(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.

Just Posted

Missing Prince Rupert man located

Melvin Stanley Young who was last seen on Nov. 13 at a gas station has been found

Stewart RCMP welcomes new detachment commander

Corporal Derek Rondeau was named police officer of the year in PG

Skeena Métis Association encouraging Northwest B.C. Métis families to self-identify

Out of 5,760 students in SD82, only six are recognized as Métis, association says

B.C. First Nation Chief Ed John faces historic sex charges

John served as minister for children and families under then-premier Ujjah Dosanjh

Terrace Little Theatre’s fall play tackles climate change anxiety

Production of playwright Alena Smith’s “Icebergs” opens Nov. 15

VIDEO: B.C. to restrict nicotine content, bring in 20% tax on vaping products

Province will also restrict candy and fruit flavoured vaping products to adult-only stores

Seguin lifts surging Stars to 4-2 win over Canucks

Dallas is 6-0-1 in last seven outings

‘City that protects rapists’: Sexual assault survivor slams Kelowna mayor for defending RCMP

Heather Friesen spent the morning handing out flyers around city hall calling out the mayor

BC Liquor Stores to move fully to paper bags by March

Vancouver Island to be the first to convert to paper bags in November

Tolko shuts B.C. divisions for two weeks over holidays

Head office to close from Dec. 23-27; two weeks’ downtime runs Dec. 21-Jan. 6

B.C. government working with RCMP to address $10 million in budget cuts

Public Safety Minister Mike Farnworth issues statement following report of RCMP cost-cutting

Port Moody mayor says stayed sex assault charge related to ‘awkward date’

Rob Vagramov said charge was related to a string of dates in 2015

UBC conference draws fire over speaker from Chinese tech company blacklisted in U.S.

The company that has been blacklisted by the U.S. over links to the repression of China’s Muslim minority

‘It’s been 12 years’: Father of murdered B.C. real estate agent pleads for mayor’s help

Lindsay Buziak was stabbed to death on Feb. 2, 2008 in Saanich. Her case is unsolved.

Most Read