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Canada’s 100 highest-paid CEOs made an average of $14.3 million in 2021, smashing the previous record of $11.8 million set in 2018, according to the Canadian Centre for Policy Alternatives (CCPA).

Report author and CCPA senior economist David Macdonald said that the 100 CEOS, who are mostly men, made 243 times the average Canadian worker in 2021, again beating 2018’s record of 227 times.

Most of the money these CEOs made was not from their salary, but from so-called variable compensation, which includes bonuses, stock options and shares. That ratio has been climbing over the years, with 83% of CEOs’ total pay in 2021 made up of variable compensation compared with 69% in 2008, according to the report.

“The last two years really exemplify everything that’s wrong with CEO pay,” said Macdonald, calling it a “pay-for-luck scheme.”

Variable compensation is intended to be tied to company performance, he said, but the pandemic showed that’s not always the case.

When companies fall on hard economic times, like during 2020, they often tweak compensation rules to ensure executive pay doesn’t suffer too much, he said; and when companies do well, like during high inflation, executives rake it in.

“In 2020, you have half of the CEOs on the list receiving government support, and/or changing their bonus formulas to exclude the negative impact of the pandemic on their pay,” he said. “And then the following year is record inflation, which drives record profits, which drives record CEO compensation.”

“They’re cushioned from the bad, but when things are good, then the sky’s the limit.”

The CEO pay trends of 2021 are likely to have continued into 2022 as they were driven by historically high profits and historically high inflation, said Macdonald, which of course continued over the past year despite the Bank of Canada’s efforts to quell inflation with — again, historic — interest rate hikes.

“It’s unlikely that we’ll go back to the level that we saw pre-pandemic, it’s likely they’ll continue at much higher pay levels in 2022,” he said.

“Inflation is bad for households. It’s bad for workers, generally. But it’s been great for the corporate sector, and it’s been great for CEO pay.”

The report offers four policy proposals for governments, including the introduction of a wealth tax and the implementation of higher top marginal tax brackets.

There’s also a suggested limit on the corporate deductibility of compensation over $1 million, which Macdonald said could yield almost $200 million in federal corporate income tax revenue; and a proposal to raise the capital gains inclusion rate to 100%, which would mean taxing capital gains like regular employment income, while currently only 50% of capital gains are considered income for tax purposes.

Previous reports had recommended getting rid of the so-called stock option deduction, where people receiving stock options as compensation would only pay tax on 50% of the value of the stock options. In July 2021, a new law came into effect capping that deduction at $200,000 worth of shares, though Macdonald said it could take a few years to see the impact of this change.

Macdonald said he thinks critical services like long-term care or health care could be better funded with more tax revenue from the highest earners in the country.

The highest-paid CEOs “boys’ club” continued in 2021, noted Macdonald, with more men named Mark on the top 100 list (four) than there were women (three).

The highest-paid CEO in 2021 was Nuvei chair and CEO Philip Fayer, who made almost $141 million in 2021 despite having an annual salary under a million dollars. The number-two spot was held by GFL Environmental Inc. president and CEO Patrick Dovigi, who made more than $43 million in 2021.

The list’s floor has been rising as average CEO pay gets higher, said Macdonald; this year the lowest-paid CEO on the list was Cameco Corp.’s Tim Gitzel, at $6.7 million.