, promoting low job performance, or more likely than not, both. Furthermore, Long hints at the complexities of a CEO's job directly relating them to the complexity of compensation packages. He connects this to the broader picture stating compensation packages are not one size fits all; every company and every CEO will require something different. Long emphasizes the importance of companies understanding how these packages work within an organization and suggests keeping a careful eye on how they benefit or disadvantage the company. Overall, Long pushes the conversation away from the cost and reasoning behind these pay packages and towards understanding their importance in helping an organization prosper. As this was an academic source it will be a primary source in my research.

Long, R. J. (2014). Strategic Compensation in Canada. Nelson Education Ltd.

In the second chapter of his textbook, Long underlines the importance of continuously adapting the compensation package to changing circumstances. Many companies fail to do this, underestimating the impact it could have. He further emphasizes that compensation packages are a two way street; they must entice the CEO with benefits that suit their need which promotes them to work in favor of the company. An interesting point he brings up is that the needs and wants of the CEO should reflect the desire of the organization. For instance, both should want increased security, a high status within their community, achievement, recognition for these achievements and growth. Long goes on to explain the differences between a reward and incentive; he enlightens the reader on the use of each in manipulating the CEO. A highlight of this textbook is the multiple points of views it takes and its focus on Canadian polices and companies. The psychology aspect of the text is easy to understand and quiet interested also.


Long, R. J. (2014). Strategic Compensation in Canada. Nelson Education Ltd.

In the second half of chapter three Long details all organizations big or small (excluding voluntary) must deal with compensation issues. In small organization the job of creating a compensation system resides with the owner or CEO. In larger organizations the job of compensation is divided up for those who work in HR, the head of the department bearing the most responsibility. Though approval is required for changes made to compensation strategies by other top executives. He goes on the explain that within HR they are specialized roles - job analysts; benefits specialist; compensation analyst; compensation managers – who help control compensation. At a certain point a company will enlist outside help by hiring compensation consulting firms.

Long, R. J. (2014). Strategic Compensation in Canada. Nelson Education Ltd.

In the first half of chapter three Long begins by describing that an optimal reward and compensation system must contain eight main criteria. He adds that these eight pieces each must fit together and support each other. He also states that to create a system where these pieces align you must understand the managerial strategy within the company. Once a company is able to check all these boxes they can produce a system that adds the most value to their organization. While realistically it may to be hard to produce a system that is completely equitable within these eight sections - once a company is able to do so it gains a competitive advantage. With even one part out of loop, this can deter a company from full efficiency. Long does a good job of outlining the pieces necessary to build a sustainable and helpful compensation system.