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Dmitri Tkachenko

Back in the green: CEO pay jumps 13 per cent - The Globe and Mail - 0 views

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    "The economic downturn in 2008 and 2009 was a distant memory by 2010 for Canada's top chief executive officers, at least as far as their pay packages were concerned. A Globe and Mail review of executive pay last year shows CEOs at Canada's 100 largest companies saw their compensation jump 13 per cent last year, led higher by a 20-per-cent increase in annual cash bonuses. Base salaries climbed 4 per cent. Instead, many gains for CEOs came from better economic performance by companies, which boosted variable elements of pay like cash bonuses. They can also be worthless. If the company performs in the bottom quarter of the peer group, and earns a negative return over three years, none of the share units vest for the executives. "
Dmitri Tkachenko

National Bank is North Americas Strongest Bank: Bloomberg - 0 views

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    "Canada has five banks in the top 20, with CIBC ranking 4th internationally behind National Bank. Canadian banks have "higher capital ratios than anyone else in the world," Canaccord Genuity analyst Mario Mendonca told Bloomberg. National Bank Pres. & CEO Louis Vachon told Bloomberg: "…size is not everything in financial services," and indeed it's not. National Bank's #1 North American ranking shows that prudent risk management and liquidity are meaningful and a source of confidence for investors and customers alike. Other ranking criteria included non-performing assets, loan-loss reserves, deposits-to-funding, and cost efficiency."
dylan huber

Canada discovers trickle-up economics - 0 views

  • there’s been a massive transfer of income and wealth from Canada’s middle and lower class to the rich.
  • some degree of inequality is inevitable and even desirable (allowing bigger rewards for those making bigger contributions), the level of inequality that exists today in the Anglo-American countries — the United States, Britain and Canada — is extreme
  • virtually all the income growth in the last 30 years has gone to the top.
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  • less equal societies almost always have more violence, more disease, more mental health problems, higher infant mortality rates, reduced life expectancies, as well as less social cohesion.
  • average CEO was making about 25 times the average worker in the late 1970s, today’s average CEO makes roughly 250 times the average worker.
  • evidence linking extreme inequality with serious economic problems. The level of inequality reached in 2008 was virtually identical to that of 1929, suggesting that large concentrations of wealth at the top create a dynamic leading to reckless financial speculation and Wall Street crashes
  • people in less equal societies have reduced social mobility.
  • the top-earning 1 per cent of Canadians almost doubled their share of national income, from 7.7 per cent to 13.8 per cent, over the past three decades.
Carolyne Wang

The rich really are getting richer - The Globe and Mail - 2 views

  • The top 0.01 per cent of Canadian income earners, the 2,400 people who earn at least $1.85-million, aren’t just basking in investment income and business profits. Nearly 75 per cent of their income comes from wages, just like the average Canadian, according to a new study from the Canadian Centre for Policy Alternatives. The top 1 per cent, the 246,000 Canadians who earn more than $169,000, receive about 67 per cent of their income in wages.
  • That’s a change from the 1940s, when the rich took 45 per cent of their income from wages, 25 per cent from business profits and the rest from investments, dividends and interest.
  • , the income share of the richest 1 per cent fell from 14 per cent to 7.7 per cent. That trend was reversed over the past 30 years, as the top 1 per cent regained its 14-per-cent share of Canadian income. Over that time, the richest 0.1 per cent almost tripled their income share and the richest 0.01 per cent increased their share fivefold.
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  • Ms. Yalnizyan said the major trend she identifies is that the wealthiest Canadians are increasing their share of income at a historic pace. Looking back over the past 90 years, income is now concentrated in a way that hasn’t been seen since the 1920s, she said. In the past decade, almost a third of income growth has gone to the richest 1 per cent, she added.
  • The top 0.01 per cent of Canadian income earners, the 2,400 people who earn at least $1.85-million, aren’t just basking in investment income and business profits. Nearly 75 per cent of their income comes from wages, just like the average Canadian, according to a new study from the Canadian Centre for Policy Alternatives. The top 1 per cent, the 246,000 Canadians who earn more than $169,000, receive about 67 per cent of their income in wages.
    • Carolyne Wang
       
      See the link for visuals of income distribution in Canada.
  • That’s a change from the 1940s, when the rich took 45 per cent of their income from wages, 25 per cent from business profits and the rest from investments, dividends and interest.
  • Looking back over the past 90 years, income is now concentrated in a way that hasn’t been seen since the 1920s, she said. In the past decade, almost a third of income growth has gone to the richest 1 per cent, she added.
  • The big picture shows that after the Second World War, Canadian society distributed income in an increasingly level fashion. From 1946 to 1977, she writes, the income share of the richest 1 per cent fell from 14 per cent to 7.7 per cent. That trend was reversed over the past 30 years, as the top 1 per cent regained its 14-per-cent share of Canadian income. Over that time, the richest 0.1 per cent almost tripled their income share and the richest 0.01 per cent increased their share fivefold.
  • Median incomes, meanwhile, have been stagnant
  • “You’ve always had these people who’ve got their fingers on something the rest of us don’t. But why are they suddenly worth many multiples of what they were back then?” Ms. Yalnizyan said.
  • The answer, she said, is not economics. It’s in our culture.
  • Economist Michael Veall, who teaches at McMaster University, said a few theories try to explain the income shift by focusing on changes in the labour market at the high end, particularly for managers. One view is that corporate governors have allowed CEO salaries to jump because they were climbing elsewhere. Another is that CEOs, known for being superb communicators, are more effective, and thus more valuable, in the digital age because e-mail and the mass media facilitate contact with employees and the public, Prof. Veall said.
Carolyne Wang

