Publisher’s Comment: Top CEO salaries are completely out of line
February 1, 2007
Earlier this month, the entire Toronto media was up in arms after a report revealed what the top private sector CEOs annually earned. In case you were vacationing in Bora Bora and missed it, I'll enli...
Earlier this month, the entire Toronto media was up in arms after a report revealed what the top private sector CEOs annually earned. In case you were vacationing in Bora Bora and missed it, I’ll enlighten you.
Apparently this elite group averaged salaries of $9 million in 2005. No typo here, that’s a nine with six zeros followed closely behind.
I honestly can’t believe anyone is worth that much. Saying that, I suppose a CEO who has risked everything to build a successful company should be allowed to set his or her own compensation. These people have earned that privilege and in my books go to the head of the class. No sour grapes here, just envy.
Over in the public sector, we have Tom Parkinson, former CEO of Hydro One who made a reported $1.6 million, poor boy.
Oh, but don’t feel sorry for him, he walked out with a $3 million severance. Then there’s his predecessor Eleanor Clitheroe.
She was earning $2.2 million and was given a $6 million dollar exit package.
Most of us are asking how these compensation packages got so out of line. The scenario is no different than that of the professional athlete. As teams sign players, a salary benchmark is set. As time goes by, the benchmark rises. The team that offers the most, signs the player. The team that doesn’t anti up, loses out.
If you want the talent you have to pay for it. It’s that simple. The same theory applies to just about any occupation depending on supply and demand.
The other half of the equation is that at a CEO’s compensation level, everything is magnified.
A 3% increase to someone making $35,000 is $1,050. A 3% increase to someone earning $3.5 million is $105,000. Nice.
From time-to-time we hear public sector execs being accused of padding their expenses.
I’m not naming names (can you say lawsuit?) but we’ve all heard the accusations. It makes you wonder why someone earning a seven-figure income would allow themselves to be set up for a fall?
Where there’s sizzle there’s steak as they say.
Either they have a very bad habit, or are severely lacking common sense. Hell, if I were part of this group I’d gladly pay my own expenses.
Unlike most professional athletes, there doesn’t appear to be a salary cap for these individuals. The biggest question they’ll have to answer is when is enough enough?
I now know what I want to be in my next life, and it’s not a dog.
– Rob Wilkins is the publisher of Truck News and he can be reached at 416-510-5123.