What we learned from the big banks’ proxy circulars

By Staff, with files from The Canadian Press | March 14, 2018 | Last updated on March 14, 2018
8 min read

The chief executives of Canada’s five biggest banks collectively earned roughly $53.6 million in direct compensation in the latest fiscal year, up more than 7% from a year earlier.

Royal Bank of Canada’s chief executive Dave McKay was paid the most among his peers with $12.43 million in total direct compensation, up 7.9% from a year earlier, according to the banks’ latest proxy circulars.

See a full breakdown of earnings for the big five banks’ named executive officers (NEOs) below.

The Bank of Nova Scotia’s Brian Porter was second-highest paid at $10.86 million in total direct compensation, marking a 7.4% increase from fiscal 2016.

Bank of Montreal’s Bill Downe, who retired from the top role on Oct. 31, was paid $10.5 million in total direct compensation, down roughly 1% from a year earlier.

But it was a particularly good year for Toronto-Dominion Bank’s chief executive Bharat Masrani, who got a more than 20% increase in total direct compensation to pull in $10.85 million in the 12 months ended Oct. 31, 2017.

Canadian Imperial Bank of Commerce’s chief executive Victor Dodig received $8.94 million in total direct compensation in 2017, up 1.71%.

While these chief executives received a 7.17% increase in collective direct compensation for the fiscal year, they received even more when taking into account other elements such as pension value. Collectively, these five executives earned total compensation for fiscal 2017 of $58.6 million, marking an 8.2% bump from fiscal 2016.

McKay received the highest total pay at $13.36 million, followed by Porter at $12.84 million. Masrani’s compensation package was third-highest at $12.44 million, while Downe and Dodig received total pay of $10.53 million and $9.44 million, respectively.

The rise in total direct compensation—which includes base salary and performance-based incentives—in part reflects the increasing demands for chief executives in the banking industry, said Bill Vlaad, president of financial services recruitment firm Vlaad and Co., which also monitors compensation trends.

Financial institutions are now in the midst of a rapid technological shift, he said, as consumers increasingly do transactions online and via mobile phone.

“The speed and velocity of change at these firms has been increasing, and to stay on the leading edge has required a lot more stealth by these CEOs,” said Vlaad. “I think it’s been a good time to be a CEO, but it is not for a lack of effort.”

These pay increases came during a fiscal year where each of the five biggest Canadian lenders reported record annual profits. During that time, these banks collectively earned $40.3 billion in net income for fiscal 2017, up nearly 13% from a year earlier.

The banks had benefited from the surprising strength of the Canadian economy, even amid worries about overheated housing markets and the fallout from government steps to cool them down.


President and CEO David McKay topped all big bank executives with total compensation of $13.4 million, an increase of more than 9% from $12.2 million in 2016.

McKay’s base salary increased slightly to $1.5 million, as did his shares, options and pension value. His $3.1-million bonus was up from $2.5 million last year.

His total compensation was 10% above his $11.3 million target. His 2018 target compensation is $12 million.

Douglas Guzman, group head of wealth management and insurance, and deputy chair of capital markets, also ranked among the bank’s NEOs with total compensation of $7.4 million, up from $7 million in 2016.

The firm’s circular said Guzman maintained RBC’s position as a leader in the full-service private wealth business and top market share in mutual fund AUM. It also credited him with improving the client experience and advisor productivity with digital tools like the Advisor’s Virtual Assistant app, and for growing insurance sales.

He received $1.1 million in short-term incentives and $2.9 million in deferred shares for the wealth management side, and a $2 million bonus from the capital markets side.

As for the other NEOs:

  • Douglas McGregor, group head of capital markets and investor and treasury services, received $10.8 million in 2017, down from $12 million the year before (he received $2 million in deferred shares in 2016 and none in 2017).
  • Janice Fukakusa, the outgoing CFO and chief administrative officer who retired at the end of January 2017, was paid just under $600,000 in 2017 (she earned almost $5 million the year before).
  • Rod Bolger, who took over as CFO in December 2016, earned $3.7 million last year, compared to $2 million the previous year.
  • Jennifer Tory, who took over as chief administrative officer on May 1, earned $4.8 million in 2017, up from $4.5 million in 2016.

Shareholder resolutions

The Mouvement d’Éducation et de Défense des Actionnaires (MÉDAC) submitted several proposals that were not submitted to a shareholder vote. These included authorizing the public to nominate two directors, to be elected by shareholders; having the bank publish a report that would allow shareholders to assess its exposure to climate risk; that the board require senior executives to sign a written declaration of compliance “with the principles of loyalty, integrity and honesty in its dealings with customers”; and that the bank disclose the equity ratio used in determining compensation.

Shareholder Linda Schwey agreed to withdraw a proposal related to offshore suppliers. The bank stated it continues “to honour our 2013 public commitment to make every effort to provide employment opportunities in Canada.” Vancity Investment Management also withdrew a proposal related to processes to ensure risk from climate change is accounted for when financing energy projects.

Read RBC’s full proxy circular here. The annual meeting is taking place on April 6.


President and CEO Brian Porter’s total compensation in 2017 was $12.8 million, up almost 9% from $11.8 million the previous year. Porter’s $1-million salary was boosted by a $2.6-million bonus (a 24% increase from 2016), $5.8 million in shares, almost $1.5 million in options, and an almost $2-million pension value.

His $10.86-million direct compensation was 14% above his $9.5-million target.