Is income inequality just business as usual? - The Globe and Mail - 0 views

    • Carolyne Wang
       
      The visuals in this link show the distribution of wealth among the highest income earners in Canada.
  • international statistics show that poverty rates are lowest where income inequality is lowest too. That can be because of culture -- the wage spectrum is compressed, as in Japan, where it is unseemly to get too far ahead of others in pay -- or through active redistribution programs, where taxes and the services they buy redistribute incomes and opportunities to try to level the playing field a bit more.
  • For most of the 20th century inequality in Canada - and in virtually all developed nations, actually - had been declining. By the 1980s that long term trend reversed. First because of recessions (where the bottom end of the spectrum lost ground) then because of rowth (when the top part of the income spectrum zoomed ahead). So for the past generation inequality has grown in Canada, in good times and bad.
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  • There are two reasons for hope. One is, oddly, the result of an aging population and the consequent shrinking pool of workers, which may push up wages for workers producing basic goods and services, not just those at the top of the skill spectrum. The other is a culture shift, where a growing number of boomers understand what is at play and start working with others to come up with ways to ensure there will be a resilient middle class for the next generation.
  • When the cost of something goes up, we tend to consume less of it. So, since living wages are higher than minimum wages, employers are likely to hire fewer workers. A living wage campaign is part of the effort to raise the visibility of a sorry development in Canada. The saying that "the best social policy is a job" is in many ways true; but a new reality has developed over the past decade or so - that you can't necessarily escape poverty by working. Working full-time full-year at a minimum wage job, as many adults do, condems you to poverty.
  • Professor Richard Wilkinson just finished a tour of Canada, discussing his research findings from the past 30 years or so. A social epidemiologist, he has gathered international data showing the very tight correlation between life expectancy and income inequality, between literacy and income inequality, between rates of incarceration and income inequality, etc. etc. Over and over again he shows a range of issues that have a strong social gradient which reveal that almost everybody is better off in a society with greater income equality, including the rich. You can see his presentation in Vancouver at this link. http://i.sfu.ca/TmyYCh
  • The Mincome experiment in Manitoba in the mid 1970s, the MacDonald Commission i n the mid 1980s, and the House Report from Newfoundland and Labrador in the early 1990s all had proposals for providing a basic income. Only Manitoba tried it, as a pilot project, for a few years. The problem with the guaranteed income idea is at what rate you set it, and at what rate you tax it back. It could remove the stigma of income support programs, but it could just as easily be a costly experiment that, essentially, guarantees poverty. Also, as Dr. Wilkinson has suggested, at some point on the GDP per capita curve, income inequality is no longer about material deprivation, but rather one of psycho-social responses. We are, after all, pack animals.
  • We can redress some of the vagaries of the market through public policies, but the root cause of growing inequality is how different peoples' work is valued. IN a slow growth environment, which seems to be the foreseeable future for Canada, it will become harder and harder for those at the top of corporate structures to take the types of increases they have been commanding in the marketplace and expect unionized workers to be happy about losing their pension, benefits and wage increases, and expect low-end workers to essentially stay put or lose more ground. Two things can happen - those at the top start moderating their increases; or those in the middle and the bottom start seeing solid increases, particularly as the wave of retirements starts accelerating. The problem with rising incomes, generally, is that usually goes along with rising prices; and we're about to host the largest cohort of retirees we've ever had in history, a group that lives on fixed and low incomes, to whom rising prices are toxic. So how will the highest priced workers get away witih demanding more in that context I wonder?
  • Historically, increasing economic growth first deliver rising inequality, then lowering inequality (Simon Kuznets' famous work back in the 1950s). That's still true of developing nations - economic growth is first badly distributed, then leads to demands for greater equality.
  • We can raise our kids more equitably - but it will take more taxes. We can have less of a winner take all society - but it will require some people at the top to trim their expectations. We can beat this in small ways, but we also need leaders to express the way forward. In the US they have Warren Buffett, Bill Gates and politicians leading the way. We're waiting for more people like Ed Clarke, the CEO of TD Bank, to weigh in on how to make Canada fairer (his suggestion is higher taxes on the rich).
Chris Lee

Is it good to be good? - The Globe and Mail - 0 views

  • “That,” I told them, “is charity. Observe: Some got candy; most didn’t.” If every Canadian who needed a candy got one (as in, say, a generous guaranteed annual income), that would be social justice, a sharing of wealth. But wealth isn’t shared – just the opposite.
  • In Canada, the ratio of CEO income to average worker income has gone from 45 to 1 in 1960 to more than 500 to 1 today. This is greed and entitlement on a toxic scale.
  • Here, governments watch and citizens watch as the poor get creamed, the middle class eviscerated, and the rich richer.
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  • Meantime, resist. Resist the urge to buy. Instead, give – ethically and year-round, not just now. Finally, decry gross inequality and elected officials who ignore it.
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