Every year during the first week of January, the newspapers kindly
mock remind us that Canada’s top CEOs will earn more money by 12 o’clock noon on January 3rd than you or I will earn all year long.
I say “you” if you happen to be a person with a full-time job making about $45,000. Statistics Canada says this is an “average” salary these days.
But the funny thing about averages is that each tier of society has an average. The “average” salary of the top 100 CEOs in Canada is $9.5 million/year. Which is about $791,000 a month - or $395,000 a pay cheque.
Imagine how Monday mornings would feel if you knew you would be $36,000 richer by 5 pm? Good lord, that's some real #MondayMorningMotivation!
The January 3rd salary comparison is a powerful tool because it illustrates the massive (and growing) gap between rich and poor. And yet, the analogy feels abstract because 99.9% of us will never make $2600 an hour. So ultimately, the math is too surreal to grasp.
But the other day I reimagined this math when a VC banker in a $7000 suit bought me a cocktail. His car cost more than my condo and his brogues cost more than my couch. My drink was splendid, it was a $20 manhattan - because apparently that’s what a fancy gin-joint charges these days. And as I sipped on that I delicious concoction, it dawned on me that buying someone a drink is a pretty universal experience - a relatable sort of math. I like to call it "Martini-Math".
We’ve all bought someone a drink before. I’ve bought many a birthday drink, a rounds of pints, bubbles to celebrate, wine to forget, and sometimes a can of beer for that guy who sits outside the liquor store. It’s an easy gesture of kindness, friendship and generosity.
But generosity - like all things in life - is relative. Turns out that one man’s generosity - is another man’s greed.
According to my highly unscientific martini math: a person (with an average salary) who buys their friend a drink is spending the equivalent of a 1/2 hour of their salary. And this makes it easy spend a day’s wages if you’re out with thirsty friends.
So this Banker who sent drinks across the bar to us; how much was a drink setting him back ... RELATIVE to his salary? And how did this compare with what the same gesture costs an average person?
Well... if our boozy Banker friend is making a top CEO salary - then he would need to buy you $1300 drink in order to match the same time/money ratio that you or I spend on a drink. Yup. A thirteen hundred dollar drink.
And if we reverse engineer this drunken logic again - that's like you paying your friend’s mortgage instead of buying him a shot of Lagavulin. Absurd... but true.
So, the next time a lambo-driving VC offers to buy you a drink. Order the good stuff.
Maybe even a double.
Don’t worry, it’s only costing him a nickel.
Sláinte my friends.