As for other NEOs:

  • Though group head of international banking and international transformation Ignacio Deschamps’ direct compensation increased in 2017, his total compensation dropped from $12.8 million in 2016 to $7.9 million last year. Deschamps was hired in 2016.
  • Group head of global banking and markets Dieter Jentsch earned $6.5 million in 2017, up from $6.2 million in 2016.
  • James O’Sullivan, group head of Canadian banking, took home $4.6 million in total compensation in 2017, compared to $4.1 million the previous year.
  • CFO Sean McGuckin saw his total compensation drop from almost $4 million in 2016 to $3.3 million last year.

Shareholder resolutions

California-based Harrington Investments proposed revising the bank’s human rights policies to ensure that indigenous communities’ rights are considered before financing projects. The bank said it’s confident in its current approach to human rights issues and recommended shareholders vote against the proposal.

MÉDAC made the same proposals described above.

Read Scotiabank’s full proxy circular here. The annual meeting will be held April 10.


President and CEO Bharat Masrani’s total direct compensation of $10.85 million exceeded his target of $10 million. His total compensation of $12.4 million marked a 20% increase from the $10.3 million he earned in 2016.

Masrani’s salary was up $209,000, and his shares, options, pension and bonus all increased year over year.

His target for direct compensation in 2018 is $10.8 million. As well:

  • Riaz Ahmed, CFO, earned $4.1 million in 2017, up from $3.6 million in 2016.
  • Bob Dorrance, group head of wholesale banking and chairman and CEO of TD Securities, saw his total compensation rise from $7.7 million in 2016 to $8.6 million last year.
  • Group head of U.S. banking Greg Braca’s earnings jumped from $2.6 million in 2016 to $4.8 million in 2017.
  • Teri Currie, group head of Canadian personal banking, earned $4.1 million last year, up from $3.6 million in 2016.
  • Mike Pedersen, who retired from his role as head of U.S. banking in June but stayed on as a special advisor, had total compensation of $8.6 million in 2017, compared to $7.9 million in 2016.

Shareholder resolutions

Shareholder Lowell Weir proposed to cancel the bank’s proxy access policy and replace it with a proxy access bylaw the board previously didn’t implement (Weir also called for the chairman’s resignation). The bank said the differences between the two versions of proxy access are “quite limited” and rejected allegations of misconduct.

MÉDAC made the same resolutions as outlined above.

Read TD’s proxy circular here. The annual meeting will be held March 29.


CEO William Downe, who retired in October 2017, earned $10.5 million last year, which was the bank’s targeted compensation for him. It was almost 1% less than his $10.6 million compensation in 2016: while his $1.5 million salary was unchanged and his bonus increased, his total equity compensation declined.

Downe’s successor in the top job, Darryl White (who was COO until taking over Nov. 1), was the bank’s only NEO to see a pay raise: up a bit more than 1% from $8.2 million to $8.3 million. White’s salary jumped from $483,333 to $750,000 after being named COO on Nov. 1, 2016. When he took over as CEO in November 2017, his salary increased to $1 million. His target compensation for 2018 is $8.5 million.

For 2017, White’s total equity was up more than half a million dollars from 2016, but his bonus was $750,000 smaller than a year before. As well:

  • Patrick Cronin, group head of BMO Capital Markets, earned $7.5 million last year, compared to $7.6 million in 2016.
  • CFO Thomas Flynn’s 2017 compensation was $3.61 million, down slightly from $3.64 million the year before.
  • Chief technology and operations officer Jean-Michel Arès earned $6.3 million, compared to $6.4 million in 2016.

Shareholder resolutions

MÉDAC made the same resolutions as outlined above.

Read the full BMO proxy circular here. The annual meeting will take place April 5.


CEO Victor Dodig’s compensation increased almost 3% from $9.2 million in 2016 to $9.4 million last year. Dodig’s $1-million salary remained the same while his bonus ($2.4 million), options, shares and pension value all increased slightly.

It was the two new additions to CIBC’s NEOs—Larry Richman, group head for the U.S. region, and president and CEO of CIBC Bank USA, and Deepak Khandelwal, group head for client connectivity and innovation—who earned the most last year.

Richman was president and CEO of PrivateBancorp, which CIBC acquired in June. Under his new agreement with CIBC, the bank replaced Richman’s severance benefits agreement with a deferred compensation of US$8.2 million split between deferred cash that vested last year and deferred shares vesting in March and December 2018.

“This arrangement was specifically structured for the retention of Mr. Richman upon the acquisition of PrivateBancorp, Inc., and Mr. Richman agreed to defer its payment until a date following his employment with CIBC,” the circular says. His total compensation was $13.3 million.

Khandelwal, whose experience “is in high demand and is a critical component of achieving our client strategy,” was hired in June. To compensate for the forfeiture of deferred compensation from his previous employer, he received a buyout of $9.9 million in deferred compensation split between restricted award shares, stock options and deferred shares. His total compensation was $12.3 million. As well:

  • CFO Kevin Glass’s total compensation was $3.2 million, up from $3.1 million in 2016.
  • Capital Markets head Harry Culham earned $8.12 million, up from $8.05 last year.

Shareholder resolutions

MÉDAC submitted the same proposals described. They were not submitted to a shareholder vote.

Read the full CIBC proxy circular here. The annual meeting is April 5.

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Staff, with files from The Canadian Press

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