(The Canadian Press)

Canada’s Big 5 bank CEOs pay rises 6.5% to earn $54M in 2018

Volatility in equity markets last year also put pressure on the banks’ valuations

The chief executives of Canada’s five largest banks collectively earned roughly $63.2 million in total compensation during the 2018 financial year, up about 12 per cent from the previous year.

Based on the banks’ latest proxy circulars, Toronto-Dominion Bank’s chief executive Bharat Masrani received the highest overall pay for the 12 months ended Oct. 31, 2018 at $15.3 million in total compensation, which includes elements such as base salary, performance-based incentives and pension value.

That’s up roughly 23 per cent from Masrani’s $12.4 million in total compensation for the 2017 fiscal year, marking the biggest annual pay bump among the five bank chiefs.

The second-highest paid banking chief executive was Royal Bank of Canada’s Dave McKay, who saw an eight per cent pay increase to $14.5 million in total compensation, followed by Bank of Nova Scotia’s Brian Porter who received $13.3 million, up 3.2 per cent from the previous year.

The Bank of Montreal’s chief executive Darryl White received $10.1 million in total compensation in his first full year at the helm, up 22 per cent from fiscal 2017.

The Canadian Imperial Bank of Commerce’s chief executive Victor Dodig received roughly $10 million in total compensation in the 2018 financial year, up 6.5 per cent from a year earlier.

Excluding pension value and other miscellaneous compensation items, the five bank CEOs earned roughly $54.7 million in total direct compensation, up roughly 6.5 per cent from the 2017 financial year.

While a double-digit overall pay bump may make some bat an eye, the increase in compensation is reflection of the complexities in the financial sector that these CEOs face, said Bill Vlaad, president of financial services recruitment firm Vlaad and Co., which also monitors compensation trends.

The banking sector employs tens of thousands of people and each of the five financial institutions has a growing international presence, he said. What’s more, as more Canadians do their banking digitally, these banks are deploying more complex technology, Vlaad added.

“There’s a lot of pressure on these CEOs, more so than for a traditional CEO of an operational company,” he said. “I think that justifies a great deal of their compensation.”These pay hikes came as the Big Five banks delivered a collective $43.2 billion in net income for the 2018 financial year, up nearly 7.2 per cent from the prior year. The banks continued to churn out profits despite worries over stricter mortgage lending rules and trade uncertainty.

READ MORE: Hackers targeting Canadian banks, mining companies

However, the volatility in equity markets last year also put pressure on the banks’ valuations. When comparing the share prices of each bank from the beginning of the 2018 financial year on Nov. 1, 2017 to the end on Oct. 31, 2018, the results are mixed. At one end of the spectrum, Scotiabank’s stock had slipped roughly 11.3 per cent during that period from roughly $78 to $70. RBC’s shares in that period slipped one per cent from $96 to $95. BMO and TD’s shares increased by roughly 3.6 and 3.4 per cent, respectively, to approximately $97 and $72 during that time frame. CIBC, at the higher end of the range, saw its shares increase from $107 to $112, or about 4.7 per cent.

Most of the banks outperformed the S&P TSX Composite Index during that period, which slipped roughly 6.25 per cent to 15,027.28 on Oct. 31, 2018.

“Any company can justify increases in compensation if the shareholders are also making return on their investments that well exceeds the market,” said Vlaad.

Armina Ligaya, The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Abbotsford International Airshow opening 50-year-old time capsule

Bronze time capsule was put together to commemorate AIA as Canada’s National Airshow

Abbotsford’s UFV gym now without a sponsor

Partnership with Envision Financial ends, school seeking new organizations to partner with

Road washout affecting section of Highway No. 3 near Manning Park

Road maintenance crews are on the scene, with an almost two kilometre long stretch impacted

CBC Bearcats hire Rebecca Garner as women’s volleyball head coach

Abbotsford-based team hires former Bearcat, Briercrest star to lead program

Children’s author hopes public can grant father’s wish to see work in Abbotsford library

Dawn Doig’s father recently died from COVID-19 after staying at Worthington Pavilion

VIDEO: Injured bald eagle rescued in B.C. First Nations community

Bird suspected injured in fight, whisked off to Coquitlam rehab

Facing changes together: Your community, your journalists

New platform allows readers to make a one-time or ongoing donation to support local journalism

Human Rights Tribunal denies church’s request to toss out White Rock Pride Society’s complaint

Star of the Sea and White Rock Pride Society to go to Human Rights Tribunal hearing

Toronto Raptors’ Ujiri says conversations about racism can no longer be avoided

Thousands have protested Floyd’s death and repeated police killings of black men across the United States

B.C.’s Central Kootenay region declares state of emergency, issues evacuation orders

The evacuation alert covers all areas except the Cities of Castelgar and Nelson

‘I’m afraid’: Witnesses of wolf attack on senior near Prince Rupert worried about safety

Frank Russ shows where the unprovoked wolf attacked his father

Protesters prepare to rally against racism in front of Vancouver Art Gallery

Rally is in response to the deaths of black Americans and a Toronto woman

Protesters rally against anti-black, Indigenous racism in Toronto

Police estimated the crowd to be between 3,500 and 4,000 and said there was no violence

Feds earmark $1.5M to support recovery of B.C., Indigenous tourism

B.C. money will be split between Vancouver Island and Indigenous tourism

Most Read