While the global COVID-19 pandemic meant wage loss and layoffs for many, the same can’t be said for British Columbia’s highest-paid executives, who reported compensation growth during 2020, according to data collected on Business in Vancouver’s Top 100 Highest-Paid Executives in B.C. list (https://biv.com/lists).
The average total compensation for the top 100 highest paid executives jumped by nearly $2 million (61.3%) to $4.81 million from $2.99 million.
The average one-year compensation growth rate was pulled higher because of outliers like No. 57 Brian Hill, Aritzia’s (TSX:ATZ) founder and CEO, who received a 35,705.8% compensation increase to just above $3 million in 2020 from $8,402 in 2019. Hill received $1.5 million in stock options and share-based compensation in 2020 after taking only a dollar in salary the year before.
There were also a number of executives whose compensation increased a multiple of two times or more over the previous year, which significantly boosted average compensation for the top 100 paid executives. The median compensation growth on the list, which better addresses outliers, was 24.3% in 2021, significantly higher than the median compensation growth rate in 2020 of 1.6%.
Employees, however, did not enjoy the same degree of wage growth. Among five companies with employment expenses delineated on their financial statements, average employee compensation grew 2% compared with the double-digit and higher compensation growth of their companies’ executives.
Average employee compensation at Teck Resources Ltd. (NYSE:TECK; TSX:TECK.B) fell 9.3% in 2020 while the average Teck Resources executive on the list with two years of compensation data posted an average increase of 16.9%. The smallest compensation increase for a Teck executive was a 7.3% – for No. 53 Peter Rozee, senior vice-president, commercial and legal affairs.
However, not all companies on the list reported executive compensation increases at the expense of employee compensation. During the pandemic, the five Telus (TSX:T) executives on BIV’s list had an average compensation growth of 3.5% compared with an average employee compensation growth of 7.2%. This discrepancy was largely because three Telus executives, No. 36 Tony Geheran, No. 45 Francois Gratton and No. 53 Eros Spadotto, took compensation cuts. However, No. 2 Darren Entwistle, Telus’ CEO, received an increase of 24.1%, almost three times the rate of the company’s average employee.
Executives at Methanex (TSX:MX) and B2Gold (TSX:BTO) also took compensation cuts, while average employee compensation increased by 38.9%. Two B2Gold executives took a more than 50% cut in total compensation while the average employee compensation increased 32.8%. No. 59 Michael Cinnamond, B2Gold’s senior vice-president of finance and CFO, and No. 58 William Lytle, B2Gold’s senior vice-president of operations, had the second- and third-largest compensation declines on the list, with each falling 52%. No. 19 L. Scott Thomson, Finning International’s (TSX:FTT) president and CEO, was the only executive whose compensation declined more (down 54.2%).
Over the past five years, No. 20 James Barge, Lionsgate Entertainment’s (NYSE:LGF.A) CFO, has moved up the most on BIV’s list: 57 places from 77th in 2017. This was due in large part to a 187.4% increase in compensation to $6.3 million in 2020 from $2.2 million in 2016.
However, of the executives with five years of data available, the same number that moved up the list dropped down or did not move.
No. 55 George Paleologou, Premium Brands (TSX:PBH) president and CEO, suffered the steepest fall on BIV’s list, dropping 31 places from 24th in 2017. Over the past five years, Paleologou’s compensation dropped just 15.6%, suggesting his decline on the list had more to do with the higher compensation increases of others on the list than his reduced compensation. •