New Democrat leader Jagmeet Singh has come up with what I find to be an interesting idea to bring some measure of justice to runaway corporate executive salaries. His proposal, which will likely be tabled as a private members bill, will draw a direct proportional connection between the wages of a companies top executives and the wages of the people that they employ. Think Big Grocery, Big Gas, Big Oil, Big Telecom, Big Bank, and on and on.
The proposed legislation would slap a corporate tax increase on any company where a CEO makes more than 50 times the wages of the median employee salary. All companies will be required to report on their executive/median worker ratio, and any that lay above the ratio of 50:1 would be required to pay additional tax.
For example, Galen Weston, a regular punching bag of mine, last year hauled in a Total compensation package of $11.7 million, a figure that is 431 times the amount that the median worker makes in any of the holdings operated under the umbrella group controlled by Loblaws. What makes working for a grocery store a double whammy of sorts is that, while their chief executive gets raise after raise after raise, presumably for his brilliance in raising prices of groceries across the board, their wages stagnate or are even clawed back. Added to this, people working at Loblaws, or No Frills, or Shoppers Drug Mart etc need to eat as well, so they fall victim to the corporate greed of their own bosses every time they have to buy their own groceries.
In 1998, chief executives made an average of 104 times the wage of their median earning employee. By 2021, the gap had risen on average to 234 times the median employee salary. It would be safe to say that the gap appears to be widening. The average Top 100 CEO in Canada made #14.2 million that year, great work if you can find it.
Meanwhile, an increasing number people line up at food banks or rummage through dumpsters.
The legislation, if passed, would likely bring in hundreds of millions of dollars a year, which the government would then feed back to citizens through an increase in the GST tax credit. And just in case companies make an effort to circumvent their responsibilities, which of course they will, regulations would be tagged on to the law to penalize any attempts at avoidance or by using contractors to attempt to get around the effect of the law.
Rather than simply being paid a base salary, which inevitably they all are, corporate executives supplement that with so-called performance bonuses which can be paid out as cash, stock options, or shares in the company.
This is what happened with Nortel in Canada, where chief executives cashed out all their shares and stock options when the saw the writing on the wall, divesting themselves just before the market price collapsed. Not only were Nortel workers devastated, but ordinary investors took a bad haircut on their investments, with many losing what was intended to be their retirement packages. That’s nothing short of criminal, regardless of the fact that nobody was called to account.
For knee-jerk conservatives, this is another case of the steady creep of socialism/communism in the approach of the federal government. These types are the red-blooded capitalists who are all about keeping government out of the hair of business, no matter the harm that corporate greed does to the broader society and population. They have no time to think about anyone else, and believe that if you require some form of social assistance, you’re therefore lazy and unmotivated and you deserve what you get, which isn’t much. The corporate world treats worker wages as scraps that fall off the corporate table. They call it trickle-down economics. Which is a typical catchy conservative phrase that really means nothing other than sticking it to the working person.
These battles were fought a hundred years ago when corporate greed really started to hurt society and continued into the Great Depression, probably the most succinct example of the effect that financial and corporate greed has on those not lucky enough to be born with a silver spoon in our mouth.
And now here we are again, one hundred years later, with the business world ever-creeping their way back to those good old days where corporations could do anything they wanted and anyone who complained was a communist, another right-wing word they like to fling around.
All I know is that these greedy corporate types give communism a good name, and that’s tough to do in today’s world, given the nations that consider themselves to be communist.
And so, once again, we need to fight back, and rein these people in.
The legislation is being introduced by the NDP and is not part of the supply and confidence agreement, by which the NDP has agreed to prop up the governing Liberals until 2025 in exchange for the passing of progressive legislation deemed important by the New Democrats. If the Liberals support it too, then it will pass and become law despite the howling histrionics of the federal Conservatives and their rabid leader Pierre Poilievre. But, however, there’s no guarantee that the Liberals will go along with it, and if they don’t, it won’t threaten the supply and confidence deal.
Should the initiative fail in the entirety of its scope, it will still have value as proof that some political parties care enough to bring this issue to light and attempt to do something about addressing a wrong.
So no matter what happens, I’m going to give props to Jagmeet and Company for at least having the fortitude to put this proposal out there. If more Canadians impacted by corporate greed were to take notice of stuff like this and do something about it with their vote, much needed change could be accomplished. As it is, though, most of those types don’t follow stuff like this that affects them deeply, and often don’t vote at all. And some will even vote for the people who support the status quo because they’ve been successfully agitated around some other, more than likely, social issue that has them angry, like climate change, LGBTQ, abortion or any number of flashpoint issues.
It’s a complex and complicated world. And the corporate types and their political enablers take full advantage of that, to the disadvantage of a lot of us.
Well done, Jagmeet.
NEWSMAGRENFREW 