個案資料

Inflation-adjusted CEO pay at Canadian big banks has nearly quadrupled since the early 1990s, leaving many observers outraged. The author suggests a benchmark for CEO pay at Canadian big banks that would effectively halt the ongoing pay escalation while allowing banks to stay competitive. He recommends that annual grant-date target total CEO pay should remain flat at $10 million until it is indexed to 100 times the median Canadian family income (i.e. until the median family income surpasses $100,000, from the current median of $70,000). This would not mean that actual realized pay would be flat at $10 million, as pay on incentives would continue to vary, and this benchmark could be implemented immediately without major pay cuts. It would also return CEO pay at the Canadian big banks to where it was at the end of the 1990s, before the dot-com bubble. Many boards, when setting executive pay, assume the transferability of executive talent as a reason to keep raising CEO pay. Yet opportunities for CEOs to switch from one CEO role to another are rare and often fraught with problems. In reality, the level of CEO pay matters less to many CEOs than their perception of that pay relative to their peers’ pay.