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A truck from Canadian waste management company GFL Environmental makes its rounds through a neighbourhood in Toronto on Nov. 5, 2019.CARLOS OSORIO/Reuters

Two founder-CEOs who have struck it rich from their companies received pay packages in 2021 that will also place them among Canada’s best-paid executives for the year.

GFL Environmental Inc. GFL-T paid chief executive officer Patrick Dovigi $43.5-million last year, up from $37.3-million in 2020, when Mr. Dovigi topped The Globe and Mail’s list of best-paid Canadian CEOs. And Shopify Inc. SHOP-T said CEO Tobias Lutke made just more than US$20-million, up from US$15.11-million in 2020 and US$10.62-million in the year prior.

Both men already own a significant amount of company shares. Mr. Lutke was at the top of the list of richest Canadians when Shopify’s shares were peaking, but a 65-per-cent decline from their November high has cut his net worth to about US$5.4-billion, according to the Bloomberg Billionaires Index. Mr. Dovigi’s GFL stock and options were worth more than $900-million at GFL’s November peak; his holdings are down to about $550-million now.

And for both men, stock-option awards – which can build their share ownership further – made up the bulk of their pay last year.

Mr. Lutke received just a $1 salary and no cash bonus or other perquisites. All of his pay came from his US$20,000,457 grant of Shopify options.

GFL valued Mr. Dovigi’s stock-options grant at $31.52-million, up from a 2020 option grant valued at $26.57-million. Mr. Dovigi also received a salary of $1.97-million, a cash bonus of just over $6-million, and perquisites – such as life insurance, a company car and personal plane travel – of $3.93-million.

The companies previously disclosed the 2021 stock-option grants in insider transaction disclosure documents, and The Globe and Mail has previously reported them. However, the companies’ proxy circulars filed this week are the first time the companies disclosed a dollar value for the awards, and included them in a full 2021 compensation disclosure.

For much of its life as a public company, Shopify has been a superstar stock, and the value of Mr. Lutke’s options has skyrocketed beyond the estimates provided in the company circulars. GFL’s share price has not been as meteoric, but Mr. Dovigi has already had the opportunity to make millions from options granted in GFL’s 2020 initial public offering year.

However, the retreats of the companies’ stock prices have left last year’s option grants looking a little less lucrative. Mr. Lutke’s options have an exercise price of US$1,280.32; the company’s NYSE-listed shares closed at just more than US$600 Wednesday.

Mr. Dovigi’s 2021 grant was in two tranches, with half vesting, or becoming usable, only if the stock gets to US$50 and the second half only vesting if the stock gets to US$60. GFL was on its way last year, hitting a high of $43.71 last Nov. 4, but it closed on the NYSE Wednesday at $33.08, roughly the options’ exercise price.

Mr. Dovigi’s annual cash incentive increased from $5.43-million in 2020. GFL says it paid out 2021 bonuses based on maximum achievement of its financial and non-financial goals.

GFL, with a fleet of heavy equipment that it depreciates and interest payments on more than $8-billion in debt, has never posted a profit, and recorded a $606.8-million net loss in 2021. For compensation purposes, the company looks at adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, which came in at $1.46-billion in 2021, and adjusted free cash flow, which GFL says was $540-million.

In its discussion of its compensation philosophy, GFL cited the 36-per-cent gain in its share price in 2021 and said “this growth was driven in part by our executive team’s ability to execute on our strategy to grow the business, including organically and through acquisition, despite the continued impact of the COVID-19 pandemic in many of the markets we serve, in particular in Canada.”

Option grants drove compensation for GFL’s other best-paid executives. The company estimated chief financial officer Luke Pelosi’s pay at $9.44-million, up from $5.10-million in 2020. The value of a stock-option grant made up more than 70 per cent of the 2021 total. Greg Yorston, the company’s chief operating officer of solid waste, made $6.94-million, up from $4.14-million, while chief legal officer Mindy Gilbert made $5.50-million, up from $2.63-million in 2020. Stock options made up more than 60 per cent of the value of their pay packages.

Shopify does not pay annual cash bonuses, so stock options and other share awards also make up a large portion of pay packages for Mr. Lutke’s executive team. Chief financial officer Amy Shapero made US$7.61-million last year, with a salary of just under US$600,000. New chief technology officer Allan Leinwand made US$13.21-million, including a US$13-million share award, while former chief technology officer Jean-Michel Lemieux made US$8.28-million, including an US$8-million share award.

Shopify posted net income of US$2.91-billion in 2021, driven by big gains on its investments in other tech companies. Its operating profit was US$298.8-million.

Mr. Lutke sold $623.3-million of Shopify stock in 2021, while Mr. Dovigi sold $101.1-million worth, according to a Globe analysis.

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