What Manulife’s top executives earned in 2017

Manulife president and CEO Roy Gori, who’s been in the top role since October 2017, made $12.8 million in total compensation last year, while his predecessor, outgoing CEO Donald Guloien, earned $12.2 million. That compares to Guloien’s 2016 total compensation of $15.4 million.

Gori made US$9.4 million in total direct compensation, which included a transition payment of US$1.5 million that was awarded for last year only. For 2018, the target for his direct compensation is US$8.5 million.

“The board spent considerable time discussing CEO pay in light of the transition from Mr. Guloien to Mr. Gori,” the company said in its proxy circular, released March 16, which also noted that an external consultant was used.

The board wanted Gori’s compensation to “be attractive in a competitive market” but required that it also account for “what our peers pay for similar roles, tax considerations related to his relocation from Hong Kong to Canada, and what other senior executives at Manulife are paid.”

Manulife notes that its CEO realized and realizable pay (which includes cash compensation and the change in value of outstanding restricted share units) has been consistent “with what our shareholders have experienced—CEO pay has been lower when our [total shareholder return, or TSR] was low, and appropriately higher when our TSR was higher.”

Overall, Manulife identifies as a company that has “higher returns and lower compensation” than its peers.

Compared to the big bank CEOs, which recently released their proxy circulars, Gori’s total compensation of $12.8 million was comparable to the top earners: president and CEO David McKay topped all big bank executives with total compensation of $13.4 million, followed by president and CEO Brian Porter at $12.8 million.

Read: What we learned from the big banks’ proxy circulars

Manulife’s named executives

• Steve Roder, senior executive vice-president and CFO, received $6.9 million in total compensation, down from $7.5 million in 2016.
• Warren Thomson, senior executive vice-president and CIO, received $7.2 million in total compensation, up from $6.2 million in 2016.
• Marianne Harrison, president and CEO of John Hancock since October 2017, received just under $6 million in total compensation, up from $4.8 million in 2016.
• Linda Mantia, senior executive vice-president and COO, received $4.5 million in total compensation, up from $3.5 million in 2016. She joined Manulife on Oct. 3, 2016.
• Donald Guloien, former president and CEO who retired on Sept. 30, received $12.2 million in total compensation, down from $15.3 million in 2016.

Shareholder proposals

Manulife’s shareholder meeting will take place on May 3 in Toronto. Shareholders will vote to elect directors, appoint the auditors, have a say on executive pay and on two shareholder proposals, which the board recommends voting against.

The first proposal relates to Manulife’s presence in tax havens. It’s been proposed “that the board of directors reports the presence of the Manulife Group in Bermuda and, if applicable, in other ‘low tax rate territories.'”

The proxy circular says, “Manulife complies with all applicable laws and regulations, including those related to tax disclosure.” It adds it also follows the Organisation for Economic Co-operation and Development’s (OECD’s) “country-by-country reporting requirements, which provide a transparent profile of our operations and corresponding tax position.”

The second proposal calls on Manulife’s compensation committee “to disclose the use of the equity ratio in its CEO compensation-setting process.”

The company argues that at the core of its compensation philosophy “is pay for performance.” It adds: “Actual compensation realized is tied to the achievement of our short, medium and long-term goals, so that most of what our executives earn is variable and not guaranteed.”