When compared to middle-class salaries, the amounts awarded to the highest-ranking executives at Canada’s largest firms increasingly stir a sense of unfairness. Each year, public discontent rises while pamphlets circulate highlighting and denouncing the extravagance of these compensation packages. They speak of the stark injustice of such opulence for Canadian workers, highlighting the fact that, on average, senior executives can earn a Canadian worker’s annual salary in a matter of hours.

To what extent has senior executive compensation inflated to become such a focal point of disapproval and a symbol of the wealth gap in society? Have we lost sight of the core purpose of compensation: to attract, retain, and motivate talent?

These questions are of utmost importance. On two prior occasions in 2012 and 2017, the IGOPP issued policy papers addressing executive compensation. These papers identified several factors and influences that have led to the escalation of senior executive compensation, a trend we have been documenting since 1998. This policy paper continues the analysis.