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The Informer

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Why Roger Martin believes the corporate world needs to be overhauled—starting with excessive CEO compensation

The head of Toronto’s most prestigious business school has a seditious idea, and it might save us from financial catastrophe

Something Rotten on Bay Street

(Image: Daniel Ehrenworth)

Last fall’s Occupy Toronto protest was more of an idea than a place, a kind of free-floating rage against what is perceived as an unjust, morally skewed, out-of-control, soul-sucking machine. The number of protesters ranged from a few hundred people to 3,000, depending on the day, and the camp at St. James Park possessed a vibe similar to Occupy camps around the world. Gordon Lightfoot and Rachel McAdams dropped by. The placards that hung from tents or rested on the grass—“Corporate Greed Hurts Everyone,” “Reclaim Your Life!”—could just as easily have been found in London or Atlanta or Calgary.

Almost from the beginning, critics were quick to say that Occupy Toronto was misguided and irrelevant, a copycat protest at best, and a case of rich envy at worst. Corporate kleptocracy is not nearly as bad here as it is in the United States, the argument went, and our economy has triumphantly eluded any deep, lasting meltdown. Canadian executives are not, for the most part, cut from the same overpaid, underhanded cloth as American CEOs. In Canada, super-elite is just a passenger class on Air Canada. “We obviously have a very different situation here,” Stephen Harper said in response to the claims made by Occupiers. “We didn’t bail out our banking sector. Our banking sector is the strongest in the world.” In other words, put down the sign, comrade, nothing to complain about here.

William DowneWhile it’s true that economic disparity is not as pronounced in Canada as it is in the States, and the European Union could take a few pages—maybe even a whole chapter—from our playbook, the smugness is unwarranted. The Conference Board of Canada, a not-for-profit economic research organization, has found that we’ve been outpacing the U.S. in income inequality since the mid-1990s. The ratio between the top 10 per cent and the bottom 10 per cent of earners is now 10 to one (in the early ’90s, it was eight to one). The country’s wealthiest one per cent account for 32 per cent of all income growth between 1997 and 2007—the largest percentage in our recorded history. In 2010, the average Canadian income was $44,366, while that same year the average compensation for the country’s 100 highest-paid CEOs was more than $8 million. Frank Stronach, the former head of Magna International, received roughly $40 million a year over the last decade and in his last year at Magna pocketed $62 million. (In 2007, he set a Canadian record by collecting over $70 million in compensation.)

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The Dish

Drinks

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The sipper club: meet the city’s competitive cabal of top sommeliers

Will Predhomme belongs to a competitive cabal of top sommeliers who sniff, sip and spit their way through hundreds of bottles a week. They do this to help you decide what to drink with your dinner, while making you think it was your idea all along

One hundred and fifty-one people have reservations at Canoe tonight. Among these are many Bay Streeters, a couple celebrating their 25th wedding anniversary, dozens of people on dates, including the bar manager from Crush, and a young woman who plans to propose to her boyfriend over dinner. The two private dining rooms are fully booked.

Canoe, part of the ever-expanding Oliver and Bonacini empire, is routinely considered one of the finest restaurants in the city. Last summer, in a rigorous competition held by the Canadian Association of Professional Sommeliers, known as CAPS, Canoe’s head sommelier, Will Predhomme, was proclaimed Ontario’s best. Predhomme has devoted a third of his life—he’s 29—to wine scholarship. He now knows more about wine than almost anyone in Toronto.

Just after 5 p.m., the bar area begins to fill up with commuters sipping cocktails as they wait for the traffic on the clogged Gardiner, 54 floors below, to dissipate. One of the restaurant’s first guests, a retired trial lawyer, arrives. As a young female host escorts him to his large corner table, he puts an arm around her shoulder. “I don’t like to pay bills,” he says. “I want a fucking account. Last time I was here, I offered those ladies”—referring to the hosts who greeted him at his last visit—“$300 and told them to set up an account for me. And I still don’t have one.” He and his three dining companions, Canoe regulars, have brought in several bottles of their own wine, including a cabernet franc from the ex-lawyer’s private vineyard in Tuscany. When Predhomme arrives at the table to discuss the wine, the ex-lawyer, captivatingly bratty in a way that only the rich and sort-of-powerful can be, repeats his complaint. “Look, I spend about $50,000 a year at Bymark, and I’d do the same here if I had a fucking account.” Predhomme is unmoved, but gracious. “If you give me your contact information,” he says, “I’ll make sure that it gets to the right people.”

“You’ll get me an account?”

“I’ll look into it.”

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