06/02/2014 12:08 EDT | Updated 08/02/2014 05:59 EDT

Canadian CEO pay jumped 11% in 2013

Total compensation for chief executives at Canada’s largest companies climbed 11 per cent in 2013, according to consulting firm Global Governance Advisors, marking four years of sharp increases in pay for CEOs.

According to Statistics Canada, the average industrial wage jumped 3.1 per cent from March 2012 to 2013, rising to about $932 a week, or $48,480 a year.

Median compensation for CEOs was $5.6 million, or 115 times the average industrial wage.

Global Governance Advisors says Canada’s company chiefs are not yet earning as much as they were before the downturn – when median compensation was $5.8 million. Median pay had slipped as low as $4 million in 2009 in GGA’s annual review of CEO compensation.

Last year, salaries and bonuses were up 18 per cent and equity compensation climbed 14 per cent, in part a result of the improvement in stock prices. Many CEOs get much of their compensation in share units and stock options.

Median pay levels on the GGA review can vary from year to year, because different companies are selected annually. This year, the top earner was Gerald Schwartz at Onex Corp., who took home more than $87 million because of a large package of stock options, followed by Nadir Mohamed at Rogers, who had total reported compensation of $26.7 million. 

CEO pay is usually set by a company board and began rising rapidly in the 1990s when securities commissions mandated rules that top executives’ pay scales should be made public.

That led to many boards comparing their own executive compensation plan with what CEOs are paid at other companies, including companies in the U.S., which have even higher executive compensation.

GGA said many Canadian companies – including Canadian Pacific Railway and Barrick Gold – saw a changeover in top management in the past year, which can lead to a large payout to the outgoing CEO and a jump in compensation as the company tries to attract new talent.

Paul Gryglewicz, managing partner at Global Governance Advisors, said boards are tying compensation more tightly to performance targets, in part by compensating CEOs with share units that reflect share performance. That could slow the rapid pace of increase of CEO pay, he said.

Shareholders’ rights and equality focused organizations have also begun pushing back on the issue of CEO pay, turning up at company annual general meetings to demand more accountability over the issue.

In the U.S., Dodd-Frank legislation could soon require U.S. companies to report on the ratio of CEO pay to that of the average worker, hoping it would lead to a moderation in CEO pay.