Canada’s biggest banks shelled out 18 per cent more for bonuses, unleashing the biggest increase in data going back nine years as the firms battled for talent to take advantage of a boom time in capital markets.

The country’s six largest lenders set aside $19.1 billion (US$14.9 billion) for performance-based compensation in their 2021 fiscal year. The increase trounced the 6.3 per cent average for the past decade. Except for Toronto-Dominion Bank, all of Canada’s other six largest lenders increased bonuses by the most in data going back to 2013.

Canada’s banks are riding high on almost two years of torrid activity in capital markets, starting with an early-pandemic increase in trading that gave way to a surge in equity and debt financings and more recently a flood of mergers and acquisitions. That boom, and expectations that it will continue next year, have heightened the competition among banks to attract and keep top talent. 

“The mood is jubilant, and bankers’ expectations are high,” Lara Zink, chief executive officer of Women in Capital Markets, said in an interview. “The war for talent is very real, and top performers absolutely need to get compensated as part of these firms’ retention strategies.”

National Bank of Canada and Scotiabank had the biggest increases to their bonus pools, while Toronto-Dominion had the smallest increase to its reserves for performance-based pay. 

Banks saw a 3.3 per cent increase in annual revenue from their capital-markets operations to a combined $32.7 billion in the year ended Oct. 31. Underwriting and advisory fees rose 22 per cent to a record $6.78 billion, and trading revenue fell 12 per cent to $14.6 billion.

The Canadian banks pay bonuses based on performance, with most of the variable compensation going to capital-markets professionals such as investment bankers, analysts, salespeople and traders. Variable compensation reflects the amount reserved, not paid out, and doesn’t include base salaries. Bonuses are typically distributed in December.

This year’s increase in performance-based pay may in part be meant to help make up for last year’s smaller bump, which was held back by concerns that the firms would look bad paying bankers a windfall in a year when much of the country was suffering economically or out of work.



“At the start of the pandemic, the messaging internally was, ‘Let’s get through this and hopefully it will be a decent year, but the goal here is survival,’” Adam Dean, president of Dean Executive Search, an advisory and search firm focused on senior-level positions in Toronto, said in an interview. “This year, however, deal activity has reached record levels, people are working incredibly hard and there’s an expectation among dealmakers that if ever there were a year to pay well -- all the way from their senior bankers down to the juniors -- it’s this year.”

Total net income for the banks rose to a combined $57.7 billion, up 40 per cent from the previous year and 24 per cent from fiscal 2019, before the pandemic struck. Total revenue climbed 3.3 per cent from fiscal 2020 and 6 per cent from 2019.

Banks are afraid to be too restrained on pay not only out of fear that their talent will jump to a rival firm, but also because workers are leaving the industry at a record clip, said Bill Vlaad, president of Toronto-based recruitment firm Vlaad & Co. The industry’s attrition rate this year could reach into the double digits, up from a normal rate in the low single digits, he said.

Some bankers may leave the industry after being ground down by the drudgery of long hours of working at home without the perks of travel and expense accounts, while others feel like they can make it known that they’re open to moving firms and find a new job demanding their skill set almost immediately, Vlaad said.

“For all intents and purposes, they’re right,” he said. “The power is definitely in the pockets of the employees this year.”

Here’s a bonus breakdown by bank:


Canada’s largest lender by assets boosted incentive compensation 10 per cent to $3.07 billion. That’s its largest percentage increase since 2017.

“Our approach to incentive compensation is consistent year over year,” Chief Financial Officer Kelvin Tran said in an interview. “It is competitive with the market and is performance-based. And this year, you saw higher incentive compensation because we had higher revenue and better performance for the bank versus last year.”

Royal Bank

Royal Bank of Canada, which has the biggest capital-markets division among Canada’s banks, boosted variable compensation 18 per cent to $7.15 billion. 

“We take a holistic approach to compensation including base salary, a broad range of benefits and other rewards, and performance-based incentive programs that align the interests of employees with shareholders,” Royal Bank spokeswoman Gillian McArdle said in an emailed statement. “Our employees are paid competitively based on personal performance, including demonstrating alignment with RBC’s purpose and values, the performance of the business or function they work for, and on RBC’s overall performance.”


Bank of Nova Scotia’s performance-based compensation increased 20 per cent to $2.09 billion. 

“This year’s performance-based compensation reflects the bank’s solid performance in 2021,” CFO Raj Viswanathan said in an emailed statement. “Scotiabank employees’ ongoing resilience and continued commitment to our customers, fellow employees, shareholders and other stakeholders enabled solid results from all of our operating segments, reflecting the benefits of a well-diversified business model.”

Bank of Montreal

Bank of Montreal increased performance-based pay 20 per cent to $3.15 billion.

“The increase in performance based total compensation this year is aligned with our strong business performance,” CFO Tayfun Tuzun said in an emailed statement.


Canadian Imperial Bank of Commerce, Canada’s fifth-largest lender by assets, increased performance-based compensation 20 per cent to $2.33 billion.  

CFO Hratch Panossian said the bank ties compensation to its progress in creating value for clients, shareholders, the community and the environment, and its performance both an absolute basis and relative to the industry.

“This was a fantastic year for us, and we were very pleased with what our teams delivered for all of those stakeholders,” Panossian said in an interview, adding that the bank also had a “very strong” financial performance. “So with all of that, this was a good year, and I think our compensation reflects that performance.”

National Bank

National Bank, which gets the largest proportion of its earnings from the financial-markets business, increased variable compensation 29 per cent to $1.28 billion. 

“Last year, we probably were at the lower end of the pay scale on a relative basis versus the other institutions,” CEO Laurent Ferreira said in an interview. The company also posted a stronger pretax, pre-provision earnings performance, and “we pay for performance.”