RBC head made 5.1% more in 2016

By Staff | March 9, 2017 | Last updated on March 9, 2017
3 min read

Dave McKay, president and CEO of RBC, made a total of $12.2 million in 2016, up from $11.7 million in 2015 but slightly less than what he made in 2014, says the bank’s proxy circular.

His direct compensation was $11.5 million, which the bank says was 5.9% more than what he earned in 2015. This total includes a short-term incentive award of $2.5 million, and mid- and long-term incentive awards totalling $7.5 million, but not his pension and company shares.

According to the proxy, “McKay’s total compensation for 2016 is 2.4% above his target of $11.2 million. […] The 2016 target reflects an emphasis on performance-based pay, McKay’s demonstrated leadership capabilities, and the increased scope of his role with the addition of City National last year.”

RBC says McKay helped the bank thrive despite “a range of client, risk and strategic objectives.” Those included integrating an American wealth manager; in November 2015, RBC announced it would merge its “U.S. wealth management unit and City National into one line of business, to be reported as part of the RBC wealth management segment.”

The bank also wanted to remain a leader in business banking and move toward becoming a “digitally enabled relationship bank” throughout 2016.

Read: RBC wealth management profit jumps 42%, for more on the bank’s growing digital focus

For 2017, RBC says McKay’s target compensation will remain unchanged.

So far, McKay is the highest-paid bank CEO for 2016. TD’s chief executive officer, Bharat Masrani, made a total of $10.3 million last year, while Scotiabank head Brian Porter made $11.8 million after an 8% pay bump. The rest of major banks have yet to release their proxy circulars.

All of RBC’s other top executives made less in 2016 than 2015.

  • Janice Fukakusa, chief administrative officer and CFO, made $4.9 million, compared to $5.3 million in 2015.
  • Douglas Guzman, group head of wealth management and insurance and deputy chair, capital markets, made $7 million, compared to nearly $9 million in 2015. In the proxy circular, RBC says Guzman helped boost client satisfaction. But while the 2016 objective for wealth management satisfaction exceeded by 5%, it was “below objective for insurance by 10%.
  • A. Douglas McGregor, group head of capital markets and investor & treasury services, made $10 million, compared to $11.3 million in 2015.
  • Jennifer Tory, group head of personal & commercial banking, made $4.5 million, compared to $4.6 million in 2015. Regarding the satisfaction of RBC’s banking customers, the proxy circular says, “Client satisfaction and loyalty, as measured by a client index, exceeded [the] 2016 objective by 20%.”

Shareholder proposals

Shareholders have called for a binding vote on executive compensation, as opposed to an advisory vote. RBC recommends voting against this proposal, noting, “Since RBC adopted the practice of holding an annual advisory vote in 2009, shareholder support has been high. In April 2015, 95.3%, of shareholder votes were in favour. In 2016, 95.7% of shareholder votes were in favour.”

The proxy adds, “A premise of this proposal is that ‘in April 2015, management’s approach to executive compensation was clearly rejected by shareholders.’ This is factually incorrect.”

Shareholders also proposed shareholder approval of retirement and severance agreements, on the basis that “recent severance or retirement arrangements have provided senior industry executives with post-employment compensation that [were] excessive and not in the interest of shareholders.”

RBC also recommends voting against this proposals, saying it offers “compensation and benefits that are competitive within the markets where we operate and compete for talent.”

Gender diversity

RBC says the nominees for election to the board at its 2017 Annual Meeting included five women out of a total 13 director nominees (38%).

The bank also points out that in 2015, it was a founding member of the Canadian chapter of the 30% Club, “an organization with an aspirational objective of 30% women on boards by 2020.”

Advisor.ca staff


The staff of Advisor.ca have been covering news for financial advisors since 1998.