The dramatic rise in pay of Canadians in the top one per cent of earners has far outpaced that of all other income earners over the past three decades. Executives working in the finance and business services sectors have been driving the growth in top incomes, but their gains are not clearly tied to talent or performance, says a study from the IRPP. The study shows an overwhelming majority of top-income earners are men over the age of 35 who tend to work substantially longer hours than average – usually in senior management positions. In 2011, the income cut-off for the top one per cent was $160,000 and the average annual income was $320,000 (in 2000 dollars). The oil and gas sector also played an important role in income growth at the top, especially in more recent years. As a result, a disproportionate share of top-income earners (21 per cent) now live in Alberta. The study suggests in the case of the financial sector, deregulation and lack of oversight have created opportunities for professionals to earn extraordinarily high incomes. Similarly, the fact that the pay of CEOs has increased substantially is a function of corporate governance structures that allow executives to collect stock options and other supplementary benefits.
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