Big Five executives saw pay boost in 2017
Canadian bank executives were richly rewarded in 2017, with the CEOs of the Big Five banks taking home a total of $66.92 million last year. All save one – BMO’s now-retired CEO Bill Downe – got a raise in 2017, though the bulk of the increases weren’t in base salary, but in compensation tied to the longer-term fortunes of the lenders. Here’s a look at what each of them earned last year.
Dave McKay, CEO, RBC: $13.36 million, nine per cent raise year-over-year
The head of Canada’s largest bank also took home the largest windfall among his peers in 2017. McKay’s base salary remained static last year at $1.5 million, or 11 per cent of his total payout, with most of the rest being heavily weighted to short-term incentives and performance deferred share units meant to incentivize long-term shareholder returns. McKay has proved effective in doing just that over his three and a half years at the helm, with shares of RBC rising more than 28 per cent since August 1, 2014, easily outpacing the overall TSX Composite.
Brian Porter, CEO, Bank of Nova Scotia: $12.84 million, nine per cent raise year-over-year
The longest-tenured CEO among the Big Five Canadian banks was the second-best best paid in 2017, with Scotia’s Porter getting a nine per cent bump in compensation. Porter, who has held the top job since late 2013, spent much of the last year expanding the digital operations of Canada’s third-largest bank by market capitalization. The bank has also been busy on the acquisition front, striking a $2.9-billion deal in late November to take a majority stake in BBVA Chile.
Bharat Masrani, CEO, TD Bank: $12.44 million, 20 per cent raise year-over-year
Masrani was the third-best paid CEO among his peers last year, but the head of Canada’s most-American bank got the biggest raise of the group. The $12.44 million payout is a 20 per cent increase from 2016, mostly due to an increase in equity incentives. The bank posted a record adjusted profit in 2017, and boosted its dividend for a seventh consecutive year, but it wasn’t all smooth sailing. TD’s online trading platform was dogged by outages to cap off the year, which the company attributed to “unprecedented” consumer demand. Earlier in the year, TD launched a probe into anonymous, unproven allegations that some of its employees engaged in aggressive sales practices.
Bill Downe, Former CEO, BMO: $10.53 million, one per cent pay cut year-over-year
Darryl White, CEO, BMO: $8.31 million, two per cent raise year-over-year
BMO shelled out a cool $18.84 million for its two chief executive officers in 2017, as Downe passed the reins to White at the end of October. Downe was among the last of the old guard of the generation of big bank CEOs who steered their firms through the financial crisis. White, an investment banker who joined the firm in 1994, was widely viewed as the heir apparent to the top job after being promoted to the COO role in 2016.
Victor Dodig, CEO, CIBC: $9.44 million, three per cent raise year-over-year
Larry Richman, Group Head of U.S. Region, CIBC: $13.25 million
CIBC proved it sometimes pays not to be CEO in 2017, with Dodig’s compensation lagging that of one of his top lieutenants. Richman, the group head of the bank’s U.S. division, took home a paycheque nearly 50 per cent larger than Dodig in 2017. Richman came aboard upon the completion of CIBC’s US$4.9-billion acquisition of Chicago’s PrivateBancorp, where he served as CEO. That acquisition has been paying dividends for Canada’s fifth-largest bank, with net income south of the border surging more than 130 per cent in 2017.