How much pay is too much?

Shantanu Dutta, Associate Professor of Finance, Telfer School of Management (photo provided)

Telfer MBA Conferences event explores excessive CEO compensation

The average top-100 CEO in Canada earned the annual pay of the average worker in 2016 by 12:18 p.m. on Jan. 4.

According to the report, Staying Power: CEO Pay in Canada, the nation’s top 100 CEOs average $7.3 million in pay – 174 times what someone working full-time for the average wage earns in Canada.

How much is too much? A top executive could be responsible for billions in revenue and thousands of jobs. On the other hand, the Prime Minister of Canada makes a meager $327,400 (plus perks) to run the entire country.

The University of Ottawa’s Telfer School of Management will explore executive compensation during the March edition of its MBA Conferences series.

“There is no set standard for CEO compensation,” said Shantanu Dutta, Associate Professor of Finance at the Telfer School. “The corporate world is always trying to benchmark a CEO’s salary based on what other CEOs are making in comparable positions, but these benchmarks typically range high and are rarely tied to actual performance.”

Shantanu is co-author of Changing Landscape of CEO Compensation in the Post-Crisis Period: All Talk or Little Action? This report looked at the compensation structures of hundreds of publicly traded Canadian companies during and after the 2008 financial crisis.

The authors concluded that CEO compensation levels in Canada as a whole remain excessive and have little relationship with performance. Even equity-based compensation, intended to give a CEO a vested interest in the success of a company, generally fails to generate more wealth for shareholders.

Telfer School’s March event will explore the current controversies associated with excessive CEO compensation and how compensation should be tied to a company’s performance.

Register for this free event

“Executive Compensation” takes place from 9 a.m. to 1 p.m. on March 12 at the Telfer School. All MBA Conferences are open to students, alumni and the community at large. Best of all, they are free of charge.

To learn more or to register, call 613-562-5800 ext. 4684 or visit www.telfer.uOttawa.ca/mbaconferences