NEWSMAKERS

A quick peek inside the numbers of the CEO 100 scorecard.

Dollar general

Most executive pay packages are measured in millions, with the average CEO on the CEO 100 taking home $5.5 million in fixed compensation, which doesn’t include stock options. But you could pay Brian Hill’s salary and bonus using a handful of nickels and dimes, since the CEO and founder of Vancouver-based clothing company Aritzia Inc. has earned $1 in salary and a $1 bonus in each of the past two years, a decision he agreed to after the company went public in October 2016. On top of that, he gets $8,400 in perks, which might get a bit heavy if you don’t have a cheque or at least some bills. But Mark Leonard, CEO and founder of Constellation Software Inc., goes one step further: he doesn’t take a salary, bonus or any other compensation at all (he has been given a token $1 for the purposes of calculations on the CEO 100). The last time Leonard earned anything was in fiscal 2015, when he had a salary of $488,413 and a bonus of $2.23 million, compensation which was still far below the average.

Hello and goodbye

Executives must have been in their positions for at least 18 months to qualify for the CEO 100, but, of course, there’s often a couple who are out the door by the time the list is published. For example, Brian McManus in July announced his intention to step down from Stella-Jones Inc. on Oct. 11, the day before the long Thanksgiving weekend. In early September, the company announced his replacement, Eric Vachon, a 12-year veteran of the lumber company currently serving as senior vice-president and chief financial officer. Meanwhile, it was announced in June that BCE Inc.’s George Cope and Ritchie Bros. Auctioneers Inc.’s Ravi Saligram in would be stepping down on Jan. 5, 2020, and Oct. 1, 2019, respectively. Cope is retiring and will be replaced by current BCE chief operating officer Mirko Bibic. Saligram is joining Newell Brands Inc. and Ritchie Bros. was still looking for a replacement as of press time.

Diversity? A little

Every year the CEO 100 ranking and its predecessors have generated criticism for not highlighting more female executives. Two female CEOs made the list, which ranks public companies by twoyear return, in 2018, including last year’s Outstanding CEO of the Year, Linamar Corp.’s Linda Hasenfratz. This year, there are three: Sienna Senior Living Inc.’s Lois Cormack, TransAlta Corp.’s Dawn Farrell and Atco Ltd.’s Nancy Southern. A fourth potential candidate, Sarah Davis, who has been president of Loblaw Cos. Ltd. since 2017, is now the grocer’s highest-ranked executive since Galen Weston moved into the executive chairman’s role. But since that change occurred this past January, Davis will have to wait until next year for a turn in the spotlight.

The option play

Granting options as part of an executive’s pay package is sometimes viewed as a good thing because it should align their interests with those of the common shareholders, hopefully resulting in a higher stock price in the long run. But they’ve also received a lot of criticism for focusing executives on short-term strategies to get their options. Either way, they are still a key component of Canadian CEO pay packages, perhaps nowhere more so than Bruce Flatt’s. The CEO of Brookfield Asset Management Inc., the country’s largest corporation, earned a modest salary of US$750,000 in each of the past two fiscal years, after earning US$600,000 in the previous years. But in fiscal 2018 he also received options that were worth more than US$4.1 million, a whopping 84% of his compensation. A year earlier, options took up an even greater portion of pay at 88.5%, or US$6.1 million. Hard to argue against it since Brookfield’s revenue in 2018 increased 40.4% over the previous year and profits grew 144.8%.